ORTEC Retail Home Delivery Innovations - Webinar slides

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Retail Home Delivery Innovations:A crucial process for a reliable service

June 16, 15.00 CET


Agenda

� Introduction

� Trends

� Innovations

� Cases

� Questions

Mr. Ronald BuijsseCorporate Marketing Director – ORTEC

Mr. Michael OskamBusiness Director – ORTEC.


Questions?

Please ask your questions via the GoToWebinar question box


ORTEC for Retail solutions suites

Retail Analytics

• Consumer Behaviour Analytics

• Supply Chain Analytics

Retail Store Delivery

• Supply Chain Design

• Tactical Planning

• Operational Planning

• Real Time Routing and Dispatching

Retail Home Delivery

• Timeslot allocation

• Routing in the cloud


* Including Pick Up Points delivery

National DC Headquarters

Regional DC

Pickup point

Shop Home

Retail Distribution Centers

• Automatic Warehousing and Control

• Workforce Planning and Scheduling

Webinar 1April 14 – online now

Webinar 2May 7 – online now

Webinar 3June 16

Webinar 47 July


ORTEC World Wide

Advanced Planning &Optimization

Europe:

� Belgium

� Denmark

� France

� Germany

� Italy

� Netherlands

� Poland

� Romania

� United Kingdom

The Americas:

� Brazil

� United States

Pacific Region:

� Australia

� China

� Singapore

Transport Retail ConsumerGoods

Oil Gas andChemicals

Health Care ProfessionalServices

Manufacturingand Construction

€ 80M34 Years


Your Planning, Optimization andExecution processes

Planning and Optimization by ORTEC

Your Results

better and morepredictable resultsat lower costs

Your Demand

Your Resources and Rules (locations, trucks, workforce, etc)


ORTEC and Retail (e-commerce)

Leading in distribution optimization

for Retail.

50+ retail companies including the

global top 3 groceries

Also leading in distribution

optimization for large courier,

express and parcel companies,

active in home-delivery

Including 4 top global parcel

express companies



Innovations

Agenda

� Trends

� Innovations

� Cases

� Questions


Home Delivery is growing…

Source: www.shoppingtomorrow.nl / GfK-expert panel research .

Consumer spendings, online/offline, NL market


Growth differs per segment…. but still, deliveries are boosting

Source: Barclays – the last mile report


Next to growth in deliveries, also growth in delivery options …….



Result: Increasing complexity

Source: ShoppingTomorrow, 2015

Red =

Classic DC to

Store chain

Green =

Home Delivery

options

Source: www.shoppingtomorrow.nl


What is the main challenge for home delivery? Nobody at home…….


“Non-delivery is a common industry problem with 15-50% of packages failing first-time delivery depending on the area” (Postal Technology International)


The solution: move home delivery to pick up points?

Not really…..also complex, smaller baskets, almost same handling costs

Source: McKinsey, the future of online grocery


Retail Home Delivery matrix – Supply Chain positions

High

Medium

Basic

Less focus on

efficiency and

service level

Efficiency

focus

Basic

High

Medium

BasicCustomer

Service Level **

Planning and

Execution Capabilities*

Service and

efficiency

focus

Less focus on

efficiency and

service level

Service level

focus

Medium High

Efficiency

focus

Home Delivery

Company

* Capability items: static/dynamic routing, static/dynamic time slots offering, track & trace, online communication, intraday

services, dynamic slot pricing

** Service level items: size of delivery window, time slots offering (how many, how small), track & trace, change options


Retail Home Delivery matrix – Supply Chain positions

Basic

High

Medium

Basic

Service and

efficiency

focus

Less focus on

efficiency and

service level

Service level

focus

Medium High

Efficiency

focus

Basic

High

Medium

Basic

Customer

Service Level

Planning and

Execution Capabilities

Service and

efficiency

focus

Less focus on

efficiency and

service level

Service level

focus

Medium High

Efficiency

focus

Home Delivery

Company

High level e-commerce

shops, dedicated fleet

Most Courier Express

and Parcel companies


Home Delivery – available Planning and Execution solutions

STRATEGIC network planning

TACTICAL planning

OPERATIONAL planning

REAL-TIME execution

Many planning and execution concepts and tools available on 4 levels to empower shipper and carrier



