Overview
Lojas Renner S.A. operates all over Brazil, as well as Argentina and Uruguay, in the segments of fashion and home decoration. Its fashion and lifestyle ecosystem is formed by the brands Renner, Camicado, Youcom, and ASHUA. Combined, there are more than 600 stores in operation. Renner is the largest fashion retailer in Brazil in sales.
They deliver a high-quality experience and implement a standard of excellence in fashion and lifestyle to the medium and high segments with an innovative and sustainable ecosystem. Lojas Renner S.A. includes a financing institution, Realize CFI, which supports the retail by offering and managing financial products.
The objectives regarding omnichannel operations were to improve inventory accuracy and assortment availability, to make faster and cheaper deliveries, etc.
Problem
The delivery operations included the management of a few large distribution centers, as well as retail stores. They dispatched packages from distribution centers and retail stores via third-party couriers. Therefore, the company had high costs and a long lead time. Another issue was that e-commerce order tracking depended on the couriers.
Lojas Renner S.A. planned to change the delivery operations by managing dedicated last-mile couriers, using retail stores as transit points for last-mile delivery, and standardizing e-commerce order tracking.
While designing the last mile operations, the company needed to answer the following questions:
- How to use retail stores as transit points?
- How many couriers should be used per transit point?
- What is the cost of these operations?
- How long will the couriers work?
- How to account for failed deliveries?
- How to handle special sized deliveries?
- How to simulate the operations considering actual delivery routes?
Lojas Renner S.A. was not able to find the answers without proper logistics software. Deploying such software would give them an advantage in the market. The company assumed a fixed set of stores as transit points, a fixed coverage for transit points, and regular transfers of packages from the hub to transit points.
They aimed to simulate random delivery locations, time periods, and failures. Each transit point had fixed couriers.
The challenge was to simulate the delivery routes to random package destinations. At the end, they needed to solve vehicle routing problems (VRP) for each depot.
Solution
Lojas Renner S.A. designed a general courier workflow that they used in simulation.
- After loading packages, a new route must be defined for each courier.
- There was a probability of failure for each delivery. Also, the time to deliver followed any chosen probability distribution.
- When the route was finished, the courier had to return to its depot only if there were still available packages to be delivered, or if there was any failed delivery.
AnyLogic could easily simulate the last mile operations for given routes. For these needs, the retail company used agent-based simulation modeling and the Process Modeling Library. The model developers used histograms for visualizing statistics. GIS features were very intuitive and easy to set up by engineers. Moreover, AnyLogic could be easily expanded with Java that allowed Lojas Renner S.A. to use Java based, open-source toolkit jsprit for resolving vehicle routing problems.
Results
One of the modeling outputs showed a lack of couriers at a depot, explaining why some deliveries were not completed. Hence, Lojas Renner S.A. needed to increase the number of couriers there.
AnyLogic provided various modeling alternatives for the same problem, so the engineers just needed to focus on the company’s final goal to find the best solution.
Watch the video about the case study presented by Lojas Renner S.A. at the AnyLogic Conference 2021:
