Quintiq

EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS How an integrated retail chain boosts business performance with optimized logistics planning

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

When it comes to achieving lasting success in retail today, companies are up against a number of major challenges. And one that plagues every retailer is the battle with conflicting goals — costs versus customer service. The pressure is on as today’s customers are only satisfied when they get the right product at the right place and time.

A crucial contributor to meeting both goals is efficient logistics. Retailers need to find a way to transport products from suppliers to stores at the lowest cost possible, without sacrificing on-shelf availability and product quality. It’s a difficult balancing act to perform on a large scale as it often involves operations that span across different countries. But difficult does not mean impossible.

The background

A European retail giant found this to be true in its search for improved logistics results. The company wanted a more efficient approach to transporting its food and non-food products from suppliers to stores. Its large supply chain presented an overwhelming number of moving parts to manage. It had thousands of shops and suppliers as well as tens of distribution centers, resulting in thousands of truck movements each day. Its struggles with inbound and outbound logistics meant that its operations could neither be cost-effective nor agile.

This was where DELMIA Quintiq came in, providing the company with integrated logistics planning and a supply chain that could adapt to its current business landscape and future needs. Read on to discover the company’s journey toward efficient deliveries, full shelves and happy customers.

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

The company had three planning puzzles, which were managed separately — international inbound logistics, local inbound logistics (within a radius of 500 km) and outbound logistics.

Inbound logistics focuses on moving products from suppliers to distribution centers. Before DELMIA Quintiq, the company’s planners used Excel. It couldn't support consolidated plans and forecasts, consistent data and information sharing. It was a challenge for planners to decrease transportation costs, not knowing how one activity would impact the rest of the supply chain. The insufficient planning visibility also impacted the planning for promotional assortment that had frequently changing requirements.

The company’s planners were ill-equipped to handle the large number of suppliers and immensely complex transportation flows that spanned all over Europe. When faced with cross-docking options, planners couldn’t make effective decisions because Excel couldn’t provide insights on how the cross-docking would impact the entire network.

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

The existing solution was unable to handle these requirements and would suggest, for instance, that the truck delivered products requiring three different non-ambient temperatures at one go. But such a plan could not be executed in real life.

The planning difficulty didn't end there. A truck can transport 33 pallets. To maximize the available space, the number of pallets in each compartment should be in multiples of three. The existing solution couldn’t factor this in for optimized load plans.

The challenge of optimizing loads lies in complex calculations of endless possibilities as well as strict constraints (including pallet, temperature zones and limited cooling devices). Optimized truck space will drive higher profits.

For instance, a planner wasn’t able to determine the best plan for three suppliers in Spain that were delivering bottles of Catalan wine to the Netherlands:

• Option A — from Barcelona, Spain to a cross-docking point in Turin, Italy then on to Den Bosch, the Netherlands

• Option B — from Barcelona, Spain directly to Den Bosch, the Netherlands

The company’s outbound logistics involves transporting products from distribution centers to stores. While the company did have an existing outbound logistics planning solution, it couldn’t offer all the functionalities needed — the major one being the ability to handle truck compartment planning.

A truck is able to have up to three compartments. In truck compartment planning, planners have toconsider four temperature zones. And with the truck being able to hold two cooling devices at most, only two compartments can be chilled while the last compartment carries ambient products.

The solution also couldn’t take into account other complex rules and restrictions, including:

• Multiple time windows throughout the day for different product groups

• Differing truck sizes with individual cost structures• On-site constraints for vehicles• Storage capacity of stores

Additionally, planning of outbound activities on tactical and operational levels were carried out separately.

All this led to ineffective plans and resource usage, thereby decreasing cost-savings and on-shelf availability.

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

The answer to improving the company's logistics performance was an integrated supply chain, powered by DELMIA Quintiq's optimization technology.

The DELMIA Quintiq solution unites the company's inbound and outbound logistics. As local inbound and outbound activities are often executed with the same fleet, DELMIA Quintiq supports planners in identifying opportunities for efficiency gains, better use of resources and lower costs.

One way to achieve these goals is by combining trips. For example, the DELMIA Quintiq system shows that a driver has made his last store delivery for the day. At the same time, there's a store not too far away that needs to return some goods to the distribution center.

