Description
Red Bull is produced and bottled in Vorarlberg Austria and distributed over Europe via several (country) warehouses.

Opportunities
A project was defined to optimize the distribution network of Red Bull in Northern Europe. Main focus is on Germany, Benelux, Scandinavia and Poland.
The goal is to determine the most optimal distribution network structure: the optimal number of finished goods warehouses and their locations, whilst fulfilling customer service requirement, especially on lead-time.

Solution
The main cost drivers (transport costs, warehouse costs and inventory costs) are captured in a model. First, the model is verified based on actual orders and actual costs. After that, many scenario’s are calculated with the model to find the optimum.
Both in-country solutions and multi-country solutions are modeled, taking into account the impact on the transport rates. Also opportunities for rail transport are included.
The chosen solutions are further verified via sensitivity analysis, for example for different growth scenario’s

Benefits

• About 5% savings in logistics costs in optimal scenario
• Quantification of scenario’s
• Decision support tool: quantification of the impact of decisions, very helpful in discussions with higher management
• Guidelines for further improvements of the distribution network
• Sales density pictures.