Custom Transport Management System

Client

Our client, one of the leaders in the online grocery market, was making 10 000 deliveries daily and aspired to increase that number to 50,000 within the next three years. However, the client’s transport management and route calculation system could not keep up with existing delivery demands and was stifling business growth.

Business Challenge

The legacy system was slow and inflexible. Poor route optimization capabilities and limited automation resulted in logistics managers spending too much time on manual, repetitive, and ineffective processes, low driver efficiency, high transport expenses, and a small percentage of same-day deliveries, which impaired customer loyalty and lowered profit margins.

The company sought a new TMS that would optimize and speed-up deliveries, improve automation, reduce costs, and support business growth. DataArt was engaged to tackle this challenge.

img

Solution

DataArt’s team was inspired by the algorithmically complex challenge of creating a system that would ensure optimal allocation of resources with minimum cost. The team consisted of four developers, two testers, a business analyst, a project manager, a subject matter expert, and a part-time designer.

During the six-week discovery and solution design stage, DataArt’s team evaluated the client’s order-to-delivery processes, fleet size, delivery windows, and cost structure. The team also examined the available off-the-shelf solutions and the amount of customization required to tune them to the client’s needs. The client and DataArt’s team agreed on building a custom TMS.

A fivefold increase in the daily number of orders processed without interruption

The team worked in a purely Agile environment, spending the first six weeks building a prototype routing system in time to test it on high-season deliveries around Christmas. The prototype was very well received by the client, who gave the green light to continue building the fully functional TMS. DataArt also helped the client migrate data to the new system, educate users, and improve processes to align with the new system. After ten and a half months, including a six-week discovery phase, the new TMS went into production, and it operates quite differently from the prior system.

The only involvement of the logistics manager is to confirm the number of vehicles available in each zone each day. The system then pulls delivery orders as they are submitted to the online store and calculates optimal routes in real-time, adjusting those routes as new orders come in. Because the system takes account of traffic when calculating optimal routes, delivery vehicles are routed based on real traffic conditions and actual delivery addresses.

ctms
Picture 1
ctms
Picture 2

Results

The new custom transport management system maximizes both vehicle operating capacity, and the total number of deliveries with efficiently consolidated loads, and requires no readjustment by the logistics manager. The system also automatically opens and closes delivery windows in the checkout process and can alter delivery prices to even out demand across all zones and delivery windows.

In addition, the new system utilizes inter-zone trips, i.e., if vehicles in one zone are free, they pick up orders from neighboring zones. Real-time routing based on actual orders means that the system closes off specific delivery windows only when actual maximum capacity has been reached. The system can now also accept additional orders that are nearby plotted routes. This level of precision allows the company to offer narrower delivery windows, a pleasant competitive advantage that is appreciated by busy customers.

The routing process takes place in real time, meaning that the warehouse can start packing orders once all orders for the day have been submitted.

Since implementing the custom TMS, the client has optimized its delivery processes and seen tremendous gains in efficiency along with reductions in average delivery time and cost, improved productivity and service quality and increased customer loyalty and profits.

Since implementing the custom TMS, the client has optimized its delivery processes and seen tremendous gains in efficiency along with reductions in average delivery time and cost, improved productivity and service quality and increased customer loyalty and profits.

The new TMS yielded the following specific benefits:

  • An increase in the number of orders processed without interruption (from 10,000 to 50,000 + per day)
  • A 10% increase in the number of orders delivered due to the ability to factor in the location, weight, and volume of each order
  • An increase in same-day deliveries
  • Expansion of the delivery area
  • Improved customer service due to more accurate order fulfillment
  • Possibility of narrower, more precise delivery windows
  • Maximized fleet operations (through maximized vehicle operating capacity and maximized total number of deliveries with efficiently consolidated loads)
  • Automated continuous route optimization without a need for human intervention
  • Dynamic pricing to align demand with delivery windows
  • Possibility for free deliveries due to a reduction in operational costs
  • A three-fold reduction of route-planning time
  • The system is automated, highly scalable, and supports business growth.

Solution Highlights:

Delivery verification and cost-of-sales calculation

for the selected interval on the designated route

Traveling salesman problem (TSP) solving

by means of a proprietary genetic algorithm based on a distance matrix provided by a third party

Flexible delivery wave scheduling and flexible cluster boundaries

when deliveries are made to pick-up points

Possibility of collecting data on traffic jams

from telemetry and thus avoiding third-party data providers

Automatic closing of delivery windows

when actual maximum capacity has been reached

Technologies

  • Java 8
  • SpringBoot
  • React (FE)
  • MySQL
  • Maven
  • Git
  • DockerText

How can we help?

Welcome
We are glad you found us
Please explore our services and find out how we can support your business goals.
Let's Talk