rf slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58...
TRANSCRIPT
![Page 1: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/1.jpg)
1
BACKGROUND
![Page 2: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/2.jpg)
ResearchContext
2
• Largefoodandbeverageretailer:13,000+domestic stores
• Distinctcategory:Highlyperishable, freshfoods
• Growthexpected:Whileonly10%ofvolumes,3-5xgrowthpredicted innextfewyears
Howshouldthefreshfoodsupplynetworkbedesignedtoaccommodateexpectedgrowth?
Picturesfrom:https://www.pexels.com/
![Page 3: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/3.jpg)
ToughProblem
3
MassiveFootprint
ComplexRouting
UncertainFutureConditions
?
![Page 4: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/4.jpg)
WhichApproachtoUse?
4
Methodology Output Requirements
IntegerProgrammingorSimulation
Optimal Solution PreciseInputs
Totalcostapproximation
Insights, andTradeoffs Estimates, ranges
![Page 5: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/5.jpg)
5
MODELLINGPROCESS
![Page 6: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/6.jpg)
DataCollection/Research
6
ModelDesign&Assumptions
Interviews
Visits+RouteRide
OrdersandSalesData
![Page 7: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/7.jpg)
ModelDesign
7
Costcalculationengine
CostperTote
GeneralAssumptions
NetworkDesigns
FleetAssumptions
![Page 8: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/8.jpg)
ModelDesign
8
Costcalculationengine
CostperTote
GeneralAssumptions
NetworkDesigns
FleetAssumptions
Demandassumptions:- Freshfoodvolumes- Non-freshfoodvolumes- Nodelocations- Storecount- Deliveryintervals- Fuel,wage,etc.costs ~200Stores
85kFreshFoodTotes/Yr
Diesel$2.1/Gallon
21FreshFoodItems/Tote
2-dayDeliveryInterval
![Page 9: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/9.jpg)
ModelDesign
Costcalculationengine
CostperTote
GeneralAssumptions
NetworkDesigns
FleetAssumptions
1:1Delivery(Trunk)- TrunkLoading- TrunkLinehaul- Unloading
Crossdocking(Node)- Sorting- Holding
1:ManyDelivery- BranchLoading- BranchLinehaul- StoreTour- DropFixed- DropFFVariable- DropNon-FFVariable
Current
![Page 10: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/10.jpg)
ModelDesign
Costcalculationengine
CostperTote
GeneralAssumptions
NetworkDesigns
FleetAssumptions
AlternativeSupplyNetworks
![Page 11: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/11.jpg)
ModelDesign
Costcalculationengine
CostperTote
GeneralAssumptions
NetworkDesigns
FleetAssumptions
NetworkDesignActivities: Current D2Store Pick-up ZoneSkip Co-location1:1Delivery(Trunk)TrunkLoadingTrunkLinehaulUnloading
Crossdocking(Node)SortingHolding
1:∞Delivery(Branch)BranchLoadingBranchLinehaulStoreTourDropFixedDropFFVariableDropNon-FFVariableSavingsinNon-FFSC
MappingSupplyActivitiestoNetworkDesigns
![Page 12: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/12.jpg)
ModelDesign
Costcalculationengine
CostperTote
GeneralAssumptions
NetworkDesigns
FleetAssumptions
Fleetassumptions:- Rangeofvehicleoptions
- Assumptions pervehicle
