-William van Lindonk-

Albert Heijn is the oldest and largest supermarket retailer in the Netherlands. With an assortment of over 30.000 different products per store it offers the highest amount of different products compared with any other supermarket chain in the Netherlands. The distribution of 30.000 different products over the more than 850 different stores with total annual revenues summing up to a total of 34 billion a year can be thought of as quite a logistical challenge. Adding to this challenge Albert Heijn strives to have at least 99% of its assortment in store at any moment and have delivery times for non-available products of maximum 24 hours.

In order to cope with this very large and very diversified demand Albert Heijn has changed its logistical infrastructure, mostly by improving the availability of information between divisions within Albert Heijn and between Albert Heijn, its delivery trucks and its suppliers. Because Albert Heijn has outsourced most of its logistics to other companies, communication between all the logistical components is essential. For the delivery services from distribution center to the individual stores Albert Heijn already relies on 25 localized distributors who pick up the orders from the distribution centers – of which there are 6, spread across the country –  and bring them to stores in different regions.

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Distribution Center of Albert Heijn

In the past these trucks used to be scheduled to deliver to only 1 or 2 stores at the same time with large orders. The consequence of this was that trucks were driving a lot of distance without cargo, thus increasing the cost of supplying the stores. Next to the cost of driving distance without cargo, stores had difficulties planning the arrival of trucks, leading to longer waiting times for trucks at the store because personnel was not ready to unload it or personnel at the store was waiting for the truck because it was expected earlier than it arrived, due to delays.

Since last year Albert Heijn started working together with Simacan, a software developer, to develop and implement a new approach to truck route planning. The approach was to combine the data of all the transport management systems of the different distributors and feed it into one system – the so called Transport Control Tower – From the Transport Control Tower planners can now easily see in realtime which trucks are available so that the average amount of stores a truck can supply on one route increased from 2 to 4. In this way the trucks drive fewer miles per store to deliver the products needed and are able to take in more different regional products from suppliers to the distribution centers on the way back.

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The Information about the arrival times of the trucks is also shared with the stores and updated in realtime with respect to traffic information on the roads and other delays. In this way employees in the store are continuously updated on the times at which they have to be available to unload the truck so they can do other productive activities while the truck is still underway and can be there right in time, in order to make sure that the trucks are unloaded fast and efficiently.

Simacan and Albert Heijn are still looking for ways to further optimize the program such as making the program automatically find trucks that are near each other and directing them to drive together in a Platooning chain – a technique in which the trucks drive behind each other aided by computersoftware in order to minimize air resistance and fuel consumption- so that the logistics will be even more cost-efficient.

Many managers and other personnel within the organization are happy with the new Traffic Control Tower, because it provides them with the information they need to plan the store activities in good order so the 99% criterion of a full store can be maintained in the best possible way. Also the people of the logistics department are content with the improved information flow as they now have more freedom to plan their activities and are able to see what is really going on in the supply chain. This allows them to optimize deliveries to all of the 850 stores throughout the Netherlands, Belgium and Germany.

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