Improving fleet solution – a case study

Abstract

Transportation management is a logistical activity with a high impact on a company’s ability to compete in the market. Although the focus on cost reduction is the most usual concern with this activity, lead times and the quality of the service provided should also be considered depending on the market to be served. The goal of this research was to compare different fleet alternatives for a specific construction materials company and discuss which scenario is the most suited to fulfil the company’s customer service policy. A case study approach was developed, and four alternative scenarios were considered. These were compared both regarding the costs they involve, which was analysed using a vehicle routing problem heuristic, and the quality of the customer service they allow, which was assessed based on their ability to provide flexibility in the fleet occupancy rate to respond to unexpected orders. Evidence showed that the current fleet solution is not adequate and investment should be made only if the demand level increases, otherwise outsourcing should be considered along with a minimum level of the self-owned fleet.