Annual Distribution Budget in the Beverage Industry: A Case Study

• Type: Article in International Scientific Journal
• Date: 2014

Authors

Luis Guimarães (Author) FEUP; Pedro Amorim (Author) FEUP; Sperandio, F (Author) Other; Fábio Moreira (Author) Other; Bernardo Almada Lobo (Author) FEUP

Journal

Title: Interfaces

Vol. 44 No. 6

Pages: 605-626

ISSN: 0092-2102

Publisher: Institute for Operations Research and the Management Sciences

Indexing

ISI Web of Knowledge - 4 Citations

Scopus - 5 Citations

Other information

Authenticus ID: P-00A-0NA

DOI: 10.1287/inte.2014.0747

Abstract (EN): Unicer, a major Portuguese beverage company, improved its tactical distribution planning decisions and study alternative scenarios for its supply strategies and network configuration as result of an operations research (OR)-driven process. In this paper, we present the decision support system responsible for this new methodology. At the core of this system is a mathematical programming-based heuristic that includes decision variables that address transportation and inventory management problems. Unicer runs a set of production and distribution platforms with various characteristics to fulfill customers demand. The main challenge of our work was to develop a tactical distribution plan, which Unicer calls an annual distribution budget, as realistically as possible without jeopardizing the nature of the strategic and tactical tool. The company had a complex tactical distribution planning problem because of the increasing variety of its stock-keeping units and its need for a flexible distribution network to satisfy its customers, who demand a very fragmented set of products. Atypical flows of finished products from Unicer's distribution centers to its production platforms are a major cause of this complexity, which yields an intricate supply chain. The quality of the solutions we provided and the implementation of a user-friendly interface and editable inputs and outputs for our decision support system motivated company practitioners to use it. Unicer saves approximately two million euros annually and provides better information to its decision makers. As a result, these decision makers now view their operations from a more OR-based perspective.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 22