Blue Sky National Network for Regional Supplier

Posted by Jason Tindley on 14-Apr-2023 14:45:00

Blue-Sky-National-Network-for-Regional-supplier The purpose of this case study is to illustrate the following:

  1. Blue sky distribution network development.
  2. The universality of our modelling tool:
    1. Delivery units included pallets, oversized pallets, stillages and nested or stacked products, all converted into standard pallet footprint equivalents.
    2. Some products or customers required vehicles with mechanical offloading capability; others could be served with conventional flat beds.
    3. Vehicle overloading was a risk, so order weight was also used as a constraint


This is a study for a regional supplier of construction materials operating from a single yard south of London that wished to establish a presence in the rest of the country.

The purpose of the study was to plot a road map that would allow the company’s growth into the remaining areas of the country where it had no presence using regional yards and its own fleet.

The Base Case

  • The blue columns show the populations of postcode districts the company delivered into for the period modelled illustrating the business’s current delivery territory excluding distant outsourced deliveries.
  • The columns’ height represents their percentage or share of the total population.
  • 2,700 postcode districts are represented.

The First Stage

  • The natural first stage is a Birmingham depot.
  • 80% of the population can be reached within 3 hours’ drive from one depot or the other.
  • The grey columns are regions beyond three hour’s drive from either depot.
  • Each postcode district is attached to its nearest depot.
  • Birmingham could reduce the load on the existing site as shown in the bar chart.

The Second Stage

  • The natural second stage is a Leeds depot to be able to reach the North-East and reduce delivery resources and costs.
  • 84% of the population can be reached within 3 hours’ drive from one depot or another.
  • Delivery costs would decrease for the North.
  • Similar volume is likely to be delivered from each depot to its area. 
  • The grey columns are regions beyond three hour’s drive from any depot

The Final Stage

  • Adding Motherwell in Scotland will allow access to the final 8% of the population reachable within three hours’ drive.
  • It would be the smallest site.
  • The total population reachable would be 96%.
  • Suppliers will charge a premium to deliver stock to Scotland.

The Recommendation

  • The recommendation was for a three site solution.  It would not be the cheapest from the transport point of view but:
  • It would reach the bulk of the population of England and Wales and nearly the same as a four or five site solution (see bar chart above).
  • It would benefit from the economies of scale from having three similarly sized sites.
  • It would be less complex.
  • It would be likely to be the cheapest network overall.
  • It could be supplemented by Scotland eventually to reach 92% of the population.


To conclude the study, a detailed and costed solution was prepared for the two depot scenario (existing plus Birmingham).  This first step solution would allow the company to double its sales delivered on own fleet for the same delivery cost per tonne as current.  In due course the company could decide whether or not there would be a business case to add a third yard to the network to serve the North from. 

Transport Planning & Optimisation

Topics: Network Design

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