Designing internal supply routes: A case study in the automotive industry

In today's competitive market environment, logistics has a substantial impact on companies' performance. Improving the logistics efficiency is a main goal for many industries, especially, for those involved in car manufacturing. This work considers a real logistics problem in a car-assembly factory. The problem consists in optimizing the supply of components from the internal warehouse to the production lines, determining the best delivering routes. We describe the problem in detail, propose a mathematical programming model, and solve it with CPLEX. Afterward, to evaluate the impact of implementing the optimal routes in realistic scenarios, we apply Monte Carlo simulation and present a comparison between both solutions. The manufacturer's Key Performance Indicators are considered for evaluating the obtained results. The study showed that the proposed solution outperformed the current one, pointing out that the optimized routes could deal with different levels of production in a more efficient and cost reductive manner.