Logistic cost optimization for domestic market operations in a snacks and candy company

In recent years, the logistics component in supply chain management had become an important link with significant optimization potential in transportation, storage and the inventory management systems, all of them affecting the on time delivery indicator and also the total product cost. The present study was developed in a snacks and candy multinational company specifically on the domestic market finish product supply, analyzing the current network and shipping method in order to provide an optimal truck capacity to reduce the shipping cost and the frequency definition of shipments for the different distribution centers and direct deliveries to specific customers through the logistic network. The methodology applied was supported by Hall's Systems Analysis, and the software GAMS CPLEX for the mathematical modeling. A significant logistics cost reduction was accomplished reducing some of the transportation wastes and increasing the use of the transportation assets without affecting the current service level and on time deliveries.