DEVELOPMENT OF LPP MODEL TOWARDS OUTBOUND FREIGHT OPTIMIZATION FOR TRADED PARTS AMONG CENTRALIZED WAREHOUSE OPERATIONS

In logistics, outbound logistics including the last mile delivery plays an important in achieving company's business results. This study was conducted at Automotive Connection Systems Ltd., in Kerala, India. The key objectives of this study are to analyse the outbound logistical operations and optimum utilization of truck space and loading carrying capacity by consolidation and collaboration. Primary data was collected by pooling the data from company's ERP-SAP system. The study was conducted for movement of traded parts from their centralized warehouse (Origin) to customers across India (Destinations). This warehouse handles 720 traded parts out of which 96% comes from intercompany basis and the remaining 4 % of items comes from their local suppliers located in India. It was found that the company moves 98% of traded parts by road / surface transportation mode and the remaining only by air cargo mode. The company was facing lot issues to deal with Less Truck Load (LTL) and Full Truck Load (FTL) scenarios. Though the company has achieved some level in consignment consolidation, but not fully. Moreover, the benefit of collaboration is yet to be leveraged. In this study, Linear Programming (LPP) model was developed to achieve optimum utilization of truck space and load carrying capacity. The author suggested that the company should develop third party logistics (3PL) service providers by entering into long term business agreements for their outbound logistical operations.