Magazine Article | November 1, 2004

Fleet Optimization Software Delivers Efficiencies For Furniture Retailer

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Automated route scheduling, along with a wireless communications gateway, reduces the number of trucks needed and narrows customers' delivery windows.

Integrated Solutions For Retailers, November 2004

Few things in everyday life are more annoying than being trapped at home, waiting for merchandise to be delivered "sometime" during what usually turns out to be a very long day. This was among the problems Tanguay Furniture (Quebec) sought to address when it tested and subsequently implemented a route optimization system designed to replace its paper-based method of formulating delivery routes.

Tanguay Furniture operates 12 furniture stores in Canada and delivers products to customers via its own fleet of 60 trucks. The retailer's trucks make more than 140,000 deliveries each year, with 500 to 600 deliveries occurring on a typical day. That average increases to 1,000 daily deliveries during the peak season. While it wasn't entirely impossible for the merchant's logistics department to plot daily delivery routes without the help of a computer, it became obvious two years ago that automating the process would enhance customer service while reducing operating costs.

"We wanted to optimize our routes and efficiently sequence our stops," says Steve Thiboutot, Tanguay Furniture's software director. He and his colleagues chose A.MAZE Routes, a fleet scheduling optimization solution from GEOCOMtms (Quebec), after testing the system for three months. The pilot test demonstrated an 11% improvement in delivery-related costs, an enhancement Thiboutot attributes to the software's geocoding component and use of digital maps. Geocoding entails assigning a latitude-longitude coordinate to an address; once such a coordinate is assigned, the address can be displayed on a map or used in a spatial search.

The software resides on Tanguay's Microsoft (Redmond, WA) Windows NT-based server. Once each day, the program receives order data from the retailer's order management system. A constraint-based fleet routing engine then uses genetic algorithm optimization techniques, geocoding, and a map component to devise an optimal route and sequence of stops for each vehicle. In doing so, it takes into account such constraints as highway vehicle capacity limitations; low bridges; turn restrictions on various roads; and the existence of one-way streets, toll roads, "no-truck" roads, medians, and routes prohibiting hazardous material. The system also makes automatic routing adjustments in accordance with the amount of time needed to complete individual deliveries given the number of pieces and whether stairs are involved. Furthermore, it takes into account customers' delivery time window preferences. An intuitive address-correction utility helps users purify the geocoding data, compensating for bad spelling coming from the external order entry systems.

Wireless Gateway Allows Immediate Communications With Drivers
A wireless gateway communication feature provides real-time feedback and response for tracking and status notification, enabling immediate response actions. For example, if a vehicle is running late, the driver can use a mobile handheld device to notify the dispatcher and the system. Stops can then be automatically rescheduled and the changes communicated back to the driver.

Thiboutot says the route optimization performed by the solution currently yields low double-digit operating savings that are somewhat higher than those achieved in the pilot test. Through enhanced delivery efficiency, the retailer has also reduced the number of trucks it sends on the road by an average of one per day. Route coordination now requires the attention of one employee rather than two. The staff member in charge of this task completes it in one hour, freeing him up to handle other logistics-related matters, significantly reducing labor costs. Customers' requests for more specific delivery times (for instance, between 10 a.m. and noon rather than between 10 a.m. and 5 p.m.) are easily accommodated, according to Thiboutot.

He adds that it took Tanguay Furniture's IT department three days to design the interface between its order management system and the new application. Improving the former to better model order service duration required an additional eight days. Identifying and structuring the basic information to be shared between the routing and order management platforms hastened along these two projects.

"Accurate, effective routing has made all the difference for us in terms of operating costs and efficiencies, as well as where customer service is concerned," Thiboutot concludes. "And given the scalability of the system, it should accommodate our needs for the foreseeable future."

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