Optimization of internal logistics processes with savings algorithm and mathematical modeling

Presently, logistics management is one of the most important critical processes that businesses face while carrying out their production or service activities. According to academic studies, one of the most common problem-solving methods preferred in logistics management is the Vehicle Routing Problem (VRP). This thesis was prepared within the scope of the Scientific Research Project initiated by Türkiye Uzay Sanayii A.Ş. on 27.02.2024. Analyzing the strategic importance and impact of lean manufacturing and internal logistics in the defense industry, the study examines the lean manufacturing methodology inspired by the Toyota Production System (TPS) and the goals of internal logistics to increase operational efficiency by reducing waste in processes. The study aims to optimize the operational processes of enterprises operating in the defense industry and increase their competitive advantage. In addition, it is aimed to identify existing best practices and to show how enterprises can benefit from these practices. Within the scope of the thesis, ARP applications and solution methods in the literature are examined and the focus is on the logistics services of a leading defense industry company. Both the savings algorithm model and the ARP solution are compared with the current situation and other methods. In particular, using the demand values and distance matrix for 17 stations (from Station 2 to Station 23), a solution model is developed that takes into account capacity constraints and warehouse layout. This solution model was implemented using the LINGO program. As a result, significant improvements were achieved in the logistics operations of a leading defense industry company and operational efficiency was increased. Comparisons between the current situation and alternative methods demonstrated the effectiveness of the strategies and provided valuable insights for the improvement of logistics processes. This project and thesis highlight the strategic importance of lean manufacturing and internal logistics in the defense industry and provides significant improvements in the logistics processes of a leading defense industry company.