SizeRange
Van53’Truck
- ToteCapacity- DriverCount&Wage- Speed(Hwy&City)
- MPG(Hwy&City)- EquipmentHireRate- Maintenancepermile
- AnnualLease
![Page 13: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/13.jpg)
ModelDesign
13
53’TruckFreshFoodSupplier
OtherSuppliers
ConsolidatedDistributionCenter
Linehaul1 Linehaul2
StoreTours
DefinedRegion
CostCalculations
GeneralAssumptions NetworkDesign FleetAssumptions
CostsWage Fuel Main Lease
Time&DistActivities: Mins Miles1:1DeliveryTrunkLoadingTrunkLinehaulUnloading
CrossdockingSortingHolding
1:∞DeliveryBranchLoadingBranchLinehaulStoreTourDropFixedDropFFVariableDropNon-FFVariableSavingsinNon-FFSC
(TimeperTote)*(#ofTotes)*($perFTE)*(#of
FTEsforActivity)
(ActivityTravelDistance)*($perGallonFuel)*(#
ofVehicles)
(ActivityTravelDistance)*(Maint$perVehicleMile)*(#ofVehicles)
(ActivityTravelDistance)*(Maint$perVehicleMile)*(#ofVehicles)
![Page 14: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/14.jpg)
ModelDesign
14
53’TruckFreshFoodSupplier
OtherSuppliers
ConsolidatedDistributionCenter
Linehaul1 Linehaul2
StoreTours
DefinedRegion
CostCalculations
GeneralAssumptions NetworkDesign FleetAssumptions
CostCategory CostCalculationperActivityFuel (ActivityTravelDistance)*($perGallonFuel)*(#ofVehicles)
Wage (TimeperTote)*(#ofTotes)*($perFTE)*(#ofVehicles)*(Drivers/Vehicle)
Maintenance (ActivityTravelDistance)*(Maint$perVehicleMile)*(#ofVehicles)
Lease (ActivityTravelDistance)*(#ofVehicles)*(Lease$permile)
![Page 15: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/15.jpg)
ModelDesign:DistanceApproximation
15
LinehaulDistance TourDistance
Supplier, DC,CityCenterCoordinates
GreatCircleDistance*
RegionalCircuityFactor=
LinehaulDistances
Sqrt(StoresxRegionArea)
*Travellingsalesmanfactor
=TotalTourDistance
sqrt[~100storesdaily*2,500mi2]*
0.765=
350milestotourdailystores
![Page 16: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/16.jpg)
ModelDesign:ApproximatingFleetSize
16
Constraints
1. Volume:Atruckcanonlycarrysomanytotes.MinTrucksRequired=TotalDailyDemand/TruckCapacity
![Page 17: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/17.jpg)
17
Constraints
1. Volume:Atruckcanonlycarrysomanytotes.MinTrucksRequired=TotalDailyDemand/TruckCapacity
2. Time:Adrivercanonlyworkfor10hours,potentiallyexceeddeliverytimes.MinTrucksRequired=TotalTourTimeRequired/TourTimeLimitperVehicle
ModelDesign:ApproximatingFleetSize
![Page 18: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/18.jpg)
18
=Traveltime+Unloadingtime
Tourdistance*speed
stores*(fixed+variablestoppingtime)
Constraints
1. Volume:Atruckcanonlycarrysomanytotes.MinTrucksRequired=TotalDailyDemand/TruckCapacity
2. Time:Adrivercanonlyworkfor10hours,potentiallyexceeddeliverytimes.MinTrucksRequired=TotalTourTimeRequired/TourTimeLimitperVehicle
ModelDesign:ApproximatingFleetSize
![Page 19: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/19.jpg)
19
Constraints
1. Volume:Atruckcanonlycarrysomanytotes.MinTrucksRequired=TotalDailyDemand/TruckCapacity
