Optimization of Logistics and Distribution Structure

Supply Chain

Optimization of Logistics and Distribution Structure

Our client, a leading company in the gaming machine industry, designs, manufactures, and distributes gaming devices while operating a wide network of gaming arcades in Germany. Faced with increasing logistical demands and growing complexity in supply chains, a comprehensive optimization of the distribution structure in Germany became essential to ensure the smooth execution of deliveries, returns, and refurbishments of devices.

The optimization focused on multiple areas: first, the delivery of new devices, requiring effective logistics planning to ensure timely and cost-efficient delivery to locations. Second, improving the return and refurbishment process for used devices, allowing them to be reintegrated into the distribution network or relocated to other sites.

As part of the project, we conducted a detailed analysis of weaknesses in the existing distribution structure. By leveraging a digital twin of the logistics processes, we modeled the entire supply chain to identify potential bottlenecks and inefficiencies. This digital representation of reality enabled us to simulate alternative scenarios and analyze their impacts on costs, time, and resources.

A central element of the project was route optimization. By analyzing current delivery routes and assigning relevant postal code areas, we identified significant savings potential. This resulted in better utilization of transport vehicles and reduced delivery times, enhancing efficiency and lowering the cost per transported device.

A particular challenge was the two-tier distribution structure, which required fine-tuned distribution of devices from central warehouses to local sites. This structure necessitated the incorporation of specific cost functions in the digital twin to ensure that last-mile distribution was both efficient and cost-effective.

Following the implementation of the new processes, measurable cost reductions—quantified in €/kg—were achieved. These optimizations led to a significant improvement in logistics efficiency, enabling the company to extend its logistics services to external partners. This opened new business opportunities and enhanced the company’s competitiveness in the market.

Overall, our client successfully streamlined operations, reduced logistics costs, and improved service quality through the optimization of its distribution structure, leading to higher satisfaction among business partners.