The design of distribution networks in large, highly congested urban areas has to balance business and environmental factors to be truly successful. We would be hard-pressed to find a better example than Bogotá, the capital of Colombia. In its 2019 annual rankings of the most congested cities in the world, the transportation data firm INRIX Research ranks Bogotá as the third most congested city in the world, and the worst in terms of total hours per year lost in congestion. “Global Traffic Scorecard”, (INRIX, 2019).
Against this backdrop, the combined Technologix Decision Sciences - SDI Systems LATAM consulting team undertook the challenging task of redesigning Alquería’s Bogotá area distribution network. Alquería (Productos Naturales de la Sabana S.A.S.) is the third-largest producer and marketer of dairy products in Colombia. Founded in 1959, it manufactures and distributes dairy products and beverages through a supply chain network composed of 6 processing plants and 15 distribution centers. Bogotá and its surrounding areas represent 40% of total national demand. On average, 12 million liters of dairy products are consumed monthly, supplied by roughly 145 fixed routes servicing 45,000 customer destinations daily.
Alquerías’s strong corporate commitment to sustainability enabled us to face the challenge of configuring an efficient food distribution system in such a highly congested urban area. We decided to use the minimization of total system CO2 emissions as the metric to evaluate and compare different configuration options.
We modelled Alquería’s Bogota network in our Opti-Net™ supply chain modelling platform and added the logic required to derive emission estimates for all feasible combinations of routes and sources. We evaluated a large number of scenarios and the results were very rewarding. The selected configuration, composed of a new distribution center and a pair of new cross-dock locations, is estimated to reduce total CO2 emissions by over 30% while at the same time reducing total network costs.
A short paper summarizing the modelling and results was accepted for presentation in the 2020 MIT SCALE Latin America Conference.