Kolomensky Bakery: handling high accurate delivery of more than 400 tons of baking goods to 8000+ stores daily.

  1. Challenge
    Use transport fleet more efficiently and spend less on product delivery
  2. Solution
    Switch to dynamic planning and start using a state-of-the-art monitoring solution
  3. Results
    Anticipated 7% reduction on transportation costs
About the partner
Kolomensky Bakery produces 400 tons of baked goods and 40 tons of confectionery products every day, distributing to more than 8000 stores in Moscow and the surrounding area. The company's monthly revenue exceeds 1 billion rubles (the equivalent of well over 10 million dollars).
Special demands on bread delivery

As a company that produces perishable items, Kolomensky bakery has to deal with some unique logistics challenges every day. People want their bread fresh, which is why 70% of it is sold in the morning. This means that Kolomensky has to stick to a very strict timeframe when delivering their bread to stores. For the most part, they deliver at night and early in the morning, so that their loaves are already on the shelves when the first customers come in. 

Kolomensky relies on transport companies and 3PL providers to deliver their products. However, the company wants to maintain control over the delivery process, so they plan and monitor the delivery routes in-house.

Optimizing delivery planning
For a long time, Kolomensky Bakery used standard zone-based route planning. They divided the delivery area into zones and assigned permanent drivers to them. The benefit of this approach is that drivers who consistently work in their own zones gradually develop expertise and get to know the unique aspects of each client. 

The drawback is that the zone-based planning system doesn't adjust to changes in demand, leading to poor use of delivery resources. Another important point is that drivers are people with their own needs: they go on vacation, need medical leave, or quit the job, which completely negates the main advantage of the system. 

Looking for a way to make better use of their resources, Kolomensky Bakery turned to RouteQ – an innovative route optimization provider that offered a new approach: dynamic route planning. The delivery area is still divided into zones, but these new zones are larger. This gives the routing algorithms more options to work with, resulting in optimal routes. Within these larger sectors, the algorithm selects the number of drivers needed to meet the current demand.
RouteQ is a logistics platform that helps companies build optimal delivery routes. The platform’s algorithms go over millions of combinations in a matter of minutes to find the perfect route option. Traffic is also taken into account: RouteQ knows the average speed of every road segment in the delivery area at different times of day.

Here’s how Kolomensky benefited from dynamic route planning:

  1. Drivers’ experience is still an asset. Larger zones don’t mean you can’t give priority to drivers who are familiar with a particular area. Despite the change, the company can still benefit from the experience its drivers have built up over the years.
  2. Flexible sector boundaries. Some delivery points are located near the borders of these larger zones, and sometimes it makes more economic sense to use a vehicle from a neighboring zone to deliver an order. The algorithm can route deliveries to vehicles serving either zone A or zone B, depending on which is most cost-efficient.
  3. Revised agreements with contractors. Kolomensky now pays for deliveries based on the actual use of vehicles. As an added bonus, they no longer need to keep vehicles in reserve, and they’ve managed to maximize the use of each vehicle. As a direct result of covering more addresses per route, the company anticipates a 7% reduction in delivery costs.
Monitoring deliveries

Kolomensky Bakery has 500 trucks running every day, serving more than 8000 outlets. Communicating with all vehicles is an important task that takes up to 20% of the commercial department’s time: operators need to resolve disputes, exchange information about any changes, and answer questions about delivery times. 

To make things easier, Kolomensky Bakery decided to focus on developing a transparent supply chain with its retailers. The greater the distance from the main warehouse, the more essential transparency is since it directly affects the quality of customer service.

With this goal in mind, Kolomensky Bakery is now implementing a delivery monitoring solution by RouteQ. Each driver will use a mobile app where they’ll see the current delivery status while on the route. This will give logistics operators a clear, real-time picture of the delivery situation for all vehicles. 

The new automated system has performed well: Kolomensky Bakery is already spending less time on interaction issues. After they fully implement the solution, the company expects that logistics specialists will spend no more than 5% of their time on solving communication issues, which will significantly optimize their work. 

Implementing RouteQ algorithms: results and figures
  1. The transition to the new planning system is expected to cut delivery costs by about 7% thanks to more efficient use of vehicles and the new billing arrangement with contractors
  2. Full monitoring should reduce the time the commercial department spends on dealing with interaction issues from 20% to 5%
  3. When a new production site opened, it only took a few hours to redistribute delivery zones, compared to several days using the previous system  
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Fri Jan 14 2022 16:54:58 GMT+0300 (Moscow Standard Time)