Applying route optimization model in supply chain for reducing shipping costs: Micro distribution

Continuous globalization affects all business sectors throughout the world. Moreover, today?s fierce market conditions drive companies to search new ways to survive in this competition. Supply Chain Management (SCM) is emerged as an effective way of managing companies which forces organizations to make improvements not only in their internal processes but also in the entire supply chain. Distribution factor is undeniable to improve their supply chain. For perfect distribution, internal factors such as vehicle number, vehicle type, customer, cost and external factors such as traffic, customer warehouse density must be managed effectively. For these reasons, this thesis have dual aims namely, integrating Enterprise Resource Planning (ERP) to third party software (ESRI) for satisfying distribution optimization and bring in value-added on supply chain management area at Turkey and proving that Distribution Zone Approach (DZA) is an ideal method for intensive delivery firms and pioneering for peers in Turkey. By applying this method, a decrease in shipping costs will be expected.