Sip-Well: 'ROI of 7 months. Who would ever believe that?'

When Sip-Well, the Belgian water coolers provider, started its logistics master plan with Ortec, the company never dreamed the results would be visible so soon. "It only took us seven months to achieve our Return-on-Investment," said Jorgen De Pelsmaeker, Director Fleet & Logistics at Sip-Well. "Who would ever believe that?"

During the past few years, Sip-Well experienced strong growth in the Business-to-Consumer segment. Each month, some 300 new customers are added. Also, the water cooler sector has faced large seasonal variations in sales volumes. To provide better service to customers at the desired intervals, a thorough optimization of both the logistical organisation and the distribution network was required.

Situation and objectives

Sip-Well first entered the Belgian market as a supplier of water coolers to businesses. Now that it is also serving consumers, its customer portfolio has expanded considerably. Jorgen De Pelsmaeker: "Considering our growth, tracking our logistics planning manually would be impossible – there would be a huge risk of inefficiency. As a result, we determined we could not always deliver on time and sometimes customers 'experienced a drought'. That's the worst thing that could happen. No water means no sales, and we would miss out on revenues."

The objectives of the project were therefore clear from the outset. First, we focus on the customer, with Sip-Well looking to provide better service by visiting its customers at a convenient time. Jorgen De Pelsmaeker: "The complexity of the customer portfolio needed to be taken into account, with some customers requiring weekly visits and others just once every two months. Also, visits were not suitable just on any day or at any time. Fortunately, Ortec's software was able to take all these aspects into account."

Besides optimisation of the network, the distribution of the workload also needed to be improved between employees as well as across the various days of the week. Furthermore, Sip-Well's objective was to increase work efficiency. Fixed routes were therefore optimally assigned in order to better cope with Sip-Well's growth. Finally, Sip-Well also wanted to create a better overview of and insight into its logistics organisation, including feedback to other colleagues within the company. "For example, by creating insight into the network and the volume distribution, we wanted to inform our sales people about opportunities for further growth."

Structure of the logistics master plan

"With the logistics master plan, we started at the base," said Jorgen De Pelsmaeker. "Before we started the redesign of our logistics master plan, we completely revised our customer database, during which we found many details to be incorrect. This revision had to be sorted out first."

"After we made all data transparent, we started to cluster the 20.000+ customers into 37 regions. Utilising Ortec's software to cluster customers enabled us to reduce distances between customer locations, allowing us to serve more customers in a day. In addition, the Ortec software also facilitates the assignment of new customers to the correct employees and the creation of an instant schedule of the optimal visiting day, taking into account the visiting frequency and customer requirements. Looking at the results, we must conclude that the key objectives were easily met and that the investment in the project was already earned back within seven months."

De Pelsmaeker continued: "The collaboration with Ortec is successful because this company is just as innovative as Sip-Well. For example, Sip-Well is the only company that offers its customers a beautiful design, just as Ortec was the only company that could offer us what we were looking for. No other party could handle the volumes we deal with."

In addition to thoroughly restructuring the logistics master plan on a tactical level, using fixed routes, Sip-Well has also chosen to implement Ortec's vehicle routing software for its daily planning. This also allowed Sip-Well to optimize the operational scheduling and routing. Jorgen De Pelsmaeker commented: "When the time came to implement a solution for the operational planning as well, we did not even consider other parties. Based on the successful collaboration, we only want to work with Ortec's solution(s) in every day practice."