Thursday 27th Oct 2016 - Logistics Manager

Oiling the wheels of industry

Reynolds Logistics is Ireland’s leading liquid distribution company and its biggest distributor of petroleum. Its subsidiary Reynolds Lubricant distribution operates lubricant and chemical contracts. Its core competencies are the contract distribution and storage of bulk, both in tankers and intermediate bulk containers (IBC), and packed lubricants.

A key part of the tender process is modelling the distribution operations for a prospective client, which typically supplies three, six or 12 months of historical order data. Reynolds needed a strategic tool to assist with business development. A detailed search and selection process led the company to the Optrak vehicle routeing system.

General manager Andrew Reynolds says: “We chose Optrak due to its reputation and expertise in the bulk liquids industry and its established oil and petroleum client base. It was also clear that other routeing solutions did not offer the same functionality as Optrak.”

Reynolds creates detailed distribution models within Optrak to determine the cost base for each contract. Various options can be analysed until Reynolds knows what resources would have been required to fulfil the orders efficiently.

Optrak was first used on a modelling project for BP Castrol. Reynolds won this contract, and shortly after, Optrak was used in a successful tender to Shell. It was then that the decision was made to use Optrak for daily scheduling.

Reynolds operates a fleet of multi-compartmented tankers and IBC carrying vehicles from a modern shared user warehouse in Dublin. This is supported by vehicles at out bases in Cork, Belfast and Galway.

Historically, Reynolds used tankers for bulk lubricants and separate vehicles for packed goods such as barrels, cartons and bottles of screen wash. Currently, Reynolds has a patent pending for vehicle design that allows for both bulk and packed goods to be carried on the same vehicle. The bulk lubricants are carried in IBCs and these are loaded on the IBC carrying vehicle which also carries packed goods.

This has several benefits. An order could be made up of several parts such as 1,000 litres of bulk oil, a barrel of gear oil for the workshop and packed goods for the forecourt. This saves the customer time, as it has to deal with a single delivery and Reynolds only has to send a single vehicle out to satisfy orders containing both bulk and packed products.

There are three different types of delivery window and these are crucial to how Reynolds work with customers. The majority are by-date, where Reynolds has flexibility to deliver anytime after the order is placed and within the service level agreement. A commence-date order is where a customer pre-orders products but doesn’t want it before a certain date. An on-date order must be delivered on a specific day.

Reynolds uses Optrak to explore tiered delivery service/cost options with client business managers. Customers are charged according to the delivery SLA. This allows Reynolds to increase revenue streams for priority orders, while sharing any cost benefits with clients who have a longer delivery window.

Castrol BP was the first contract where Optrak was used for live scheduling. However, as Reynolds’ business grew, Shell, Statoil and other chemical contracts were also planned through Optrak. While this originally involved using dedicated vehicles for each customer, Reynolds now consolidates all orders and operates a single shared vehicle fleet. This has boosted utilisation and reduced the time required for planning down to 90 minutes. Reynolds estimates that without Optrak, it would take two planners a full day to do the routeing.

Reynolds has automated elements of the supply chain to replicate electronically all paper-based forms and processes. Lubetrac is an office-based system for managing orders and integrates with Optrak to optimise route planning. Vehicles are fitted out with onboard computers that collect the delivery data and customer signatures for each delivery.

Customers place orders with a Dublin-based call centre. If the order is placed before 12pm, it is assembled in the UK at Ellesmere Port, and transported overnight to Dublin. Order details are transferred from the clients systems by EDI to Lubetrac. In the morning, orders are exported to Optrak. The order set includes on date orders, any unrouted commence and by date orders from the previous day and new orders that have been placed.

Optrak is used to generate an initial set of optimised trips that observe all delivery and time windows. The closer an order gets to the ‘by date’, the more priority it is given. Optrak uses any remaining orders to boost utilisation of vehicles that Reynolds is already committed to sending out.

The scheduler uses his local knowledge to modify trips to improve routes and utilisation rates. Optrak rechecks all constraints whenever a change is made. If an outbase does not have the capacity, the scheduler uses Optrak to allocate a vehicle from Dublin.