Efficiency Analysis Of Illona Tissue Product Distribution Route With Saving Matrix & Nearest Neighbour Method

Abstract

The current era of globalization makes all components in an economic or business activity experience significant acceleration and change starting from production, distribution, and consumption. The distribution of goods and services is one of the fundamental aspects of business activities, which has a significant impact on the overall success of the company. Therefore, it is imperative for companies to plan their distribution activities in an efficient manner. The purpose of this study is to design efficient alternative routes that minimize distance, time, and distribution costs by considering customer/outlet locations, total demand, and vehicle capacity. This research was conducted at PT Juragan Gemilang Indonesia located in Purwokerto city, the research focused on Illona tissue products by using two analysis methods, namely saving matrix and nearest neighbor method which resulted in saving the number of routes from 11 to 8 and several other savings, such as 44.49% (2,540 km to 1,410 km) for distance, 33.61% (3,904 minutes to 2,592 minutes) for time, and 44.49% (IDR 1,727,200 toIDR 958,800) for cost.

Keywords: distribution, route; efficiency, saving matrix, nearest neighbor, tissue product.