2. Time:Adrivercanonlyworkfor10hours,potentiallyexceeddeliverytimes.MinTrucksRequired=TotalTourTimeRequired/TourTimeLimitperVehicle
=Traveltime+Unloadingtime
Tourdistance*speed
stores*(fixed+variablestoppingtime)
Linehaul80mins
TimeforTour8hrs
Loading40mins
10hrs– loading– linehaul– backhaul
ModelDesign:ApproximatingFleetSize
![Page 20: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/20.jpg)
20
FleetSize=LargerofTime&VolumeRequirements
Constraints
1. Volume:Atruckcanonlycarrysomanytotes.MinTrucksRequired=TotalDailyDemand/TruckCapacity
2. Time:Adrivercanonlyworkfor10hours,potentiallyexceeddeliverytimes.MinTrucksRequired=TotalTourTimeRequired/TourTimeLimitperVehicle
ModelDesign:ApproximatingFleetSize
![Page 21: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/21.jpg)
ModelDesign
21
53’TruckFreshFoodSupplier
OtherSuppliers
ConsolidatedDistributionCenter
Linehaul1 Linehaul2
StoreTours
DefinedRegion
CostCalculationEngine
GeneralAssumptions NetworkDesign FleetAssumptions
CostsWage Fuel Main Lease
Time&DistActivities: Mins Miles1:1DeliveryTrunkLoadingTrunkLinehaulUnloading
CrossdockingSortingHolding
1:∞DeliveryBranchLoadingBranchLinehaulStoreTourDropFixedDropFFVariableDropNon-FFVariableSavingsinNon-FFSC
(TimeperTote)*(#ofTotes)*($perFTE)*(#of
FTEsforActivity)
(ActivityTravelDistance)*($perGallonFuel)*(#
ofVehicles)
(ActivityTravelDistance)*(Maint$perVehicleMile)*(#ofVehicles)
(ActivityTravelDistance)*(Maint$perVehicleMile)*(#ofVehicles)
![Page 22: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/22.jpg)
ModelDesign:CostperTote
22
Costcalculationengine
Lightmodelallowsforrapidscenariotesting:
AnnualDemand Current D2Store Pick-up ZoneSkip Co-location1.0x $3.15 $7.03 $5.01 $6.50 $1.751.5x $2.71 $4.09 $4.04 $3.95 $1.681.6x $3.70 $3.88 $3.86 $4.71 $1.651.7x $3.13 $3.92 $3.70 $4.16 $1.681.8x $3.02 $3.74 $3.56 $3.96 $1.651.9x $2.93 $3.58 $3.50 $3.78 $1.632.0x $2.84 $3.44 $3.39 $3.63 $1.602.1x $2.76 $3.49 $3.28 $3.59 $1.582.2x $2.69 $3.93 $3.18 $4.03 $1.562.3x $2.66 $3.25 $3.09 $3.34 $1.592.4x $2.73 $3.30 $3.22 $3.44 $1.572.5x $2.67 $3.20 $3.14 $3.33 $1.562.6x $2.62 $3.10 $3.07 $3.23 $1.552.7x $2.61 $3.01 $3.00 $3.13 $1.582.8x $2.56 $3.06 $2.93 $3.12 $1.572.9x $2.51 $2.98 $2.87 $3.04 $1.563.0x $2.48 $2.91 $2.82 $2.96 $1.553.1x $2.48 $2.83 $2.81 $2.88 $1.583.2x $2.44 $2.89 $2.76 $2.88 $1.573.3x $2.41 $2.82 $2.71 $2.81 $1.563.4x $2.38 $2.76 $2.79 $2.75 $1.553.5x $2.45 $2.81 $2.78 $2.82 $1.583.6x $2.42 $2.75 $2.74 $2.76 $1.583.7x $2.39 $2.69 $2.70 $2.70 $1.573.8x $2.37 $2.64 $2.76 $2.65 $1.563.9x $2.37 $2.37 $2.77 $2.34 $1.594.0x $2.35 $2.64 $2.73 $2.61 $1.594.1x $2.33 $2.59 $2.70 $2.56 $1.584.2x $2.34 $2.25 $2.79 $2.21 $1.614.3x $2.32 $2.30 $2.76 $2.23 $1.614.4x $2.30 $2.55 $2.73 $2.48 $1.604.5x $2.28 $2.51 $2.70 $2.44 $1.604.6x $2.29 $2.28 $2.79 $2.18 $1.624.7x $2.66 $2.25 $2.76 $2.50 $1.624.8x $2.64 $2.47 $2.73 $2.72 $1.624.9x $2.62 $2.44 $2.71 $2.68 $1.625.0x $2.46 $2.23 $2.68 $2.29 $1.62
