Regional Distribution Centers Research Articles

Simulating long-term performance of regional distribution centers in archipelagic logistics systems

Indonesia has reevaluated its archipelagic logistics system to implement a strategic shift from a point-to-point network to a hub-and-spoke network, with a plan to establish seven new regional distribution centers (RDCs). To supplement the previous qualitative assessment of the plan and to potentially justify continuing with its implementation, this paper aims to evaluate the prospective long-term performance of the planned RDCs within a hub-and-spoke (HS) network. The chosen methodology for this analysis is a hybrid of optimization and simulation, using an agent-based modeling and simulation platform that incorporates a geographic information system (GIS) element to provide a realistic geographical context. This constitutes a relatively novel innovation in logistics research. Experiments were developed to estimate the logistics performance of the hub-and-spoke network and planned RDCs, as well as to identify potential problems such as bottlenecks at the RDCs and the relative (in)efficiency of the selected multimodal transport. Transport costs, inventory costs, and the order backlog of RDCs are evaluated based on the average results from 100 replications. Outcomes from the model are validated against empirical data on Indonesia’s logistics costs from the World Bank. Model results indicate that the hub-and-spoke network performs better than the point-to-point network when it comes to transportation costs. Since this is found to be the dominant element of total logistics costs, appropriate modal choice and route optimization are, therefore, critical to reducing logistics costs. The planned RDCs are found to have significant imbalance in their loadings, which is likely to produce bottlenecks. The paper concludes that a planned move to a hub-and spoke system is appropriate and that the planned investment in the RDCs is therefore justified. However, there is a need to streamline the predicted loadings at the RDCs to avoid bottlenecks. Our results suggest that the government should reopen the case and reevaluate the locations and coverage of each RDC. More generically, it is concluded that the application of hybrid optimization and simulation using agent-based modeling and simulation is feasible and the methodological approach adopted herein is generalizable to other archipelagic logistics systems.

Convenience versus sustainability

Convenience versus sustainability

Profit maximizing coalitions with shared capacities in distribution networks

We study the distribution network structure of multiple firms in the context of demand sensitivity to market offers. The problem consists in determining the profitability of horizontal collaboration between firms in a collaborative distribution schema. It considers the case of a set of regional distribution centers (DCs) where each DC is initially dedicated solely to one firm’s distribution activities and studies when it is beneficial that the DC owners collaborate through sharing their storage-throughput capacity. Such strategic decisions are made in order to improve the distribution capabilities of firms in terms of response time and cost-efficiency compared to the stand-alone situation. The problem is modeled as a coalition formation game in a cooperative framework, and we propose a collaborative distribution game with profit maximization. Three sharing mechanisms are modeled and tested: egalitarian allocation, proportional allocation, and Shapley value. The collaboration decision conditions for a given firm are analytically derived according to the sharing method considered and used to enhance the solution approach. Our numerical results clearly highlight the impact of this innovative collaboration opportunity on the firms’ performance in terms of distribution cost savings and revenue increases. An observed behavior is that the formation of several sub-coalitions prevails over the formation of a grand coalition, and that different cost sharing methods can lead to different sub-coalitions. We also provide managerial insights on the appropriate size of a coalition in various business instances tested, and on the key drivers that foster horizontal collaborative behavior among firms.

Analytic Hierarchy Process Modelling of Location Competitiveness for a Regional Logistics Distribution Center Serving Northeast Asia

