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Moving Urban Goods: It's All about Supply Chains 17
comparative discussion that begins with a table of comparisons for all 12 chains in terms of their
major elements. The table identifies
· The supply chain, its channel, and types of goods;
· Geographic features, main types of facilities, and modes of transportation;
· Patterns in the staging of goods and urban delivery; and
· Performance features, including expectations, common risks, and enhancement strategies.
After the table, short discussions of each of these elements, their differences and shared traits,
and significant factors for planning are presented.
Case Illustration 1: Soft Drink Beverages
Overview
Consumer soft drink beverages are produced in two steps. First is the manufacture of concen-
trate by a parent company, which is also responsible for branding and marketing. Second is the
manufacture and packaging of the finished product by a bottling subsidiary or company, which
is also responsible for distribution. The major concern for urban goods movement is the second
step, which is the focus of the supply chain illustrated here.
Each geographic region has a collection of company production and distribution facilities
working together to provide a broad range of beverage products to various customers, including
stores, restaurants, and vending facilities. Production facilities receive raw materials for beverages
and packaging entirely from domestic sources, including concentrate, sweetener, water and gasses,
and empty bottles and cans. Water is city water piped in locally; some chemicals and liquid sweet-
ener may arrive by rail; everything else arrives by truck, mostly in full loads. There are full distri-
bution functions at all production facilities, and there is an additional set of dedicated distribu-
tion centers (DCs) that exclusively perform warehousing and delivery. The two facility types work
together, and production plants are coordinated as to beverage and packaging types, resulting in
a significant amount of cross-shipping of product between locations. Thus, a distribution point--
whether located in a dedicated facility or a bottling plant--will receive finished product in the
form of various beverages packaged in glass, plastic bottles, and cans, from multiple plants as well
as from producers of specialty beverages the parent company controls. Customer deliveries then
originate either from a production facility or a dedicated DC, are handled entirely by the com-
pany truck fleet, and are organized and programmed for optimal fleet use within customer ser-
vice requirements. Different truck vehicle types are employed for different delivery sizes and
functions, broken broadly into bulk (high-volume stores), side loader (convenience store and
restaurant), and fill service (vending machine) retail channels. Each truck runs a stem route, typ-
ically with multiple stops over the course of a trip, optimized around the customer delivery sched-
uling needs. The stem runs to the far end of the route, and then works its way back to the plants
or DC with deliveries along the way, and the truck finishes empty. See Exhibit 3-1.
Performance
Time schedules are set by routing software that optimizes the delivery sequence within cus-
tomer time windows, in order to minimize delivery costs. Most customers prefer day deliveries,
but windows can be flexible as long as delivery occurs by close of business. Nevertheless, some
customers specify early morning delivery, bars and restaurants may prefer afternoon, and ware-
house stores demand specific delivery appointments. Schedules are sensitive because delivery
windows have specific lengths and deliveries are set in sequence, which can cause delays to cas-
cade from one stop to the next. The goal of the route design is to achieve full use of each vehicle