AnnualDemand Current D2Store Pick-up ZoneSkip Co-location1.0x $3.15 $7.03 $5.01 $6.50 $1.751.5x $2.71 $4.09 $4.04 $3.95 $1.681.6x $3.70 $3.88 $3.86 $4.71 $1.651.7x $3.13 $3.92 $3.70 $4.16 $1.681.8x $3.02 $3.74 $3.56 $3.96 $1.651.9x $2.93 $3.58 $3.50 $3.78 $1.632.0x $2.84 $3.44 $3.39 $3.63 $1.602.1x $2.76 $3.49 $3.28 $3.59 $1.582.2x $2.69 $3.93 $3.18 $4.03 $1.562.3x $2.66 $3.25 $3.09 $3.34 $1.592.4x $2.73 $3.30 $3.22 $3.44 $1.572.5x $2.67 $3.20 $3.14 $3.33 $1.562.6x $2.62 $3.10 $3.07 $3.23 $1.552.7x $2.61 $3.01 $3.00 $3.13 $1.582.8x $2.56 $3.06 $2.93 $3.12 $1.572.9x $2.51 $2.98 $2.87 $3.04 $1.563.0x $2.48 $2.91 $2.82 $2.96 $1.553.1x $2.48 $2.83 $2.81 $2.88 $1.583.2x $2.44 $2.89 $2.76 $2.88 $1.573.3x $2.41 $2.82 $2.71 $2.81 $1.563.4x $2.38 $2.76 $2.79 $2.75 $1.553.5x $2.45 $2.81 $2.78 $2.82 $1.583.6x $2.42 $2.75 $2.74 $2.76 $1.583.7x $2.39 $2.69 $2.70 $2.70 $1.573.8x $2.37 $2.64 $2.76 $2.65 $1.563.9x $2.37 $2.37 $2.77 $2.34 $1.594.0x $2.35 $2.64 $2.73 $2.61 $1.594.1x $2.33 $2.59 $2.70 $2.56 $1.584.2x $2.34 $2.25 $2.79 $2.21 $1.614.3x $2.32 $2.30 $2.76 $2.23 $1.614.4x $2.30 $2.55 $2.73 $2.48 $1.604.5x $2.28 $2.51 $2.70 $2.44 $1.604.6x $2.29 $2.28 $2.79 $2.18 $1.624.7x $2.66 $2.25 $2.76 $2.50 $1.624.8x $2.64 $2.47 $2.73 $2.72 $1.624.9x $2.62 $2.44 $2.71 $2.68 $1.625.0x $2.46 $2.23 $2.68 $2.29 $1.62
IncreasingDemand EachNetworkDesign LowestCostTransport
TotalCost/Tote
Allassumptionsandnetworkdesignscanberapidlytestedasabovetogeneratekeyinsights.
![Page 23: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/23.jpg)
23
RESULTS&INSIGHTS
![Page 24: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/24.jpg)
24
High-LevelResults:NetworkCostswithIncreasingDemand
-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x
Cost/FFTote
NetworkDesignCost/FFTote
Current D2Store Pick-up ZoneSkip Co-location
![Page 25: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/25.jpg)
Insight1:Co-LocationSaves
25 -$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00
1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x
Cost/FFTote
NetworkDesignCost/FFToteCurrent D2Store Pick-up ZoneSkip Co-location
$1.37
$1.19
$1.71
$7.03
$4.93
$5.31
$1.67
$3.15
$7.03
$5.01
$6.50
$1.75
Current
D2Store
Pick-up
ZoneSkip
Co-location
NetworkDesignCosts,1xCurrentFFDemand(TotalCostperTote)
1:1:Delivery Crossdock 1:∞Delivery
44%savingsfromcurrent,or$120kannually
Savingscontinue,thoughnarrowto$70kat5xdemand
![Page 26: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/26.jpg)
Insight1:Co-LocationSaves
26
Furtherpointsforinvestigation:
- Over5years,theestimatedsavingsofco-locationwillbe~$425,000…
….ArethecostsofmovingthesuppliertotheDCjustified?
- Supplierco-locationwithoneDCmayincreasecoststootherregionalDCs…
….WhichregionalDCmeritsco-location?
![Page 27: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/27.jpg)
Insight2:DedicatedSupplyNetworksLackEconomiesofScale
27
-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x
Cost/FFTote
NetworkDesignCost/FFTote
Current D2Store Pick-up ZoneSkip Co-location
Dedicatedsupplynetworksonlymakefinancialsenseoncefreshfooddemandapproaches4.0xcurrentlevels.
Why?Trucksareunderutilizedatlowdemandlevels:
Atlowdemand, fleetsizeisdrivenbytimeconstraints;thereforevehiclesareunderutilized, increasingcost/tote.
![Page 28: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/28.jpg)
Insight3:ToteUtilizationImpactsCosts
28
• At 21 items per tote, average utilization is only 51%• Denser packing and/or smaller tote sizes can achieve savings
21%
34%24%
25%32%
-
$200
$400
$600
$800
$1,000
$1,200
1.0x 2.0x 3.0x 4.0x 5.0x
Cost/Year(0
00s)
FreshFoodDemandGrowth
FreshFoodDeliveryCostperYearforCurrentNetworkCurrentUtilization:51% TargetUtilization:75%
![Page 29: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/29.jpg)
10.0
10.0
10.0
10.0
10.0
6.1
1.0
5.6
2.3
4.0
6.2
4.0
6.2
3.3
6.2
Current($2.46/tote)
D2Store($2.23/tote)
Pick-up($2.68/tote)
ZoneSkip($2.29/tote)
Co-location($1.62/tote)
TimetoSale,5xBaselineDemand(Hours)
Production In-Transit DeliveryWindow
Insight4:CostvsTime
29
Selecting vehicles for speed – instead of cost – can reduce store deliveries by 6 hours ata 15-18% premium.
10.0
10.0
10.0
10.0
10.0
6.1
1.0
5.6
2.3
4.0
6.2
4.0
6.2
3.3
6.2
7.7
15.0
8.3
14.5
9.9
Current($2.46/tote)
D2Store($2.23/tote)
Pick-up($2.68/tote)
ZoneSkip($2.29/tote)
Co-location($1.62/tote)
TimetoSale,5xBaselineDemand(Hours)
Production In-Transit DeliveryWindow Backroom
Does faster mean fresher? Despite faster delivery, time-to-customer will not bereduced given current production schedules
![Page 30: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/30.jpg)
Insight5:PolicyImpactsonFreshness
30
Current policy to delay production leaves fresh product out of customer reach for up to13 hours:
12 10 6 13 42
0 6 12 18 24 30 36 42 48 54 60 66 72 78 84
CurrentSchedule
FreshFoodsOrderthroughSalesCycle
OrderHold Production In-Transit DeliveryWindowBackroom StoreShelf Extension
12PM 6AM(+42hrs)25hrs idletime
![Page 31: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/31.jpg)
Insight5:PolicyImpactsonFreshness
31
Rapid delivery + Immediate Production Policy =• Product on-shelf 24 hours earlier• 13 hours fresher
![Page 32: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/32.jpg)
12 10
10
6
6
13 42
54 12
0 6 12 18 24 30 36 42 48 54 60 66 72 78 84
CurrentSchedule
PushedSchedule
FreshFoodsOrderthroughSalesCycle
OrderHold Production In-Transit DeliveryWindowBackroom StoreShelf Extension
6AM(+18hrs)
12PM 6AM(+42hrs)
6PM(+72hrs)
6PM(+96hrs)
Insight6:LongerDeliveryIntervalsarePossible
32
Rapid delivery + Immediate Production Policy + 12-Hour Shelf-life Extension =• Product on-shelf 24 hours earlier• 12 hours fresher• 3-Day Delivery Interval
3-DayInterval
Impact:D2StorecomparabletoCurrentnetworkdesigncostat3xDemand.
![Page 33: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/33.jpg)
Conclusion:TheApproximationModel
33
Generates Insights & Trade-Offs:• Co-Location is the lowest cost option• Dedicated supply network costs will drop with economies of scale• Improving tote utilization saves costs• Speed gains are possible with limited cost increases• Better freshness is achievable with revised policies• Delivery intervals can be extended
First-Cut for Further Analysis:• Optimization methods• Operational studies• Pilots
Extendable:• Additional regions• Alternative network designs• Other companies or products
![Page 34: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/34.jpg)
34
Questions, Comments, Suggestions? Use the Discussion!
