Route planning software OptiFlow offers Albert Heijn the necessary flexibility and optimization in their retail distribution network
Posted by Nathalie Göbel on Jul 11, 2022 10:17:50 AM
Albert Heijn’s distribution network is both extensive and complex, encompassing 1,100 Albert Heijn stores, 600 Gall & Gall shops, 530 Etos locations and seven home shop centers. With the use of route planning software OptiFlow, the retailer plans to capitalize on the network density of all 2,237 affiliated stores. As Martijn Beerepoot, project manager of distribution and transport, explains, "This would not have been possible with our existing route planning software. Luckily with this flexible Cloud solution, we are able to take the most complex rules and restrictions of our network into account."
The task of planning routes for a vast network is far from simple, and it becomes even more daunting as the retailer's network continues to expand. For instance, the collaboration between the BP petrol stations and Albert Heijn’s To Go shops. “Every location, small or large, has its specific characteristics. From time to time, we acquire existing stores such as Van Deen. This means that we continuously need to be able to respond and adapt to new situations.”
Network expansion requires flexible route planning software
According to Beerepoot, Albert Heijn’s growing retail distribution network primarily requires more flexible route planning software. “Despite the fact that our operations concern moving goods from one place to another, we demand quite a lot from the product. We provide delivery services to numerous locations, each with their unique characteristics and specific delivery windows. For example, Store A receives processed foods between 3 and 4 p.m., fresh foods between 8 and 9 p.m., and frozen foods at a time in between." At the same time, local restrictions must also be considered during the planning process, such as when trucks are allowed to enter town or city centers and the types of trucks permitted. “For instance, when entering the center of Amsterdam or Ghent, the largest truck is not suitable, so we must use a small box truck. These are important specifications that we must take into account in our planning."
Route planning software contributes to process control
Beerepoot and his team use OptiFlow on a daily basis. “We deliver the planning to the carrier, who then assigns drivers to each route”, says Beerepoot. "Our department operates based on locations, which means we consider the vehicles that are allowed to access each store. Some locations for example, are supplied with emission-free vehicles”. What Beerepoot also wants to emphasize is that the use of OptiFlow is a major step forward in process control. "Many transport departments still rely mainly on Excel, which creates a single point of failure within an organization since its use is heavily dependent on an individual's knowledge. By adopting this new solution, we have a robust, integrated planning application. Ideally, we would prefer to have as many activities as possible take place within this tool.”
Less pressure on the DCs
One of the goals Albert Heijn has set itself with the use of OptiFlow is reducing the peaks in activity at their distribution centers, so not all vehicles arrive and leave at the same time. Today, the planners try to accomplish this manually in the best way possible. “As a transport planner, you can manually move individual routes slightly forward or backward when peaks occur. This results in fewer simultaneous departures per hour. However, we have noticed that this is not the most optimal approach in practice." Albert Heijn has now identified a next improvement for which they want to call on the expertise of Conundra (PTV Logistics). The software will evenly distribute departures while generating the plan, eliminating the need for manual adjustments by planners."
Continuous improvement in route planning
Albert Heijn strives for continuous improvement in their planning results. The plans are frequently adjusted and compared to one another to ensure success. Albert Heijn was one of the first Conundra customers to use the OptiFlow AI Technology to calculate with which parameters they could achieve the best results. With OptiFlow DOE (Design of Experiments) for example, a large number of relevant configuration combinations can be experimentally calculated, in an intelligent way, to determine which minor adjustments positively impact the plan results. “Through comparison, we can steer towards the desired outcome”.
Responding to market problems
Continuous replanning and comparing leads to insight, says Beerepoot. “Previously, your job was done once you had a plan in place. Now, you have the opportunity to assess alternative plans against each other.” Beerepoot indicates that Albert Heijn is now better able to respond to what the market demands. For example, taking driver shortages into account. “OptiFlow empowers you to make a choice: Do I opt for the most affordable plan? Do I select the plan with the least number of kilometers, and therefore fewer CO2 emissions? Or do I opt for the plan with the least number of drivers, ensuring their duties are as efficient as possible but possibly adding a few extra kilometers to the plan? My point is, you can really visualize what you want to achieve”.
Taking driver preferences into account
Keeping drivers happy is just as important as optimizing their routes. Beerepoot explains that one way to achieve this is by taking their preferences into consideration. “For instance, drivers prefer to take their breaks when they are at a DC so that they can eat at the canteen instead of halfway along the highway. Therefore, we closely examine the route structure and set our drivers’ break settings in OptiFlow to match their preferences.” Additionally, a high-quality plan is crucial. “If our plan is not good enough, drivers could go work for someone else instead,” says Beerepoot. “For example, if there is a half-hour drive from a DC to a store and the driver will get stuck in traffic, we include this in the planning. OptiFlow takes traffic data into account, which enables us to provide quality plans.”
New algorithms with more computing power
To perform these calculations on a larger scale, more computing power is required than before. For this reason, Albert Heijn is co-investing in the development of greatly improved algorithms that allow the use of more powerful servers. This makes planning even faster and more cost-efficient. "In practice, this comes down to the use of super Cloud computers and very specific algorithms, that give us the same or even better plan results in much less time." This investment is of great value to Albert Heijn since it means their network plan no longer takes 220 hours but only a fraction of this time. Beerepoot adds, "Now we can make a new plan ten to fifteen times a year, instead of only three times a year. Eventually, we will have a new plan every week. This decreasing lead-time allows us to act more quickly, solving partial problems simultaneously and checking whether the KPIs are correct. This enables us to reduce the cost per order and increase our vehicles' load factor."
Both during and after the roll-out of the route planning software OptiFlow, there has been good and close cooperation between the parties, according to Albert Heijn’s project manager distribution and transport. “Conundra is a great and energetic partner with extensive knowledge. Above all, they speak our language”. Furthermore, he is pleased with the flexibility of the software, saying that new features are added to the standard platform every two weeks. He notes that as a customer, they can even provide input on what features are developed. One such feature, which prevents breaks from being scheduled too early on in the route, was developed based on their input. He adds, “It is great that OptiFlow is continuously developing".
Prepared for the future
Beerepoot acknowledges that the growing complexity of society is likely to pose new challenges over the years. For instance, Albert Heijn is committed to leading the way in eco-friendly driving, but incorporating electric vehicles into their retail distribution network effectively requires additional considerations during planning. Moreover, there are increasingly stringent location-specific restrictions to contend with. “On the ring roads of large Dutch cities, we can no longer use trucks that exceed a certain weight due to emissions or road capacity limitations. The software assists us in responding to these rapidly evolving societal changes."
Albert Heijn expects its network to further expand in the coming years, which will surely bring new challenges. However, together with Conundra (PTV Logistics), they are looking at a bright future in which every challenge can be transformed into a new opportunity.