Goodman Fielder – National sub-contracted bakery delivery optimizationAugust 29th, 2014
- Making local deliveries of bakery products more sustainable for contractors
- Finding the optimum mix of drop points and vehicle types for each contractor
- Reducing delivery costs while improving service levels
We’ve been able to optimize the number of trucks, reduce mileage and fuel costs, and provide more sustainable earnings for our contractors.
Goodman Fielder, Australasia’s leading listed food company, is one of the biggest bakery companies in Australia, delivering to 14,000 outlets throughout the country every day from a nationwide network of depots. It manufactures in multiple locations, and supports an intricate network of depot and interfactory trunking operations and local deliveries.
The company uses independent contractors (all of them small local businesses) to do its final deliveries – a unique system that has brought major economies. In addition to the distribution work, the contractors handle merchandising and represent the company to retailers. National supply chain business analyst Paul March comments: “We incentivize them to work hard for us, and the results have paid dividends in cost savings and improved sales.”
However, the company was keen to take a good idea and make it even better. “We wanted to make delivery routes more sustainable for our contractors,” Paul March explains, “to ensure that they had an optimal mix of larger and smaller customers, and were using the right vehicle types.
“But we simply didn’t have the time or the necessary information to make informed judgements. We needed the right tools to help us make strong commercial decisions.”
Following a pilot exercise in Sydney and Melbourne using a basic in-house mapping application, the company saw that there was potential for major change. It therefore drew up a tender document and invited bids from a dozen solution providers on three continents, giving them real data to model so that their proposals would all be based on the same objective parameters.
- TRUCKSTOPS routing and scheduling optimization system
- OPTISITE, CACI’s network planning and modelling system
- The Geoconcept geographic information system, supplied by CACI
- HERE street-level digital mapping, supplied and configured by CACI
- Implementation support and training
We were amazed at the results. We could now see cost per drop and make decisions on how best to structure delivery rounds.
Goodman Fielder used a matrix of performance indicators to evaluate potential system suppliers. Most scored above 80 per cent, but CACI came out well ahead with a rating of 96 per cent, and was the company’s unmistakable first choice.
It then embarked on a wide-ranging project to streamline contractor operations, using the Geoconcept mapping and geographical information system with HERE streetlevel data (both supplied by CACI). It was able to see customers visually differentiated by size and type and use this ability to map out territories.
It was also able to map traffic flows. Using features such as Geoconcept’s “find nearest” and isochrone travel-time calculations, it was able to re-balance territories, and even out the distribution load among contractors.
These structured delivery lists were then ready to pass to Truckstops to verify and produce viable delivery rounds with the best possible mix of customers.
The reports output by both Geoconcept and Truckstops delivered compelling evidence of the savings to be made by pursuing these new optimised territories.
“We were able to set up Truckstops to weight all the main factors, even merchandising times, and come up with an overall best solution.”
He adds: “We were amazed at the results. We could now see cost per drop and make decisions on how best to structure delivery rounds.”
- Opportunity to optimize fleet size and mix
- Reduction in mileage and fuel costs
- More sustainable earnings for local delivery contractors
- More efficient loading practices
- Using line-haul carriers to make selected local deliveries
This exercise has been a true paradigm shift for us. CACI has given us the ability to add science to our decision-making, helping us to make really good commercial decisions.
Paul March reports: “We’ve been able to optimize the number of trucks, we’ve reduced mileage and fuel costs, and we’ve provided more sustainable earnings for our contractors, reinforcing their commitment to our business. Everybody wins.”
“Dealing with a supplier on the other side of the world simply hasn’t been an issue for us,” he says. “CACI’s digital conferencing and real-time online software demonstrations were incredibly powerful.” A CACI staff member spent just one week in Australia, providing training.
Paul March says optimum route mix is based not just on journey time, but also on outlet size and type, concession rates and other factors. “For instance, we used Truckstops to show one contractor how to manage his trucks and delivery sequence better, and he was amazed at how well it worked in real life.”
The CACI package has also led to a change in loading practice at some depots. “The linear GANTT charts produced by Truckstops revealed that in some instances the loading time limited delivering capabilities. We’d simply never been able to see this before.”
“Line-haul” (trunk) movements have also benefited. “We found that in some cases, our line-haul carriers could slot deliveries into an existing journey, freeing local contractors for other work.”
He sums up: “This exercise has been a true paradigm shift for us. CACI has given us the ability to add science to our decision-making, helping us to make really good commercial decisions.”