Following the Assignment Module shown in the foreground, the Routing Module goes into the routing details (background).

SePRO is a software package based on CHIP V5 that handles problems of distribution at the strategic, tactical and operational levels. At the strategic level, the SePRO Assignment module allows organisations owning several warehouses to determine which customer to serve from which warehouse. It optimises distribution costs by considering average order quantities and distance travelled, while taking into account end-user preferences.

Then, the SePRO Routing module takes over, calculating optimal tours for lorries, while considering various factors such as loading capacity, resource availability, geographical constraints, etc., and minimising the number of lorries needed. Such a plan may take several days to implement.

Finally, the SePRO Loading module handles the operational problem of loading each lorry in 3-dimensions, given the box sizes and their destinations, so as to ensure accessibility at each stop of the tour. This module is adapted from YukPLAN (Planning System for Cargo Loading), another CHIP solution developed by EBI.

Eczacibasi Bilgi Iletim (EBI) is the IT company of the Eczacibasi corporation in Turkey, established since 1940. Its major activities are pharmaceuticals, building material and consumer products.

• Nationwide : 7300 people
• Business Turnover : US$ 1.2 billions (1996)

Founded in 1989, EBI now has 80+ employees. Its mission is to enable clients to use IT to increase their competitive edge.

SePRO Assignment Module

This module is specially designed for multi-depot transport systems, and determines the optimum assignment of the customers to the warehouses with the objective of travelling cost minimisation. The cost structure can be specifically designed according to the company's strategy, such as distance or cost minimisation.

The constraints handled include:

• minimum stock limits in the warehouses,
• all orders must be satisfied unless there is inadequate inventory,
• a warehouse may send goods only to certain customers or may handle only specific goods.

Main report outputs of the module are:

• total transportation cost
• for each warehouse, customers to serve, list of goods to ship
• trans-shipment details between warehouses.

The same information can be obtained from SePRO powerful graphical user interface.

SePRO Routing Module

The objective function to be minimised for finding the routes is the cost defined for a route. This again can be specifically designed according to the company 's strategy. It can be a piece-wise function depending on the number of nodes visited in one route or a distance based cost definition, etc

The constraints handled include:

• limit on the number of nodes visited in one route (i.e. taken by the same lorry)
• volume and/or weight capacity limits of lorries
• vehicle preferences of customers
• preferences such as : some nodes should not be visited together by the same lorry
• due to some geographical constraints, some nodes cannot be connected directly.

Main report outputs of the module are:

• routes constructed, number of lorries used
• for each lorry, the sequence in which customers are visited
• goods carried on each lorry

Reference Site

The SePRO Routing Module was installed at PROCTER & GAMBLE in Turkey. P&G is a world-wide leader in house-hold goods such as laundry, cleaning, health and beauty care, paper products and oral care. With some 415 employees, P&G reaches out to 2000+ distribution points all over Turkey from its single depot at Istanbul, with 300+ shipment orders daily.

It is fully integrated within P & G's Order and Shipment Control System OSCS, running on AS 400. The CHIP application uses a HP-Apollo platform and is fully automatic using time-based triggers to extract data from OSCS, compute ideal routes and transfers results back to OSCS.

Impact on the Planning Process

According to the end-users, some 87% of the time spent daily for route preparing and checking is saved.

Today, the full planning process is handled by only two junior members in spite of the increased work volume. The planners now have the time to procure suitable vehicles and react to other unexpected problems. This translates to an appreciable gain in reactivity : up to 1 day of shipping lead-time for orders that are rushed or late.

Impact on P & G's Business

After a six-month trial period ending in July 1996 where the system is used daily, the P&G IT Manager Dr. Levent Onur gave a review of its overall performance:

1. Vehicle loads have been increased from 89% to 94%.
2. Number of stations visited per unit product was decreased from 3.9 to 3.3. This is an indication of the degree of route optimisation. Better plans require less stations to be visited.

Dr. Onur stated that the initial 5% improvement goal was achieved and that SePRO is used systematically in P&G's daily logistic operations.

Authors: Dilara KOSEOGLU, Inanç YILDIRIM, Cüneyt VANLI EBI Istanbul