ieor-1 - informs Vol. 38, No. 1, JanuaryFebruary 2008, pp....

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Vol. 38, No. 1, January–February 2008, pp. 40–50 issn 0092-2102 ± eissn 1526-551X ± 08 ± 3801 ± 0040 inf orms ® doi 10.1287/inte.1070.0331 © 2008 INFORMS THE FRANZ EDELMAN AWARD Achievement in Operations Research Coca-Cola Enterprises Optimizes Vehicle Routes for Ef±cient Product Delivery Goos Kant ORTEC, 2800 AL Gouda, The Netherlands and Faculty of Economics and Business Administration, Tilburg University, 5000 LE Tilburg, The Netherlands, Michael Jacks Coca-Cola Enterprises Inc., Atlanta, Georgia, Corné Aantjes ORTEC USA, Six Concourse Parkway, Atlanta, Georgia 30328, In 2004 and 2005, Coca-Cola Enterprises (CCE)—the world’s largest bottler and distributor of Coca-Cola prod- ucts—implemented ORTEC’s vehicle-routing software. Today, over 300 CCE dispatchers use this software daily to plan the routes of approximately 10,000 trucks. In addition to handling nonstandard constraints, the imple- mentation is notable for its progressive transition from the prior business practice. CCE has realized an annual cost saving of $45 million and major improvements in customer service. This approach has been so successful that Coca-Cola has extended it beyond CCE to other Coca-Cola bottling companies and beer distributors. Key words : transportation scheduling; vehicle routing; distribution optimization. C oca-Cola Enterprises (CCE) is the world’s largest marketer, producer, and distributor of Coca-Cola Company products. These products extend beyond traditional carbonated soft drinks to beverages, e.g., still and sparkling waters, juices, isotonics, teas, and energy, milk-based, and coffee-based drinks. CCE dis- tributes Coca-Cola brands, e.g., Coke, Dasani, Sprite, Barq’s, Fresca, Hi-C, Nestea, Powerade, and Minute Maid, and also beverage brands of several other com- panies. In 2005, CCE distributed two billion phys- ical cases (containing 42 billion bottles and cans), representing 20 percent of the Coca-Cola Company’s worldwide volume. While CCE is a publicly traded company, the Coca-Cola Company owns 36 percent of its stock. Coca-Cola has outsourced its production and dis- tribution to its bottling and distribution companies, of which CCE is the largest. CCE distributes syrup from the Coca-Cola plants to 64 bottling plants; it distributes bottled and canned beverages from the bottling plants to the distribution centers, and from the distribution centers (depots) to the ±nal retail out- lets (i.e., stores and vending machines) where cus- tomers buy the products. The operations research (OR) application we discuss plans the distribution of products from over 430 distribution centers to 2.4 mil- lion ±nal retail outlets. Figure 1 shows the current CCE territory in North America; it also operates in parts of Europe. CCE franchise territories encompass a population of 400 million people. This represents 80 percent of the population in the United States and Canada and all of the populations of Belgium, continental France, Great Britain, Luxembourg, Monaco, and the Nether- lands. It employs approximately 74,000 people, 54,000 vehicles, and 2.4 million vending machines, beverage
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This note was uploaded on 01/26/2011 for the course E 10 taught by Professor Righter during the Spring '08 term at University of California, Berkeley.

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ieor-1 - informs Vol. 38, No. 1, JanuaryFebruary 2008, pp....

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