International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 09 Issue: 08 | Aug 2022
p-ISSN: 2395-0072
www.irjet.net
REDUCTION OF LOGISTICS COST BY OPTIMIZING THE DESIGN OF SUPPLY CHAIN NETWORK FOR WHOLESALE DISTRIBUTION COMPANY Chetan N1, Harish D2, Nikhileshwari B K3, Deepu M4 1Assistant
Professor, Department of Industrial Engineering and Management, Dr. Ambedkar Institute of Technology, Bengaluru-56 2, 3, 4 Students, Department of Industrial Engineering and Management, Dr. Ambedkar Institute of Technology, Bengaluru-56 ---------------------------------------------------------------------***--------------------------------------------------------------------The logistics cost of A4 DC has increased drastically over a Abstract - Supply chain network optimization makes use of technology and resources to improve efficiency and performance in a supply chain network. The work was carried out in a wholesale distribution company, the company provides custom solutions to meet the regional and International needs of its wholesale and retail customers.
period of 6 months compared to other outlets. A4 unit needs the reduction of Logistics cost by 3.6%.
A branch of wholesale distribution company in comparison with other branches incurring more than estimated logistics and distribution costs, due to which the monthly revenue was not up to the target. According to the data, it was estimated that in wholesale company 3.6% (7.17 Crores) was the logistics cost particularly the Transportation cost. In the data it is evident that optimizing the supply chain network and applying Machine learning and GurobiPy Optimization Software will reduce cost within direct control from Transportation and logistics team.
Table 1: Logistics cost breakdown table
The costs associated with Logistics cost (Rs.7.17 Crores breakdown) includes
Existing Supply chain network design is causing increased logistics cost the reasons include:
Further, the project can be used as a standard to reduce the logistics costs of other branches. This percentage of reduction in logistics cost will increase the company’s profit by efficiently optimizing the network.
a) Improper Demand Forecasting b) Supplier Reliability
2. OBJECTIVES
Key Words: Supply chain and Logistics Cost, Machine Learning, Supply Network Optimization, Wholesale 1. Distribution Company, GurobiPy optimization Software, Logistics cost.
1. PROBLEM STATEMENT Considering the Logistics costs of 5 distribution centers namely A1 Outlet, A2 Outlet, A3 Outlet, A4 Outlet and A5 Outlet. The bar graph is plotted using Logistics and Distribution Cost (in Crores) against Revenue in Rupees.
To Reduce logistics cost by optimizing the supply chain network design The logistics cost of A4 Distribution Centre incurring 7.17 Crores which is more than the main distribution Centre located in A1, hence there is a need to reduce logistics cost. 1.
To forecast the demand using Machine Learning algorithm: Considering the previous sales data of daily commodities distributed by A4 Distribution Centre, the demand is forecasted using machine learning algorithm.
2.
To select the suppliers based on distance using Machine Learning algorithm: Given that the quality and quantity of the daily commodities procured is known, appropriate supplier will be chosen based on distance and on-time delivery using machine learning algorithm.
Chart 1: Logistics cost Distribution graph
3. To optimize the existing cross docking technique: The supply chain network design is optimized based on the data acquired from demand forecast and
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