What is Delivery Strategy?
An accurately developed Delivery Strategy goes well beyond a ‘re-route’ and entails a modeling process to consider facility costs, fleet costs, delivery asset types, customer time windows, stop service time, customer drop analysis, and customer frequency analysis.
Tools Used to Model Delivery
KPI utilizes route analysis tools that provide advanced route optimization across a wide variety of planning scenarios from territories and master routes for all facets of DSD delivery or sales behavior. An accurately developed sales and delivery strategy master plan entails a complex modeling process that considers fixed fleet costs, variable fleet costs, alternative delivery asset types, alternative product handling techniques in the trade, customer drop analysis, and customer frequency analysis. KPI has the ability to determine the operating costs impacts of alternative distribution centers or cross-dock scenarios including the effect these changes have on route delivery.
The ability to consider multi-stop, direct-store-deliveries, and maintain (or improve) customer service, while defining the optimal delivery fleet and cost structure is critical to defining the total cost-to-serve. KPI utilizes the Descartes software suite to evaluate alternative cost-to-serve strategies considering the current fleet as well as the impact of alternative fleet assets. Removing historical route planning constraints is critical to avoid locking in the fleet structure and delivery rules; hence locking in the operating costs.
Benefits of Delivery Strategy
- Minimize the miles driven, number of delivery vehicles utilized, and overall cost.
- Improve delivery service with better route planning considering constraints and client specifications such as delivery time windows.
- Maximize customer satisfaction with more on-time deliveries and minimal turnaround time to process orders.
The KPI Distinction
KPI clients benefit from the ability to quickly and confidently evaluate multiple warehouse network scenarios. Our modeling provides the empirical information necessary to define and quantify the optimal quantity, location, and function of our clients’ warehouses. Results are based on the optimal logistics costs while achieving the cost and customer service levels.
Unlike firms relying solely on experience or exclusively on analytics void of experience, KPI combines best-in-class Analytics, 250+ years of Operations experience, and a PROVEN Methodology unparalleled in consulting
Whether utilizing a single warehouse a multi-warehouse network, delivery strategy will challenge and answer the following:
- What are the correct number of routes?
- Is geographic routing or routing by customer type optimal?
- What is the optimum customer frequency and drop size (cost-to-serve)?
- Should 4-day, 5-day, or 6-day delivery weeks be utilized?
- Are there opportunities to balance the days of the week and route utilization?
- How can route balancing (time vs. weight) be achieved?
- What asset/truck mix provides the biggest benefit for cost and service?
- What case handling methods (pallet, ½ pallet, cart, etc.) are optimal?
- What is the allocation of human assets for sales, delivery, and merchandising?
- What is the best routing structure under the new strategy?