Thirsty for Growth? How Molson Coors Got Route & Load Optimization Right

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It’s been said that nothing in life is constant but change. Food and beverage companies understand this as well as anyone. Keeping up with the latest trends, tastes, and preferences is a hallmark of the industry. Companies succeed by introducing new products, updating packaging, and launching new brands to meet the ever-evolving needs of their target consumers. Responding to change is standard operating procedure.

Today, however, food and beverage companies must contend with change on an unprecedented scale. Social, cultural, and economic trends are reshaping the industry. Increased competition and globalization have introduced new risks and added complexity to the business, while technology has transformed the way we work and live. In the face of these disruptions, many organizations are being pushed beyond their ability to adapt. While the focus is on sales, even established brands are struggling to remain relevant. Though some are daunted by these challenges, others see them as opportunities. Forward-thinking companies are forging stronger relationships with retailers and finding new ways to engage consumers.

Logistics is the driving force behind many of these innovations, as the logistics function is increasingly viewed as strategic, approaching the level of marketing and product development. Going forward, this influence will become even stronger, with logistics processes playing a critical role in determining future winners and losers.

Molson Coors Spirit of Innovation

One company, who has gotten it right, is Molson Coors. Founded in Montreal in 1876 by English immigrant John Molson, the company greatly expanded its market over the years. To keep pace with its ongoing business transformation, Molson Coors Canada needed to address a delivery planning system that was decades old, and unable to effectively meet the company’s current and future requirements. With a history of product in-novation, they developed the first recyclable aluminum beer can in 1959, Molson was determined to innovate their supply chain logistics as part of a corporate mandate to innovate everywhere.

Operating six brewery facilities and employing more than 3,000 workers, Molson Coors Canada produces popular brands including Coors Light, Canada’s leading light beer, and Molson Canadian the number one lager. The company has to meet demand on a large, growing, and geographically dispersed scale. Part of the challenge Molson Coors Canada faces is managing logistics in a market that has grown in both complexity and size.

“We’ve always been innovating, and really differentiating ourselves from other brewers as being a brewer that really knows how to innovate.”

Greg Wade, Molson Coors Global Chief Supply Chain Officer

Heady Business Goals

The company had been using delivery planning tools for years but needed to transition to an enhanced solution, without upsetting any of their stake-holders. From a business perspective, the three principal goals Molson wanted to accomplish with the technology upgrade include: building routes, building pallets, and loading trucks, more efficiently. Additionally, they wanted to give the dispatcher more time to analyze and optimize results, instead of simply making manual adjustments.

Taking an Integrated Approach to Route & Load Optimization

Not only does the new system handle routing, it also optimizes trucks and pallets, including how pallets are built and loaded on trucks. Because Molson’s fleet consists of more than 200 truck types, the solution has to accommodate different equipment, available footprint, and order sizes…every element that goes into load optimization. The biggest improvement is that route planning and load building happen simultaneously.

This innovative approach of simultaneous route planning and load building, developed by ORTEC, is a huge leap forward. Route planning and load building have historically been two distinct, siloed steps, resulting in the need for dispatchers to intervene with intensive manual adjustment. Integrating the functions not only reduces this need, but also frees dispatchers to pursue other opportunities.

Optimization Can Help You Do More With Less

Molson Coors’ decision to integrate route planning, pallet building, and truck loading exemplifies a larger trend in the logistics sector to “do more with less” through dynamic freight handling strategies. Shippers face significant challenges in today’s commercial environment:

  • Demand variation is high and often volatile.
  • Markets —and the supply networks serving them— are increasingly nuanced and complex.
  • Multi-channel capabilities are proliferating, increasing pressures on supply networks and underscoring the importance of demand-driven logistics.
  • The need for speed is greater than ever—and increasing.

What is sometimes lost in handling these challenges is the power of executing the basics. Molson Coors Canada leveraged new logistics technology solutions to combine the basic functions of routing, pallet building, and truck loading, and gain significant and sustainable results.

This article was previously posted on Logistics Viewpoints and slightly edited.

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http://www.ortec.com

Goos Kant
Bio: Goos Kant (1967) is a full-time professor of Logistic Optimization at Tilburg University. He is involved in the master program of Business Analytics and Operations Research, as well as in the master program Data Science & Entrepreneurship. He is the project leader of a large R&D project on horizontal collaboration in logistics. Goos is also a managing partner at ORTEC, with global responsibility for all solutions in the logistics industry. His primary area of interest lies in the 3PL-industry in optimizing their planning processes in the end-to-end supply chain. Goos is involved in courses from MBA-schools TIAS and Nyenrode, and member of ORTEC’s supervisory board. He holds both an MSc and a PhD in Computer Science.

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