Innovations

Agenda

� Trends

� Solutions/Innovations

� Cases

� Questions


Retail Home Delivery – ORTEC Planning and Execution solutions

ORTEC STRATEGIC network planning� Long-term

� Network analysis

� Supply chain design

ORTEC TACTICAL planning� Mid-term, periodic

� Estimated Volumes

� Territory assignment, Balanced Workloads

� Master plansORTEC OPERATIONAL planning� Daily

� Actual orders

� Available resources

� Time slotting

ORTEC REAL-TIME execution� Time slotting updates

� Dispatching,

� Communication

� Track & Trace

� Delivery

� Reporting

� ……


ORTEC Strategic/Tactical Network Planning solutions

Selection of available functions/solutions:

� Territory assignment

� Period scheduler

� Balanced workloads

� Optimized master routes

� What-if scenario analysis

Results:

Reduction of mileage and hours

Higher resource utilization

Improved decision making

Better customer service levels


Focus on:

� Compute balanced regions

� Compute flexible areas

Adjacent routes should be adjacent at the

loading docks to exchange flexible areas

Schedule template

Master routes

Balanced workload

Territories

ORTEC Tactical Network Planning: creating balanced territories


Dynamic planning level options:

1. Optimize within a route, borders are

fixed

2. Use flexible areas (zones / cells)

between borders of a route

3. Fully flexible and optimized routes

Results: better utilization of resources

and higher service levels

Route

148

Route

147

Route

146

147

�

148

ORTEC Tactical Network Planning: from fixed to flexible territories

147

�

146


ORTEC Operational Route Planning – Planning and Execution solutions

Selection of available functions/solutions:

� Centralized, multi-user planning

� Integrated with ERP, GPS, portals

� Automatic planning using optimizers

� Considering traffic congestion, driving time, etc.

� Real-time event management and KPI montoring

Results:

Optimized transportation

Efficient planning and follow-up

Larger span of control

Strong, proven ROI………..


Case example:

1. Use pre-defined limits and prices

for the deliveries in each time slot

2. Use booked orders to re-compute

dynamically the availability of

time-slots for new customers /

new orders

3. Adjust dynamically the price of

each time slot

ORTEC Operational route planning: time slot proposals to customers


ORTEC Route Planning – Dynamic Time Slot Process Overview

Routing GeocodingDynamic Time Slot

Optimization

1. Address

entry/

check

2. Time Slot

options +

selection

3. Confirm

Dispatch

4. ExecutePlanning

Process

Step

ORTEC

Solution

Customer entersaddress at start of ordering process

Customer selectspreferred time slot from options offered

Customer adds products to basket, based on confirmed time slot

Customer receives goods

Customer

actions


ORTEC route planning: dynamic updates of available time slots

Using pre-defined maximum of 10 deliveries per

time slot:

� when the deliveries are far away from each other,

then 2 out of 10 deliveries can’t be reached in time

� when the deliveries are close to each other, 2

extra deliveries could be made within the time slot.

Using dynamic updates of available time slots:

� when the deliveries are far away from each other,

the planning system will allow only 8 deliveries

� when the deliveries are close to each other, 12

delivery options will be allowed by the planning

system

Better results with dynamic time slots compared to pre-defined max number of deliveries per time slot

29-3-201526 Type here the SlideDeck topic

10 deliveries, far away from each other, 2 will be missed

10 deliveries, close to each other; room for 2 extra


Map aspects:

ORTEC Operational Routing and Scheduling – Cloud Services

� Batch optimization, e.g. in early morning

� By using cloud services this can be done

in a very scalable way

Dealing with

routes with 100 –

200 stops

Dealing with very

detailed street /

turn information


react & re-plan

ORTEC Route Planning: extra real-time interaction with customer

Early in the morning:

� Inform the customer of expected

arrival time

During the day:

� Use track & trace information to re-

calculate continuously the arrival times

� Update the customer with more

accurate expected arrival time

� Let the customer interact if not

convenient



Innovations

Agenda

� Trends

� Solutions/Innovations

� Cases

� Questions


ORTEC cases – implemented solutions at retailers and carriers

Retailers a..o.Ahold, Colruyt

a.o. Ahold, Jumbo, Walmart

Jumbo, Ahold, Carrefour, Walmart, Tesco, Delhaize, Coles, Action etc.

