A fresh approach to vehicle routing has paid off for a logistics major which was recently awarded a six-year tender to handle BMW South Africa’s aftersales parts logistics.
“We went into this process with a new perspective and fresh eyes,” Sinti van den Berg of DSV told delegates at the annual Sapics conference in Cape Town recently. With BMW having eliminated secondary transport and storage from its supply chain, the direct implication for any logistics partner was longer travelling distances with shorter lead times.
“We realised that the solution lay in routing our vehicles differently,” said Van den Berg. “Understanding that it’s no longer companies that compete but rather supply chains, our solution had to deliver reliability and predictability to BMW while at the same time we had to price the logistics solutions from a centralised warehouse in Gauteng to all the dealers in the province for a six-year period.”
This because BMW insisted on a fixed price contract. Moving variable volumes to variable consignees according to a punctual, predictable schedule with a minimum of delays required out-of-the-box thinking.
“Our solution was a vehicle routing plan with a little bit of oomph,” said Van den Berg. Maximising vehicle capacity, minimising travelling distances and optimising the number of staff and hours worked were all incorporated, she said.
Rod Baxter, manager of aftersales parts logistics at BMW, said considering their outsourced logistics model, the biggest requirement of their service provider was consistency and predictability.
“We want to know we are getting the right parts to the right dealer on time and we want to know upfront what we are in for, for the duration of the contract, from a price perspective.” He said bidders needed to do their homework carefully to understand the routing, the loads and the delivery schedule to find the most efficient and effective way of doing this.
According to Van den Berg not only has their logistics solution resulted in a reduction in the number of vehicles required, but also a carbon emission decrease of nearly 33%.
“We reduced the number of vehicles being used by 21% while the travelling distance per route increased by 4%,” she said. “Short lead times over longer travelling distances while remaining competitive on pricing, predictable on delivery and agile on capacity has paid off.”
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We reduced the number of vehicles being used by 21% while the travelling distance per route increased by 4%. – Sinti van den Berg