Purpose - As the global product network expands through both internationalization and diversification of the multimodal transportation system, corporate strategies have shifted to emphasize the importance of a high value-added international logistics system. To guide policies and strategies to attract relevant industries, this study aims to analyze the location competitiveness of regional logistics distribution center to serve Northeast Asia. Design/methodology - Multi-criteria techniques are considered to offer a promising framework for evaluating decision-making factors. This paper employed an analytic hierarchy process to analyze the hierarchal structure of determinants for selecting the location of a regional logistics distribution center. Adopting both qualitative and quantitative evaluations, this study suggest political implications for a regional logistics distribution center development, such as the direction of political support, service differentiation and infrastructure development. Findings - This study developed a location competitiveness evaluation model, based on the case study of the major port-cities in Northeast Asia. Evaluation model incorporates five factors underpinning 17 components extracted using factor analysis. The results revealed that the logistics factor is the most significant factor for evaluating the competitiveness of a regional logistics distribution center. The remaining factors were market, costs, and services environment. Comparing qualitative and quantitative evaluations, results provide useful insights for a regional logistics distribution center development in Northeast Asia. Originality/value - This study revealed differences between qualitative and quantitative evaluations. The finding implies that prior works on evaluation models of competitiveness has not successfully measured the gap between quantitative data and expert’ evaluations. To overcome this limitation, this paper considered both actual data such as actual distance, cost, the number of companies located, and expert opinions.

Hybrid differential artificial bee colony algorithm for multi-item replenishment-distribution problem with stochastic lead-time and demands

In this paper, by assuming a B2C e-business company with several regional distribution centers (DCs), an extension of multi-item joint replenishment-distribution problem (JRD) is raised with stochastic lead-time and demands to investigate their mutual impacts to the JRD system. For the proposed JRD, the objective comprising four types of costs, namely, the ordering cost, the inventory holding cost, the lost sale penalties and the transportation cost is minimized by jointly deciding the basic cycle time, the replenishment frequencies and safety stock factors of all items. A hybrid differential artificial bee colony (DABC) algorithm, which combines the superiorities of the differential evolution (DE) algorithm in global search and the artificial bee colony (ABC) algorithm in fine search, is presented to solve the proposed JRD model. Numerical experiments and parameter sensitivity analyses are conducted. The computational results have testified that DABC is faster than that of DE (16%) and two hybrid ABC-DEs (18% and 9%), more effective than that of genetic algorithm (GA, 0.15%), ABC (0.03%) and ABC-DE1 (0.015%) and robust than that of GA (99%), DE (71%), ABC (0.97%) and two hybrid ABC-DEs (86% and 88%). Most importantly, different uncertainty significance of lead-time and demands to JRD are revealed and analyzed. Furthermore, management insights, such as the magnitudes of the problem-related parameters and the mutual effects of the two stochastic variables to the system cost, are indicated in the replenishment process.

Emergency supply chain scheduling problem with multiple resources in disaster relief operations

In emergency logistics, it is important to allocate available assets to operations effectively due to the resource scarcity. This paper considers a supply chain network which includes local and global suppliers of medical relief items, regional and central distribution centers, and many customer demand points. Either pre-positioned resources at distribution centers or new assembly operations at them can fulfill resources demands. Moreover, a capacitated multi-stage operations scheduling problem is presented, in which renewable (medical teams) as well as non-renewable resources (standard or customized medical kits) are required in an emergency supply chain. In addition, a new mixed-integer programming model is presented and solved for small-sized problems. Further, for solving large-sized problems, a particle swarm optimization algorithm is developed. Finally, the performance of the proposed solution method is evaluated, and some sensitivity analyses are conducted on the more important parameters.

A new framework using biform game for cost optimisation of distribution networks

The present work focuses on the demand decision making problem for regional distribution centres sharing the same product families. Each centre orders quantities to be distributed from production units. Our approach suggests a biform game to maximise the benefits of each centre and minimise the end of cycle market induced supply to demand deviations. We start by an independent demand forecasting under uncertainty. Once the demand is met, the centres enter a collaboration phase where coalitions are created and products are exchanged, in order to achieve the core stability of the actual game. If not met, we try to achieve the same objectives using individual rationality through an adapted approach based on Shapley value analysis for each possible coalition.

Using cluster analysis for location decision problem

Numbers of cattle farms have been increasing throughout the production regions. The aim of this paper is to investigate appropriate locations of regional food distribution centers in Northeast Thailand for distributing feed to cattle farms. A geographic information system (GIS) was used to map spatial data locations from 421 standardized cattle farms in 63 districts from Northeast Thailand. Hierarchical agglomerative clustering was applied as a statistical technique to sort datasets into homogeneous groups and three clusters were identified. The center of gravity (COG) method was then used to find the optimal locations of food distribution centers, with results suggesting Chatturat district, Pa Tio district, and Wang Sam Mo district as most suitable for distributing feed to cattle farms.

