Re -design Of Smartphone X Distribution Routes In Meeting The Increase In Demand In North Sumatra Province
Introduction
The rapid growth of the smartphone industry in Indonesia, particularly in North Sumatra Province, has led to a significant surge in demand for Smartphone X. As the sole distributor, CV ABC is responsible for distributing Smartphone X to various destinations in the province. However, with the increase in demand, the frequency of distribution has also increased, resulting in high transportation costs. In this article, we will discuss the re-design of Smartphone X distribution routes to meet the increase in demand in North Sumatra Province.
Background
The development of technology has made smartphones an essential need for every individual. As a result, the smartphone industry has experienced significant growth in recent years, and this trend is expected to continue in the future. Smartphone X, which was launched in Indonesia five years ago, has recorded a significant sales in North Sumatra Province, reaching 8.3% of the total national sales in 2017. Based on forecasting, the demand for Smartphone X in North Sumatra Province is expected to increase by 27.5%, with a total of 120,174 units in 2019.
Current Distribution System
The current distribution system of Smartphone X in North Sumatra Province involves two branches in Medan and two branches outside Medan, namely Tanjung Morawa and Binjai. The transportation process starts from the port using a box car with a capacity of 1000 units (equivalent to 10 containers). After processing orders in the branch, the smartphone is then channeled to the destination using a car that can accommodate 120 units. However, this system has several limitations, including high transportation costs and long delivery times.
The Need for Re-design
To expand consumer reach and minimize transportation costs, CV ABC plans to add new branches and review the existing distribution routes. The company management has identified the need for a more efficient distribution system that can meet the increasing demand for Smartphone X in North Sumatra Province. The re-design of distribution routes is essential to ensure that the company can provide faster and more reliable services to its customers.
Methodology
To determine the optimal distribution route selection criteria, the Analytic Hierarchy Process (AHP) method is used by the company management. The analysis showed that the transportation costs contributed 30.93% in decision making, followed by road surface quality of 17.01%, traffic conditions of 17.58%, ease of access of facilities of 14.40%, and road security of 20.08%. After the criteria assessment, the selection of distribution routes is carried out using the Weighted Product model involving drivers and kernet.
Results
The proposed distribution route turned out to be able to reduce transport costs by 32.41%, which is equivalent to savings of Rp. 1,873,416 per distribution cycle that lasts for two weeks. If the new distribution design is implemented thoroughly, it is estimated that the company can save transportation costs of around Rp. 48,708,808 for 2019.
Conclusion
The re-design of Smartphone X distribution routes in North Sumatra Province is essential to meet the increasing demand for the product. By applying the AHP method and the Weighted Product model, the company can identify the optimal distribution route selection criteria and reduce transportation costs. The implementation of the new distribution design will not only increase company productivity but also contribute to customer satisfaction. Consumers who get faster services and lower shipping costs tend to be loyal to the product, which in turn will support the growth of X smartphone sales in North Sumatra Province.
Recommendations
In the future, it is essential for companies to continue to monitor and evaluate the distribution routes applied in order to adapt to changes in market demand and road conditions, thereby ensuring better business sustainability. The company should also consider investing in technology, such as logistics management software, to improve the efficiency of the distribution system.
Limitations
This study has several limitations, including the use of a single case study and the reliance on secondary data. Future studies should consider using multiple case studies and primary data collection to provide a more comprehensive understanding of the re-design of distribution routes.
Future Research Directions
Future research should focus on exploring the application of other methods, such as the Simple Additive Weighting (SAW) method, to determine the optimal distribution route selection criteria. Additionally, studies should investigate the impact of the re-design of distribution routes on customer satisfaction and loyalty.
Conclusion
In conclusion, the re-design of Smartphone X distribution routes in North Sumatra Province is essential to meet the increasing demand for the product. By applying the AHP method and the Weighted Product model, the company can identify the optimal distribution route selection criteria and reduce transportation costs. The implementation of the new distribution design will not only increase company productivity but also contribute to customer satisfaction.
Q: What is the main objective of re-designing Smartphone X distribution routes?
A: The main objective of re-designing Smartphone X distribution routes is to meet the increasing demand for the product in North Sumatra Province while minimizing transportation costs and improving customer satisfaction.
Q: What are the key factors that affect the selection of distribution routes?
A: The key factors that affect the selection of distribution routes include transportation costs, road surface quality, traffic conditions, ease of access of facilities, and road security.
Q: What is the Analytic Hierarchy Process (AHP) method, and how is it used in this study?
A: The AHP method is a decision-making tool that helps to identify the most important factors in a decision-making process. In this study, the AHP method is used to determine the optimal distribution route selection criteria by weighing the importance of each factor.
Q: What is the Weighted Product model, and how is it used in this study?
A: The Weighted Product model is a mathematical model that helps to calculate the weighted score of each distribution route based on the importance of each factor. In this study, the Weighted Product model is used to select the optimal distribution route.
Q: What are the benefits of re-designing Smartphone X distribution routes?
A: The benefits of re-designing Smartphone X distribution routes include reduced transportation costs, improved customer satisfaction, and increased company productivity.
Q: How can companies ensure better business sustainability in the future?
A: Companies can ensure better business sustainability in the future by continuously monitoring and evaluating the distribution routes applied, adapting to changes in market demand and road conditions, and investing in technology, such as logistics management software.
Q: What are the limitations of this study?
A: The limitations of this study include the use of a single case study and the reliance on secondary data. Future studies should consider using multiple case studies and primary data collection to provide a more comprehensive understanding of the re-design of distribution routes.
Q: What are the future research directions for this study?
A: Future research directions for this study include exploring the application of other methods, such as the Simple Additive Weighting (SAW) method, to determine the optimal distribution route selection criteria, and investigating the impact of the re-design of distribution routes on customer satisfaction and loyalty.
Q: How can companies apply the findings of this study to their own distribution systems?
A: Companies can apply the findings of this study to their own distribution systems by using the AHP method and the Weighted Product model to determine the optimal distribution route selection criteria, and by continuously monitoring and evaluating their distribution routes to ensure better business sustainability.
Q: What are the implications of this study for the smartphone industry?
A: The implications of this study for the smartphone industry are that companies should prioritize the re-design of their distribution routes to meet the increasing demand for their products, while minimizing transportation costs and improving customer satisfaction.