An Increase of Efficiency of Logistics Process of AnIndustrial Gas Business: A Case Study of AnIndustrial Gas Company

Abstract

The main objective of this research is to study an enhance of the efficiency of transportation using theories related to the Capacitated Vehicle Routing Problem (CVRP) by conducting experiments that involve changing the truck types and adjusting the delivery time window. The Clarke & Wright's Savings Algorithm was employed to find the most suitable and efficient routes, and the results of the experiments were analyzed and compared with the current operational processes.

The research findings indicate that increasing the sizes of the trucks, which lead to reduced transportation costs per delivered quantity over shorter distances can result in cost savings of up to 20%. This is achieved under the condition that all customers permit the use of larger trucks for safe delivery.

Furthermore, expanding the delivery time window is a factor that contributes to increased transportation efficiency. By extending the delivery time to 3, 5, and 7 days, it is possible to achieve overall cost savings of up to 30%, 41%, and 46% respectively. These savings are achieved under the condition that the product level on the delivery date must not fall below the level that can be maintained in the gas supply system at the customers’ location.

The main practice of this research is to maintain the product level on the day of refueling at a minimum of 30% of the maximum tank capacity. This is achieved by adjusting the delivery time to achieve greater long-term cost savings and improve transportation efficiency in the short term. Therefore, this research enhances the management of vehicle routing and delivery planning, allowing for potential improvements to the current operational processes.