Integrated optimization model for distribution network design: a case study of the clothing industry

AbstractDistribution network design affects a firm's operating costs and its customer service level. In this paper, we consider distribution network design for improving the closed‐loop logistics in a clothing company. We formulate the problem as a mixed‐integer nonlinear programming model with an objective of minimizing the annual operating costs. Our model simultaneously determines the optimal number of regional distribution centers (RDCs), identifies location and relative size for each RDC, allocates each city distribution center to a specific RDC, decides on supply ratio for each contracted plant, and specifies the annual operating costs and service level for the best scenario, as well as other scenarios. Test results show that this marketing initiative at the studied company can effectively reduce its annual operating costs. Although this paper is a specific case study, it provides several managerial insights and modeling references for similar facility location and allocation problems.

The use of disaggregated demand information to improve forecasts and stock allocation during sales promotions: a simulation and optimisation study using supermarket loyalty card data

Our work highlights the importance of using disaggregated demand information at store level to improve sales forecasts and stock allocation during sales promotions. Monte Carlo simulation and optimisation modelling were used to estimate short-term promotional impacts. Supermarket loyalty card data was used from a major UK retailer to identify the benefits of using disaggregated demand data for improved forecasting and stock allocation. The results suggest that there is a high degree of heterogeneity in demand at individual store level due to number of factors including the weather, the characteristics of shoppers, the characteristics of products and store format, all of which conspire to generate significant variation in promotional uplifts. The paper is the first to use supermarket loyalty card data to generate store level promotional forecasts and quantify the benefits of disaggregating the allocation of promotional stock to the level of individual stores rather than regional distribution centres.

The use of disaggregated demand information to improve forecasts and stock allocation during sales promotions: a simulation and optimisation study using supermarket loyalty card data

Our work highlights the importance of using disaggregated demand information at store level to improve sales forecasts and stock allocation during sales promotions. Monte Carlo simulation and optimisation modelling were used to estimate short-term promotional impacts. Supermarket loyalty card data was used from a major UK retailer to identify the benefits of using disaggregated demand data for improved forecasting and stock allocation. The results suggest that there is a high degree of heterogeneity in demand at individual store level due to number of factors including the weather, the characteristics of shoppers, the characteristics of products and store format, all of which conspire to generate significant variation in promotional uplifts. The paper is the first to use supermarket loyalty card data to generate store level promotional forecasts and quantify the benefits of disaggregating the allocation of promotional stock to the level of individual stores rather than regional distribution centres.

Logistic tools for optimization of the regional distribution center

The paper proposes the use of the integrated logistic approach, application of the cross-functional logistic coordination and integration in managing processes of the distribution center that promotes both to minimization of expenses and enhancing the effective functioning of the distribution center in the supply chain. The SMED analysis of logistic processes and Value Stream Mapping make it possible to identify inefficient operations and to reduce the duration of a logistics cycle. The researches of processes conducted by the author with the use of the logistic tools allowed revealing the reserves and making recommendations on how to enhance the effectiveness of the regional distribution center.

The influence of additive manufacturing on the configuration of make-to-order spare parts supply chain under heterogeneous demand

Additive manufacturing (AM), alongside technological developments, has been used in the production of spare parts with positive results for spare parts supply chains. In this study, we investigate spare parts supply chains serving heterogeneous demands from multiple service locations under the mode of make-to-order. We aim to compare different configurations (i.e. centralised and distributed) of spare parts supply chains in terms of their performance (e.g. sojourn time and cost) and to further propose suggestions to better configure AM-based spare parts supply chains by effectively allocating AM machines at service locations (SLs) or regional distribution centres (RDCs). In order to realise these research objectives, the simulation approach is used as the main research method. Different from the existing perception, our results illustrate that the distributed deployment of AM machines does not always guarantee a quick response, and that centralised configuration is desirable when the demand rate is relatively high due to the pooling effect. The distributed configuration, however, can still be suitable, considering the development of AM technology. Our results also indicate the possibility of a mixed configuration of AM-based supply chains with the potential for outperforming the purely centralised/distributed configuration. The criteria to design such a mixed configuration are also offered.

