Vol. 38, No. 1, January–February 2008, pp. 40–50 issn 0092-2102 eissn 1526-551X 08 3801 0040
doi 10.1287/inte.1070.0331 © 2008 INFORMS
THE FRANZ EDELMAN AWARD
Achievement in Operations Research
Coca-Cola Enterprises Optimizes Vehicle Routes for Efﬁcient Product Delivery ORTEC, 2800 AL Gouda, The Netherlands and Faculty of Economics and Business Administration, Tilburg University, 5000 LE Tilburg, The Netherlands, email@example.com Coca-Cola Enterprises Inc., Atlanta, Georgia, firstname.lastname@example.org ORTEC USA, Six Concourse Parkway, Atlanta, Georgia 30328, email@example.com
In 2004 and 2005, Coca-Cola Enterprises (CCE)—the world’s largest bottler and distributor of Coca-Cola products—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 implementation 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.
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 distributes 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 companies. In 2005, CCE distributed two billion physical 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 distribution 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 40
bottling plants to the distribution centers, and from the distribution centers (depots) to the ﬁnal retail outlets (i.e., stores and vending machines) where customers buy the products. The operations research (OR) application we discuss plans the distribution of products from over 430 distribution centers to 2.4 million ﬁnal 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 Netherlands. It employs approximately 74,000 people, 54,000 vehicles, and 2.4 million vending machines, beverage dispensers, and coolers. The CCE ﬂeet is the second largest in the United States after that of the US Postal Service. It has grown from 13,000 vehicles in 1986 to 54,000 today. Because
Kant, Jacks, and Aantjes: Coca-Cola Enterprises Optimizes Vehicle Routes for Efﬁcient Product Delivery Interfaces 38(1), pp. 40–50, © 2008 INFORMS
Figure 1: CCE operates in 46 states in the United States and all 10 provinces in Canada.
of this enormous growth and the competitive nature of the beverage industry, the need to optimize product delivery became apparent. Therefore, CCE’s objectives were to: • Provide world-class customer service; • Optimize its labor and assets; • Reduce natural resource consumption; and • Provide its employees with a productive but realistic working day. It has achieved these...