As part of a recent initiative to improve its payment structure for carriers, international livestock feed producers Agrifirm decided to implement Ortec’s optimisation software for Vehicle Routing and Dispatch. The changes in the payment structure had brought about a need for automated planning, and the company has been working closely with Ortec over recent months to achieve this. In a period of six months, Agrifirm has successfully implemented efficient route planning, developed a clearer overview of its cost structure and brought about a range of savings and improvements.
Agrifirm’s regional operation in the Netherlands already had many years experience of working with Ortec, and so the Belgian branch was keen to get Ortec on board. Glenn Donckers, planner with responsibility for Agrifirm’s operations, explains: “The main challenge was to keep miles driven as low as possible and to obtain clear information on costs per customer, trip and carrier. We needed a system that could fulfil both these objectives.”
Agrifirm recently went live with Ortec Transport & Distribution (Ortec TD). Within a very short period of time, the company was successfully carrying out its complex logistics processes using Ortec’s solution and quickly started to see cost savings through efficient trip and route planning.
Donckers: “By using the Ortec’s optimisation solution, the average underutilisation of our fleet dropped to 17% in 2012. The load utilization level rose from 26.7 to 27.0 tonnes and the loading and unloading times are now set at a standard tariff. The improved load utilisation of our fleet has already delivered concrete savings of around 20K within a short period, and through optimised loading and unloading times we have already achieved 100% cost savings of 8K and 30K respectively.”
Further savings have been made in administration and person hour costs. Until the introduction of the new system, Agrifirm had a single FTE who worked full time on planning throughout the year. But now, only two days a month are needed on average for planning, equivalent to a concrete saving of 35K.
Better employee relations
The optimisation solution also means that journey times are automatically calculated and drivers’ payments are made accordingly. “No exceptions are made for congestion or bad weather, for example,” explains Glenn Donckers. “The fact that drivers know they will all be treated equally has had clear benefits for employee relations, since any potential grounds for discord between drivers are avoided. Haulage companies are also experiencing the benefits of automated planning since it eliminates the problem of large differences between journeys made by different carriers.”
The system allows for a rapid response to situations such as driver illness, traffic jams, breakdowns or changes to customer requirements.
All of these improvements mean Agrifirm now has clearer information available on its logistics processes, which they can also use as a stimulus to encourage carriers to optimize their own operations. The cattle feed company has also implemented a smarter approach to its operations, producing further cost savings. Diesel consumption is down as drivers are avoiding lines, carriers can earn bonuses by increasing the load utilization level, and effective maintenance and prompt replacement mean significant savings in terms of time and money.