Wincanton is a European leader in the design and delivery of advanced supply chain solutions.
Its 28,000 staff operate across Europe, producing an annual turnover of over £1.8bn. It is the UK market leader in grocery distribution, automated warehousing and petrochemical distribution. Wincanton operates a contract on behalf of a major petroleum company to deliver packed goods such as cans of oil to garage forecourts and petrol stations, and bulk lubricants to car workshops, dealerships and big manufacturing plants.

Wincanton pioneered the use of Intermediate Bulk Container (IBC) vehicles that are able to deliver both bulk liquid and packed goods which had improved vehicle utilisation. However, with fluctuating demand and an industry trend towards smaller, more frequent orders, Wincanton
needed to cope with peaks and troughs whilst still meeting customer Service Level Agreements (SLA). Wincanton used the vehicle routing package from Optrak, for a series of strategic supply chain modelling projects.

Major strategic analysis reveals the key to substantially reducing costs

Wincanton carried out a major strategic analysis that looked at all aspects of the distribution.

Supply chain modelling

We are constantly looking at new ways of doing things, to see if we can improve our service standards and to reduce costs.
Optrak is used to carry out a number of ‘what if?’ scenarios, for example, what if we change the fleet mix or location? This allows us to adapt the fleet as demand patterns change over time.”
Dean Hardy, Senior Planner

 

One of the key findings was that a low drop density combined with varying order volumes was driving vehicle utilisation down to as little as 20%. Service requirements were being met, but with high inter-drop distances, efficiency was being sacrificed.

Hardy modelled a variety of scenarios that looked at using larger or smaller vehicles and changing the fleet location. It became clear that for packed goods, unless a bulk order was also being sent to the same customer or geographic region, it wasn’t cost effective to deliver it using the in-house fleet.

Wincanton uses third party carriers such as ANC and Palletways, who are able to deliver packed orders at a relatively low cost. Further analysis showed that by moving the majority of packed goods onto these carriers it would free up the fleet, save money and reduce the amount of time
required for transport planning.

  
 

The introduction of carriers for small orders  

Wincanton turned to Optrak to integrate the use of carriers into the main routing decision making. A number of changes were made to the software to assist the planner and maintain the high level of planning automation. Wincanton now maintains up to date carrier pricing within Optrak. Whilst
rates and postal areas change over time, it is a simple process to update this data.


Optrak also groups orders by carrier. When this information is sent back to the Warehouse Management System, it allows the orders to be picked together and placed in a single trailer, which is then trunked directly to the carrier. This minimises the number of deliveries that are required.

 

Alongside other changes determined from the strategic project, the introduction of carriers into our supply chain has
resulted in a big increase in fleet utilisation directly leading to major savings.”

Ben Young, General Manager

Multi day strategic modelling

A number of factors are associated with modelling a multi-day delivery environment that increase the complexity of the task. As there is a four day SLA for deliveries, a key decision to be made is which bulk orders to deliver today, and which later. The choice of orders sent out on day one affects the availability of resources (drivers and vehicles) and the pool of outstanding orders for subsequent days. It is therefore not possible to review a strategy by looking at data covering a single day. The simulation needs to run for a number of days to provide meaningful results.

To support this, Optrak designed a strategic modelling framework that considers all orders for a two week period. The framework generates order sets based on a combination of what orders would have been available on a given day, and what orders were routed by Optrak within the
scenario on the preceding days. As each day is modelled, routed orders are removed from the pool and newly “arrived” orders added to it.

The framework allows multiple scenarios to be run and a comparison drawn against what actually happened over that two week period. Specific reports to assist with multi-scenario modelling were developed by Optrak.

 

Managing reports and KPIs using the data warehouse

Wincanton uses a number of standard reports that Optrak has supplied. In addition, Optrak has built a data warehouse for Wincanton. This holds details of all planned trips, orders and visits and is available for querying and reporting on operational trends and performance.

It is easy to use and has enabled us to carry out a wide range of historical analysis and reporting with the minimum of effort. We have written our own reports and queries. This has saved time and money and enabled us to report more precisely on our distribution requirements. We can quickly see if performance in one area has dropped and investigate why.”

Dean Hardy, Senior Planner

After operational planning has been completed, reports are run for every vehicle. These include: how many hours drivers are working; how much bulk and packed was delivered; kms driven and how much was spent on third party carriers. On a weekly and monthly basis, km per drop, utilisation rates, carrier tonnages and depot performance are tracked.

How Optrak helps with strategic modelling

When reporting, Wincanton can drill down to a fine level of detail, it is a simple process to export any data from
Optrak. Therefore if there is a specific data set that is of interest, it can be quickly extracted and immediately analysed.

We have got a very good relationship with Optrak and advice on modelling is always
available.” One example springs to mind, “on a project to look at how we deal with remote
orders, the distance from the nearest depot to each of the UK’s 3000+ postcode areas needed to
be calculated. Doing this manually is incredibly time consuming but the support team were able
to describe how to use Optrak to get the same results in just 20 minutes. This saved literally days
of effort.”

Dean Hardy, Senior Planner

Looking at the long term

Wincanton have recently completed another strategic review. This has enabled a further reduction in the fleet by 4 vehicles. All this was modelled on Optrak to provide a valid cost and service comparison.

Strategic modelling is a key part of our ability to deliver a constantly improving level of
service to our clients. Using Optrak, we have been able to determine how to reduce our vehicle
fleet by over 50% whilst still hitting our service targets. We appreciate its value as both a
strategic and operational tool.”

Ben Young, General Manager

Tim Pigden, Managing Director of Optrak comments, “Wincanton has established a first class
supply chain to deliver an efficient service to the end customer. Optrak is a proven modelling tool
that can cope with the most demanding and challenging distribution scenarios. It enables rapid,
accurate analysis based on real life data that can lead to significant cost savings.”