Browsing by Author "Weerakkody, H.D.W."

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Cost minimization model through consolidation: application to a third party logistics distribution center
(Faculty of Science, University of Kelaniya, Sri Lanka, 2020) Weerakkody, H.D.W.; Niwunhella, D.H.H.; Wijayanayake, A.
Third Party Logistics (3PL) providing industry has become an essential service for the manufacturers due to the numerous benefits they could obtain by outsourcing their logistics activities to a 3PL provider. When considering the 3PL industry in Sri Lanka, growth can be seen in the past few decades. Since the distribution of goods of multiple clients in a 3PL Distribution Center (DC), is handled by the 3PL providers, they are much interested in minimizing the distribution cost which will not only ultimately benefit to the 3PL provider but also the client as well. However, managing the distribution of multiple clients at the same time with an optimized cost is challenging for 3PL service providers. The consolidation of goods of multiple clients in the distribution process is one of the main cost-effective strategies that the 3PLs could use. But due to several reasons such as compatibility constraint of goods transported, client concerns, complicated scheduling, consolidation is not practiced by many of the 3PLs in Sri Lanka. Therefore, this study was conducted on identifying the main factors to be considered when consolidating goods of multiple clients, and to develop a mathematical model to minimize the distribution cost in a 3PL DC by shipment consolidation. This paper proposes a mathematical model considering the Vehicle Routing Problem (VRP) as an extension found in the literature, where the compatibility of the products distributed has been added as a new constraint. The mathematical model has been tested and validated using the actual data obtained from few of the 3PL firms in Sri Lanka and has been simulated using the Supply Chain Guru Software. Different scenarios are created in the software to check the feasibility and accuracy of the model. The results obtained showcase an average cost reduction of nearly 25% when consolidating shipments of multiple clients in a 3PL DC. Therefore, it is evident from the study that, the 3PL firms could obtain a significant cost reduction by consolidating shipments of multiple clients. It was also identified that factors like compatibility of the distributed goods, cargo tonnage, clients’ privacy concerns and scheduling of shipments should be considered when consolidating goods of multiple clients to distribute in a 3PL DC. The findings of this research will help the 3PL providers to consider consolidating shipments of several clients and the mathematical model proposed in the research will help them to minimize the distribution cost. Furthermore, the trucks can be properly utilized, the number of trucks and fuel wastage can be reduced and the impact on the environment will be lesser. Future researches could be done on adding more complexity to the model by considering different constraints such as time windows for the orders.
Vehicle Routing and Shipment Consolidation in a 3PL DC: A Systematic Literature Review of the Solution Approaches
(IEOM Society International, 2021) Weerakkody, H.D.W.; Wijayanayake, A.; Niwunhella, D.H.H.
Many of the manufacturing companies tend to outsource their logistic activities to third party logistics (3PL) providers due to numerous benefits they could obtain. Since 3PL providers provide their distribution services for multiple clients at the same time, managing these activities properly with an optimized cost is challenging for them, So, they are much interested in minimizing the distribution cost which will ultimately benefit the 3PL provider, and thereby the client as well. Shipment consolidation is one of the best and effective cost reduction strategies which could be followed by the 3PL firms, when distributing goods of multiple clients. Vehicle Routing Problem (VRP) which is a well-discussed problem in the literature can be applied here since it is beneficial for the 3PL providers to find the optimal routes to distribute the goods from the central 3PL Distribution Center (DC), while consolidating shipments of multiple clients. Therefore, this literature survey has been carried out to analyze the solution approaches, used in the literature related to VRP and shipment consolidation such that it would help in future research in developing a model to optimize the distribution in a 3PL DC by consolidating shipments of multiple clients. The results of the study have shown that most of the referred papers have used metaheuristic algorithms in solving their models and when the number of nodes are larger, it is suitable to use metaheuristic algorithms. Therefore, it can be concluded that a metaheuristic algorithm would be appropriate when developing a model to optimize the distribution in a 3PL DC by consolidating shipments of multiple clients.