CASE STUDY

FIDELITONE Identifies Efficiency Improvements to Delivery Routing and Frequency with LLamasoft Transportation Optimization

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“We liked the fact
that Supply Chain Guru provided a single solution for both network optimization and transportation optimization and also had the tools required for street-level routing.”

–Jeff Walt, Director of Engineering Services, FIDELITONE

FIDELITONE Identifies Efficiency Improvements to Delivery Routing and Frequency with LLamasoft Transportation Optimization

Challenge

FIDELITONE is a leading supply chain management and logistics firm based in Chicago that specializes in last mile delivery, inbound materials management, order fulfillment, service parts management and transportation. With large spikes in demand during

the year, and changing pockets of demand in various delivery zones, the company needed a way to measure the effect of new business within its last mile delivery locations, including actual capacity increase requirements and impact to productivity. FIDELITONE also wanted to analyze and validate current service territory and zones with recommendations on frequency of service and changes to delivery zones within major metro markets—where to go and how often. The tools and processes the company had been using to answer these critical questions previously were labor intensive and inexact, and were difficult to rapidly scale with changes in the business. In addition, the company had no efficient way to simulate actual routing scenarios.

Solution

FIDELITONE chose LLamasoft Supply Chain Guru to tackle these logistics challenges.
“We liked the fact that Supply Chain Guru provided a single solution for both network optimization and transportation optimization and also had the tools required for street-level routing,” said Jeff Walt, Director of Engineering Services at FIDELITONE.

The initial scope for the FIDELITONE transportation network modeling project was to establish a baseline model to represent the existing network, then they would optimize the baseline network using the same delivery date as a constraint. Additional design scenarios were run to see the financial impact of allowing the model to select the optimal delivery date plus or minus two to three days. The team began by collecting one to three months of actual delivery volume from locations which service major metro markets and surrounding areas (usually within 200 miles of city center/location). Data inputs included shipment details, actual delivery dates, shipment quantities/cubic feet, business hours and fleet capacity constraints.

Model outputs provided the FIDELITONE team with recommendations on optimal frequency of deliveries to target areas and how to revise regional delivery zones to help increase density within a route and what zones, cities and three-digit zip codes are best to group on the same route. Models are now run two to three times per year to audit current operations or at any time when business changes or new volume is introduced to the market through new or existing clients. With the optimized model output, FIDELITONE can quickly analyze the route and shipment delivery dates to recommend a frequency of once per week, twice per week, etc. by area code or county to help build the delivery zones within the service area. Along with those potential changes to delivery zones, analysts track productivity by truck to see if the fleet is right-sized or if there is an opportunity to decrease capacity or deliver more volume with the current fleet.

Results

Supply Chain Guru transportation optimization provides FIDELITONE with a systematic method of evaluating route efficiency and decision support material to use when evaluating and pricing new business. The company can now validate assumptions relating to potential business and audit performance of existing business with actual routing simulation. Scenario management capabilities enable FIDELITONE to test and validate the impact of changes to service areas, frequencies and other continuous improvement activities. “From a sales perspective, it’s great to be able to use the model to validate what we’ve done before and then visualize it,” said Walt. With the changes to frequency and routing along with the increased visibility and focus by the FIDELITONE team, the pilot location, while still in the works, has seen an 18 percent increase in average stops per route. “Having Supply Chain Guru helps our senior leadership team sleep better at night, knowing we have a data-backed way to recommend routing and fleet sizing improvements,” concluded Walt. “I really think we’ve just scratched the surface of what we can achieve with the tool.”

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