CASE STUDY: 9

Delivery Van Optimization via Customized Application

Author: Zameer Suleman Memon

Abstract:

This is a study on tobacco companies selling cigarettes to retail shops on spot selling model. Cigarettes bring an expensive commodity as compared to its volume when transported, a single carton on an average cost 150-200 USD having average 185 packs. A normal delivery vehicle (Suzuki Ravi) can load 100 cartons. As per New York Stock Market, tobacco companies after all expenses make a profit margin of 160%. Gross Margin is typically 40%. A sale loss of a single case will cost a company in terms of brand loyalty, customer being lost and loss of 40% gross market. As per the survey, most companies have a beat size of one call per outlet in a week. Any shortage will last for a week’s time on the particular outlet impacting the trade presence for  the company. As per the industry experts, being out of stock in field is the biggest challenge which sales team faces. Shortages are also escalated to the “customer care helplines” via customers and to the top management. Further, field team productivity is entirely dependent on the right amount of stock and mix together. In order to save the sale loss, we have developed a mobile application, which helps to give visibility across channel and overcome all the issues for a typical spot seller leading to a sale loss. Application has the capability of managing the independent variables (inventory level, right mix of SKU’s, location, mobile application capability and supervisory monitoring) in our study which impact the final sales volume/value. Application is compatible with Android devices. Each Delivery man/spot seller will be required to carry an android device along with an active internet connect.