Newspaper Distribution Optimization
Where supply chain management and data science meet, interesting questions arise. In our Data2Move Research Stories, you will find out how students have answered these. This time, we delve into the work of Marc Schmitz to learn more about how to optimize the newspaper distribution network at de Persgroep.
Where it Started
“Today’s news is tomorrow’s history.”, Marc quotes, referring to the perishable nature of newspapers. Schmitz was set with the task to optimize the design of the newspaper distribution network of de Persgroep.
Why this task? Improvements in technology have caused many people to read and receive their news via digital channels. However, there is still a substantial amount of people that want printed newspapers delivered to their homes. Additionally, a shift in demand has meant that more printed newspapers are requested on Saturday whilst fewer and fewer newspapers are needed for weekdays. In order to deal with these societal and economic trends, a fresh and deep look in the newspaper distribution network was necessary to cut costs and maintain a high service level.
Schmitz took the problem hands-on: Through supply chain design analysis he determined the optimal locations of depots and vehicle routes. In combining the problem of finding the right locations for facilities and determining optimal vehicle routes, he set himself for a challenging task.
The Importance of Data
To determine a suitable model, Schmitz had access to different types of data. Geographical data were used to determine possible locations for depots and to gather insights on customer locations. Moreover, Schmitz used data on carrier capacity and costs to find the best routes for different locations.
Findings and Advice
Schmitz’s main goal was to simultaneously choose depot locations and sizes. He concluded that a combination of many smaller and a few larger depots was optimal. With this design, most vehicles are fully loaded and carriers receive their newspapers well in advance, such that high service levels are maintained. Finally, he concluded that implementing the redesign could cut total costs by 20 percent!