Integrated and intelligent logistics: The DELMIA Quintiq advantage

The intelligent system will suggest that the driver uses his empty truck for the pick-up of the goods on his way back to the distribution center.

With the solution, planners produce more accurate decisions through scenario-based planning, which helps planners explore all feasible options before finalizing the plan. For instance, if a delay is known beforehand that a supplier in Greece can only deliver goods next Friday instead of next Monday, planners are able to adjust the shipment plan for Monday in advance. Guided by the solution, planners can determine the optimized new number of shipments.

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

Additionally, DELMIA Quintiq enables planners to produce better results through:

Flexible planningDELMIA Quintiq supports planners in making even the most complex decisions by providing the flexibility to accommodate all requirements and constraints, including those for compartment planning. Additionally, the solution offers easy configuration based on specific country, region and distribution center.

Visualization and collaboration DELMIA Quintiq provides visualization of inbound flows so that planners have a quick overview of all data and KPIs. Collaboration through DELMIA Quintiq’s multi-user system allows planners from different locations and functions to work on the same data for both standard and promotional assortments. By evaluating costs and capacities across the entire logistics operations, planners are better equipped to make decisions that align with business goals.

Multi-level planning capabilitiesThe solution also brings together tactical and operational planning for outbound activities. At the tactical planning stage, planners can create more accurate transportation forecasts in terms of number and size of trucks required and when. At the operational planning stage, planners are guided to fine-tune the plans for outcomes that meet all KPIs.

Large-scale optimizationThe solution easily handles thousands of inbound flows over multiple weeks. Configured to be scalable, the solution grows along with the company, fully ready for future expansions.

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

With DELMIA Quintiq’s integrated planning solution, the company is now able to transport its goods with:

Cost-effective plansThe company has seen significant cost-savings, slashing its inbound logistics costs by 20% and its outbound logistics costs by 7%. Overall it has reduced total costs by 12% through DELMIA Quintiq's integrated planning, which allows planners to make decisions based on a cost-efficiency KPI.

Logistics efficiency The solution integrates optimized inbound and outbound flows from suppliers to distribution centers to stores across multiple countries. By suggesting feasible options for cross-docking and combined trips, the solution allows planners to realize consolidation potential and maximize efficiency.

The company also saw a 5% improvement in service level performance through improved outbound logistics.

Full visibility of operationsWith the DELMIA Quintiq solution in place, all transportations are planned in one system. Planners are now able to see the impact of any decision on KPIs before finalizing the plan, and make swift adjustments for a better outcome that aligns with business goals.

Planning effort and time are slashed as planners don’t need to go through the hassle of extracting information from multiple systems. This leads to quicker yet more accurate plans that meet store demands effectively.

Best use of fleetThe solution is able to identify opportunities for shorter trips and minimized empty miles. This enables the company to reduce total costs while still maintaining timely deliveries. The lower mileage contributes to sustainable logistics, which is in line with the company’s vision of greener operations. Its transportations are now friendlier to the environment with lower carbon emissions and energy usage.

Ready to exceed business goals and customer satisfaction

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EFFICIENT DELIVERIES, FULL SHELVES, HAPPY CUSTOMERS

With DELMIA Quintiq, the company benefits from logistics operations that’s optimized for cost-savings and customer satisfaction. They pave the way for better on-shelf availability, which in turn creates a great experience at all stores. Customers can count on seeing their favorite products on the shelves at any time.

As for the company, it can count on stronger brand loyalty and sharper competitive edge in the market.

Europe/Middle East/AfricaDassault Systèmes10, rue Marcel DassaultCS 4050178946 Vélizy-Villacoublay CedexFrance

AmericasDassault Systèmes175 Wyman StreetWaltham, Massachusetts02451-1223USA

Asia-PacificDassault Systèmes K.K.ThinkPark Tower2-1-1 Osaki, Shinagawa-kuTokyo 141-6020Japan

Our 3DEXPERIENCE® platform powers our brand applications, serving 12 industries, and provides a rich portfolio of industry solution experiences. Dassault Systèmes, the 3DEXPERIENCE® Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes’ collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 210,000 customers of all sizes in all industries in more than 140 countries. For more information, visit www.3ds.com.

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