Project Background

Sara Lee’s Coffee and Tea division had acquired several different companies and wanted to integrate them into their current business. Sara Lee was shipping most customers’ products by either route deliveries or by direct (LTL) shipments. They wanted to analyze and optimize their manufacturing and distribution network giving consideration to manufacturing locations and costs, supply and production capacities, customer demand patterns, and distribution capabilities and costs.

Project Objectives

• Analyze the current branch warehouses to design an appropriate route delivery infrastructure
• Develop optimization model that considers manufacturing, transportation, inventory, and DC operating costs and achieves minimum cost required to service customer demand
• Determine the optimal number and location of manufacturing plants and DC’s
• Identify product groups to be manufactured at each plant and calculate required production quantities
• Provide a detailed plan for efficient distribution of products

Solutions Benefits

• The total costs of the distribution network could be reduced approximately 10% through more efficient use of existing facilities.
• Distribution savings could be achieved without investing in new facilities; No plant or DC closures were recommended due to capacity restrictions.
• No significant capital investment was required since all production volumes were within existing capacity levels.