Optimization of cold chain logistics distribution network terminal

By studying the development status of cold chain logistics in China, and the current situation in the three specific industries of electronics commerce, supermarkets, and the food and beverage industry, this paper analyzes and concludes that the terminal logistics distribution capacity of the regional distribution centers in Chinese cities is insufficient. In order to solve this problem—based on the idea of joint distribution—the paper makes a specific study of the terminal problem and establishes a joint distribution node. Different distribution schemes are adopted for individual, medium, and large customers, and we find that the semi-trailer is used to carry out the transportation of jammers by using mathematical modeling and time window constraint analysis, which can effectively integrate cold chain logistics resources, save logistics space and human resources, and improve terminal logistics distribution capacity.

Energy use and carbon footprint of the tomato production in heated multi-tunnel greenhouses in Almeria within an exporting agri-food system context

Almeria (Spain) is one of the most important agricultural centers of vegetable cultivation in Europe. The search for technological innovation has led to the introduction of climate control systems in greenhouses in Almeria to improve productivity during the cold season. Up to now, no studies have analyzed the energy behavior of introducing this technology in this specific region. The objective of the present study is therefore to analyze the energy use and carbon footprint (CF) of the tomato production in heated multi-tunnel greenhouses in Almeria from a life cycle perspective (cradle to regional distribution center approach). The results obtained show that the introduction of heating systems in multi-tunnel greenhouses in Almeria allowed for an increase in the annual productivity per hectare and kilogram below the increment in cumulative energy demand (CED). The on-farm CED and CF were estimated at, respectively, 13.4 MJ and 0.92 kg CO2-eq kg−1 of gross production. The impacts were thus 3.3 and 2.75 times higher than those of the unheated crop. The use of energy and infrastructure (86.1%), fertilizers, and infrastructure (66.9%) were the main hotspots of the heated and unheated tomato crops. With regard to the marketed output and the supply chain, the CF and CED of heated tomatoes were 2.07 kg CO2-eq and 29.30 MJ kg−1, with a non-renewable EROI (energy return on investment) (0.030:1) that was 48% lower than the one obtained with unheated tomatoes. On-farm production (64.1%), transport, and packing (65.9%) were, respectively, the main hotspots in the heated and unheated tomato agri-food systems. The production of heated tomatoes in Almeria may continue to be a better energy option than locally producing the crop in heated greenhouses in northern Europe, as long as other options related to the seasonal local production and changing diets are not taken into account.

Evaluación de recursos naturales y culturales para la creación de un corredor turístico en el altiplano de San Luis Potosí, México

The San Luis Potosí plateau is located in the northern portion of the state; it comprises 15 municipalities with a territorial extension of 28122 km 2. This area includes the municipalities of Cedral, Matehuala and Villa de la Paz, which stand out for their economic development throughout history. Such is the case of trade that has made of Matehuala an important regional distribution center, supplemented by agricultural activities as key elements of the economy of the municipality of El Cedral, and mining, which in the colonial collection of some relevance in Villa of Peace, where copper is mined, lead, silver and gold.The incorporation of new territories to tourism, as part of a national policy, has allowed the economic diversification in arid zones of Mexico.These municipalities have natural and cultural resources that are suitable for tourism development, based on their physical-geographical attributes, the cultural heritage from pre-hispanic groups, architecture and gastronomy. The failure to recognize these natural and cultural resources, as well as the little interest in tourism development on the part of local governments and local inhabitants, has restrained the diversification of this activity.Therefore, the objective of this research is to evaluate the tourism resources available in these municipalities based on the multicriteria evaluation methodology. This methodology comprises a set of techniques which allow estimating various alternatives based on various criteria and priorities, and assessing those sites with the greatest tourism development potential, as well as the intrinsic characteristics of the activity, such as accessibility, equipment and infrastructure, for the identification of tourist attractions. Interviews were carried out with the governments of the municipalities involved, the Ministry of Tourism of the State of San Luis Potosi, and with the different social stakeholders of the localities studied.As a result of this methodological process, 10 areas with tourism potential were identified based on the detection of suitable sites, to be included in a tourist corridor that would include the most important attributes of the region, where there is an emerging tourism potential that would boost the local and regional tourist economy.In this sense, it can be stated that tourism will be beneficial for the municipalities to the extent that it meets the needs of tourists, is economically profitable, socially fair for the local community and environmentally friendly. The proposal of the corridor, in the planning stage, incorporates environmental, social and economic aspects and implications that foster the mobilization of goods, services, merchandise and tourists in the area, and promote the political integration and the participation of the stakeholders involved.

