 Routing and scheduling with TruckStops, the specialist application from MapMechanics, has played “a fundamental role” in a major expansion programme undertaken this spring by UniChem, the pharmaceuticals and healthcare distributor and wholesaler in the Alliance Boots group.
In what has become by far its biggest-ever third-party distribution contract, UniChem has become sole agent for distribution of Pfizer products in the UK – a development that has resulted in an increase of nearly two thirds in its delivery van fleet, now standing at 750 vehicles, and a rise from 6,500 to 16,000 in its customer base.
“It has also meant a change in our operational approach,” says head of distribution Chris Brown. “In the past we worked with a traditional model, distributing to all locations from ten large medical warehouses. To take on the Pfizer work, we have set up a new system using sixty additional local hubs around the UK.”
UniChem had already used TruckStops to very good effect in a number of exercises to streamline its existing distribution network. Generally the company had always operated on the basis of fixed delivery routes, and by methodically re-planning all these routes it was able to achieve efficiencies valued at more than £1 million – a saving of over 6 per cent. The last exercise enabled the company to reduce the fleet at the time by 17 vehicles, and to cut travel by around 1.8 million miles a year.
Armed with this experience, UniChem has been able to apply TruckStops to the task of modelling a new network to take on the Pfizer work. TruckStops is often used in this way – to plan distribution networks and set up and revise fixed routes – although many users also take advantage of its ability to do dynamic day-to-day routing and scheduling of vehicles.
Because the Pfizer operation involved so many more delivery outlets than UniChem’s existing work, as well as different delivery frequencies and requirements, it was decided at an early stage that rather than attempt full integration of the new operation with existing activities, it would be essential to create a dedicated process for it, at least initially.
“TruckStops was very helpful in this process,” Chris Brown says. “We looked at existing routes to see which were viable in our terms, and used TruckStops to model where to locate our new hubs, and how many vehicles to allocate to each.”
He adds: “It was quite a task. Rather than rely on information provided to us, we mostly went back to first principles to find out what would work best.” He says the MapMechanics team helped throughout with support and advice about how to get the best from TruckStops.
One advantage enjoyed by UniChem is that as a member of the Alliance Boots group, it has been able to use existing Boots stores to set up many of the distribution hubs. This means that once it had established the optimum network structure, it was able to set up the hub bases extremely quickly. “It’s hard to imagine many other companies in this field with that ability.”
Use of Boots locations introduced significant synergies between the new and existing operations. “We were already delivering to all the Boots outlets every day,” Chris Brown explains, “so we have been able to use the same vehicles to trunk the Pfizer product to the hub locations.” For this part of the operation the company uses Transit-style box vans.
To handle the new delivery work the company has invested in a fleet of 300 Renault Kangoo delivery vans. It has also introduced a range of IT support functions for the new operation, including the use of an electronic proof of delivery system built round Symbol (now Motorola) MC9000 ruggedised handheld computers.
UniChem’s existing operation involved deliveries to locations such as pharmacies, care homes and hospitals. Whilst similar in character, the new operation is much more granular, including deliveries to locations such as patients’ homes and doctors’ surgeries.
“In aggregate, our operations now enable us to offer a better service to external clients,” Chris Brown says. He explains that the company had already started taking on work for clients such as National Health trusts, “and we see opportunities with our extended network to take on much more of this type of work.”
Meanwhile, UniChem is already investigating a major advance in the way it plans its deliveries – again focusing on TruckStops. “We’re looking at doing dynamic daily scheduling of loads,” Chris Brown explains. “We see this as taking the operation to the next level.”
The company is now setting up what it terms a Dynamic Route Planning Centre, which would be responsible for deliveries throughout the local network. TruckStops would sit at the heart of this operation, receiving delivery information on a daily basis from existing order processing systems, and allocating loads to vehicles automatically in the optimal way. “We’re only at the review stage of this process at the moment,” Chris Brown says, “but it opens up exciting new possibilities.”
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