![Page 35: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/35.jpg)
35
BACK– UPSLIDES
![Page 36: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/36.jpg)
36
High-LevelResults:CurrentDesign
x
FleetRequired1:1-#xSize 1x'36 1x'48 2x'26 2x'26 2x'36 2x'36 2x'36 2x'48 2x'48 2x'48 3x'361:∞-#xSize 9x'26 11x'26 8x'48 8x'48 9x'48 10x'48 11x'48 12x'48 14x'48 15x'48 14x'53
$3.15$2.78 $3.02
$2.69 $2.62 $2.48 $2.38 $2.37 $2.34 $2.29 $2.46
10.3hrs9.6hrs
12.5hrs 12.9hrs12.3hrs 11.9hrs 11.8hrs 11.7hrs 11.3hrs 11.4hrs
12.3hrs
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
1.0x 1.4x 1.8x 2.2x 2.6x 3.0x 3.4x 3.8x 4.2x 4.6x 5.0x
MaxHrstoDelivery
Cost/Tote
FreshFoodDemandMultiple(Base:85,000totes)
CurrentNetworkSensitivity toDemand1:1:Delivery Crossdock 1:∞Delivery DeliveryHrs
![Page 37: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/37.jpg)
FleetAssumptions
37
Equipment Vans '26Truck '36Truck '48Truck '53TruckTotalPalletCapacity pallets/equipment 2.9 12.0 18.0 24.0 26.0ToteCapacity totes/equipment 86 360 540 720 780Drivers perequipment 2.0 2.0 2.0 2.0 2.0DriverWage $/hour $12.0 $16.0 $18.0 $18.0 $18.0HighwaySpeed miles/hr 50.0 50.0 50.0 50.0 50.0CitySpeed miles/hr 20.0 20.0 15.0 15.0 15.0FuelConsumption(Hwy) miles/gallon 16.7 7.7 7.1 6.7 6.7FuelConsumption(City) miles/gallon 16.7 7.7 7.1 6.7 6.7EquipmentHireRate $/mile $3.0 $8.5 $10.0 $10.0 $10.0VehicleMaintenance $/mile $1.0 $1.0 $1.0 $1.0 $1.0VehicleAnnualLease $/equipment $13,333.3 $60,000.0 $70,000.0 $80,000.0 $90,000.0
![Page 38: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/38.jpg)
38
– OR–
Costcalculationengine
DemandAssumptions
NetworkDesigns
FleetAssumptions
Paralleltransport costcalculationforeachvehicle
Mincostoption
Cost/Tote
ModelDesign:VehicleSelectionusingParallelCalculation
Whichoptionismostefficient?
![Page 39: RF Slides 2...1.7x $3.13 $3.92 $3.70 $4.16 $1.68 1.8x $3.02 $3.74 $3.56 $3.96 $1.65 1.9x $2.93 $3.58 $3.50 $3.78 $1.63 2.0x $2.84 $3.44 $3.39 $3.63 $1.60 2.1x $2.76 $3.49 $3.28 $3.59](https://reader034.vdocuments.us/reader034/viewer/2022050523/5fa6d87160c7e745035bbd25/html5/thumbnails/39.jpg)
ResultsunderBaselineConditions
39
10.0
10.0
10.0
10.0
10.0
4.8
3.0
2.3
1.4
5.5
7.0
6.9
6.9
5.5
9.7
12.0
10.2
10.9
13.1
42.0
42.0
42.0
42.0
42.0
Current($3.71/tote)
D2Store($8.96/tote)
Pick-up($6.70/tote)
ZoneSkip($8.00/tote)
Co-location($2.10/tote)
TimetoSale,1xBaselineDemand(Hours)
Production In-Transit DeliveryWindow Backroom StoreShelf
6AM(+30hrs)12AM
$1.37
$1.19
$1.71
$7.03
$4.93
$5.31
$1.67
$3.15
$7.03
$5.01
$6.50
$1.75
Current
D2Store
Pick-up
ZoneSkip
Co-location
NetworkDesignCosts,1xCurrentFFDemand(TotalCostperTote)
1:1:Delivery Crossdock 1:∞Delivery