СТРАТЕГІЧНЕ УПРАВЛІННЯ ЛОГІСТИЧНОЮ ДІЯЛЬНІСТЮ В ПТАХІВНИЧИХ ПІДПРИЄМСТВАХ

The article considers the strategic guidelines of the logistics activities of poultry enterprises. It is noted that the strategies of minimizing logistics costs and investing in the logistics network, maximizing and improving logistics services, maximizing income and profits, increasing the competitive advantages of the enterprise, logistics outsourcing are the most widely used logistics strategies. It is proved that the purpose of creating a logistics system is to harmonize the interests of producers, suppliers and consumers. It is established that an important factor in improving the strategic activities of the enterprise is the introduction of the principles of distribution logistics. This concept involves the use of a systematic approach and integrated planning, as well as management of the entire flow of feed, materials, breeding and commercial poultry products in various areas from suppliers, through manufacturers of breeding and breeding products, distribution centers, to the final individual and corporate consumers of poultry products. The main stages of the business process of integration of a poultry enterprise in the supply chain are schematically shown. The necessity of introduction of new, more progressive forms of service in the process of goods movement can be achieved. The need to use regional distribution centers of poultry enterprises in the supply chain, which will significantly reduce the cost of delivery of their products through the formation of optimal transport batches of products from different manufacturers, its packaging and labeling.

Network design of a multi-period collaborative distribution system

This research is based on a real case study of horizontal collaboration in France. The project involves several suppliers who form a geographical cluster and wish to pool the delivery of their goods to several thousands of customers spread across the whole country. The main objective is to build pooled load plans that cut distribution costs through volume consolidation. The distribution system includes one consolidation facility in the production area and a set of intermediate facilities called regional distribution centers (RDCs). It combines full truckload (FTL) routes between the production area and the RDCs and less-than-truckload (LTL) shipments from the RDCs to each customer. We propose a Mixed Integer Linear Programming formulation for the optimal location of RDCs. This model integrates the two transportation rate structures and enables direct deliveries from the production area to customers when FTL routes are not profitable. We propose two additional constraints that help decision makers to refine their preferences. We present computational experiments on a case study concerning the distribution of horticultural products in France.

Optimization of a regional distribution center location for parts of end-of-life vehicles

The high transportation cost of the parts of end-of-life vehicles (ELVs) has received a great deal of attention lately, and different approaches for solving the problem have been taken. In this paper, a bi-level programming model is developed to decompose the distribution center location problem for the parts of ELVs in order to obtain a trade-off between the location cost of the distribution center and the transportation cost. The upper level determines the sites of distribution centers and the lower level represents the delivery routes under any location pattern of candidate sites of distribution centers. The proposed model is illustrated by real data and the results demonstrate that it can be an effective method to determinate a distribution center for ELVs.

Supply Chain Network Design Considering RFID Adoption

This paper reports on the integrated supply chain network design with radio-frequency identification (RFID) technology. The proposed model seeks to maximize the total profits of a manufacturer, servicing multiple retailers through regional distribution centers (RDCs) by identifying the optimal area of influence and order quantity for each RDC using a two-phase approximation method. Simulation results indicate that when using RFID, increasing the order quantity leads to a decrease in the area of influence of each RDC. Our findings also show that RFID has a more pronounced influence on supply chains affected by inventory inaccuracy and demand distortion.