Zeeman, Delhaize, Action, Tesco, etc.

Courier,Expressand Parcel shippers

a.o.TNT

a.o.TNT, DHL,FedEx, La Poste

DHL, DPD, bpost, HermesLa Poste, etc.

PostNL, bpost, Hermes, etc.


Case Ahold

Albert Heijn Online:

� Grocery, liquor, pharma

� 3 DC’s, 10 hubs, 280 trucks, 10,000 orders daily

� Order before midnight, delivery after 4pm

Characteristics:

� Different pricing per time slot

� Black-box routing optimizer

� Optimal DC / hub assignment

Results:

� Increased utilization, stops per hour

� Short and limited planning time

� Increased service and reliability to the customer

DC

Hub

customers

cheap

expensive

Home delivery

Home delivery


Case Ahold - ORTEC R&D Innovation project in e-commerce

Acknowledged project for 4-year research by consortium of

university and companies, a.o.:

� The primary goal: develop decision support tools to facilitate the

design of different delivery service models in online retailing and

to identify service models and corresponding operating

strategies that provide the most benefits in terms of various

sustainability criteria.

� Aspects considered:

� Environment

� Customer behavior and service flexibility

� Volumes/ growth

� Governmental sustainability policies

Designing sustainable last-mile delivery services in online retailing

NWO call – sustainable logistics


Case DPD

Company profile

� Leading global parcel provider company, part of Geopost (La Poste)

� Daily delivering 3 million parcels in Europe

� 46,000 employees, outreach to 230 countries

DPD Predict service

� Informing the customer upfront of exepected time of arrival within 1

hour interval


Case DPD – ORTEC Solution

Solution:

Black box routing optimizer where orders are send to,

and the optimal route sequence is returned, taking all

details into account

• System performance: route with 100 stops

optimized in seconds

• All routes are called for optimization in a high peak

in morning (parallel execution)

Benefits:

• Increase customer delivery fulfillment

• Pick-up and delivery cost savings

• Increase of productivity of new drivers


Case characteristics:

1. Use of pre-defined limits and

prices for the deliveries in each

time slot

2. Use booked orders to re-compute

dynamically the availability of time-

slots for new customers / new

orders

3. Adjust dynamically the price of

each time slot

Case Leading Retailer - time slot proposals to customers


Summary – Retailers and Carriers want to move up……

Basic

High

Medium

Basic

Service and

efficiency

focus

Less focus on

efficiency and

service level

Service level

focus

Medium High

Efficiency

focus

Basic

High

Medium

Basic

Customer

Service Level

Planning and

Execution Capabilities

Service and

efficiency

focus

Less focus on

efficiency and

service level

Service level

focus

Medium High

Efficiency

focus

Home Delivery

Company

High level e-commerce

shops, dedicated fleet

Most Courier Express

and Parcel companies


Summary - ORTEC offers solutions are ready to support your moves

ORTEC STRATEGIC network planning� Long-term

� Network analysis

� Supply chain design

ORTEC TACTICAL planning� Mid-term, periodic

� Estimated Volumes

� Territory assignment, Balanced Workloads

� Master plansORTEC OPERATIONAL planning� Daily

� Actual orders

� Available resources

� Time slotting

ORTEC REAL-TIME execution� Time slotting updates

� Dispatching,

� Communication

� Track & Trace

� Delivery

� Reporting

� ……


Agenda

� Please ask your question via the GoToWebinar question box

Questions


Follow up?

Possbile next steps with ORTEC:

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Contact ORTEC [email protected]


Discover more via www.ortec.com/retail

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Retail brochure


Retail Analytics

• Consumer Behaviour Analytics

• Supply Chain Analytics

Retail Store Delivery

• Supply Chain Design

• Tactical Planning

• Operational Planning



• Timeslot allocation

• Routing in the cloud


* Including Pick Up Points delivery

Retail Distribution Centers

• Automatic Warehousing and Control

• Workforce Planning and Scheduling

Webinar 1April 14 – online now

Webinar 2May 7 – online now

Webinar 3June 16

Webinar 47 July

View all retail webinars: www.ortec.com/retailwebinars