OPTIMIZATION OF A DISTRIBUTION NETWORK OFA BEVERAGE INDUSTRY IN PAKISTAN

Abstract

The project is about the franchise of Pepsi Co. Northern Bottling limited, located in Hayatabad Industrial area, KPK. The core aim of almost every organization is to reduce cost and bring efficiency in their supply chain. Northern Bottling Company wants the same. Northern Bottling Limited perform procurement, manufacturing and distribution of products. They have local and international suppliers, state of the art production plant and a fleet of 250 vehicles to cater the demand of their customers. The customers in this case are distributors since they only deliver products to their distributors and distributors then further deliver them retailers, hotels and restaurants. After carefully analyzing the data collected and reviewing all the interviews conducted, we identified some problems in the processes. By solving these problems cost can be reduced and company can operate in a productive way. The major problem is in the logistic department. The distribution network is spread all across KPK province. It needs optimization along with proper utilization of vehicle capacity and appropriate number of vehicles for the products distribution. Plant is located in Hayatabad along with one warehouse located near it and other is located in Kahuta Islamabad. The products are moved in pallets from plant to warehouse and from warehouse to distributors. NBL has divided their KPK region in 4 sections: South, Central, Base and North. Each section has different number of distributors and hence generate different sales values. As demand is different every month so we have kept the monthly data in account and applied the multi period linear programming method by keeping time period of 12 months. The data collected and researched on is of the year 2019. The results clearly shows that the company is using more vehicles then required and they have to change some practices to make their logistics department more efficient and deliver in timely manner. The finding along with recommendation are mentioned in the project for further analysis and for the use by similar industries to solve their logistics problems, lower costs, and gain completive advantage.