Allocation Model Re-Design
Problem
A non-profit food distributor found themselves dissatisfied with how quickly they could move donations through their distribution network.
How could they use the information they already had to build a model that helped them allocate perishable donations appropriately and quickly?
Solution
Together, we created a model and a database system where they can accurately measure the capacity of their individual donation centers and thereby identify availability within donation centers and send product to where it can be used the fastest.
The model allowed them to reduce allocation decisions from days to minutes.
The approach
What was the problem and how did we solve it?
The non-profit had a limited amount of perishable food-based donations that they needed to distribute in a short amount of time due to the perishability. The non-profit was connected to several dozen donations centers. Each donation center had a maximum amount of product they could hold and frequency with which they could turn product.
When a new perishable donation came in, the non-profit needed a quick way to determine how much should be allocated to each donation center without having to ask each donation center to place an order for what they needed.
Success in this project was measured by how much faster each donation could be distributed.
We learned together that we had all the information we needed to predict accurately where donations should go when they came in, but we needed a system to track all three aspects of distribution - the incoming product from the non-profit, the product that had not yet been distributed, and the outgoing product as it was regularly distributed. The client did not have the resources to pay for software to do this, so we came up with a scrappy solution in Excel.
We built a model based on historical data that at any point could predict how much inventory was at any given donation center and how much additional product a donation center could hold.
The model was a great success - it allowed the non-profit to make distribution decisions within minutes rather than days on key donations, thus getting fresher and more food faster to donation centers than before.