TRANSPORT CAPACITY UTILISATION IMPROVEMENT FOR CONSUMER PRODUCT DISTRIBUTION

Abstract

Currently, Thailand’s economic is growing. Several companies study strategies that advice the firms to gain competitive advantages. One of widely used strategies, that aids the firms to reduce cost and utilises their resources to focus on the firms’ core competencies, is outsourcing non-core activities (e.g. a transportation process). A transportation process is one of the non-core activities that requires to be managed appropriately. Therefore, a third-party logistics (3PL) provider that has expertise in the logistics process has been established, and provides service in the logistics management. In this research, a 3PL company is considered as a case study company. A current issue is a capacity utilisation problem due to the improper collaboration of route planning system between the 3PL company and a client (i.e., a retail business). Therefore, this research is operated to improve the capacity utilisation by developing a heuristic algorithm. The proposed algorithm is based on the simulated annealing metaheuristic (SA) for vehicle routing problem (VRP). The experiments evaluate the transportation plans in three main perspectives that are the capacity utilisation, the total travelled distance, and the total transportation cost. The results show that the proposed algorithm provides superior performances than the company’s transportation plan while the constraints of the company are satisfied.