Brushpainters makes 1080 renovations in a year in the capital region of Helsinki, Finland. We have some 30 employees and subcontractors working in the projects. Where would the optimal location be for our own warehouse and office?
Our old office and warehouse is in Porvoonkatu 5-7
During this optimization process I realized once again, that my own perspective to any phenomena is always limeted to my own perception and environment. So it is a biased perspective! As I drove to work to our old office in Kallio, I thought that we are too much to the south.
Me, myself and I driving to work, thinking about thinking and being biased.
As we were reluctant to move the office and warehouse, as it is a lot of work, destiny was kind enough to kick us in the back with Radon gas! Turns out, our office in Porvoonkatu 5-7 has radon average of 1126 Bq/m3. It is illegal to use this office for office use. Time to go!
Our goal? To minimize driving, reduce diesel costs, and enhance efficiency for our workers and 13 vans, while providing top-notch renovations to our clients in Helsinki, Espoo and Vantaa in Finland!
Where should we be then? Picture of Lauri with a map an Avensis with nice rims too!
Data driven approach
I have studied stress analysis and Finite Element Method, so I thought there has to be a similar approach in finding the optimal location for any business. Mathematics would be helpful here. I was dreaming of a FEM analysis of company location.
We’ve been diligently collecting data that will help us make this crucial decision. Here’s a snapshot of what we’ve gathered so far:
We know where our employees live.
We have the exact locations of our 2,600 work sites in the capital region around some ten years.
We’ve tracked every movement of our 13 delivery vans with the ABAX system.
We can find trips associated with our current office location on Porvoonkatu.
We also have valuable insights from our renovations. We gathered the street names of 1,080 clients we’ve served in the past year across Espoo, Helsinki, Vantaa, and the surrounding areas. Using the Google Maps Geocoding API, we pinpointed 1,062 of these addresses with precision, providing us with latitude and longitude coordinates.
Visualizing the Data
To give you a clearer picture of our findings, we’ve created a heatmap and cluster map showcasing the density of our clients.
Van Tracking Analysis
Our van tracking data has allowed us to examine the routes of our 11 vans. While we have information on trip start and stop addresses, we’ve encountered some challenges with duration and distance calculations due to round trips.
To zero in on the trips related to our office, we’ve considered those involving Porvoonkatu in vehicle tracking system, that is our current warehouse. In the period from August 1, 2022, to August 7, 2023, we analyzed:
13,956 total trips
3,024 trips involving Porvoonkatu
So Company sensitivity to warehouse and office location is ⅕! Only one fifth of total trips come to the office.
On top of this, three of our office employees travel five times a week to the office on company diesel. We have considered all of these trips throughout the year to find the optimum location.
Calculations for 17 possible new locations
For the calculation part we have used Google’s Distance Matrix API. The Distance Matrix API is a service that accepts an HTTPS request containing origins and destinations for a given mode of transport. For each combination of origin and destination, it returns travel distance and duration.(Copied from their website for context).
To clear, if a trip was made from warehouse to client location, the warehouse would be start address and if a trip was made from client location to warehouse, the warehouse would be the stop address. If Poorvankatu was found in either start or stop address, we replaced that with our chosen new warehouse location.
In this trial and error process we checked total distance and total time of all the trips associated with warehouse for 17 different locations spread out in Helsinki, Espoo and Vantaa in Finland!
Picture here of possible new locations
The distance and time was returned by Google maps API. For 3,024 trips associated with Poorvankatu and 17 warehouse selectors, we ran the API 51,408 times!
Almost FEM-analyisis 🙂
Picture of computer chip owerheating
What did we find with our calculations?
- The images show diesel cost, time cost and total cost in a year, taking into account workers trips from client side to warehouse and employee travels between their home and office.
- We can see that current warehouse is already in a good enough location
- There are very few locations, saving up to only 8% of total cost
- Centrally located areas have more or less similar cost
- Extreme left and extreme right have exponentially higher costs
- Going towards Espoo increases cost significantly (as seen in the clients map as well that most clients are away from Espoo
So where should we be then?
Optimal area is slightly to the south from Kehä I, Ring I and in the middle in south-west wise.
Why was Lauri wrong?
As any man is misled by his familiar surroundings and his own evereyday life, Lauri was no exception. It proved to be , that our current locations was very good indeed, even though it is much to the south! Lauris struggle in the traffic jam from Kivistö to Kallio did not tell much of the totality of the company logistics operations.
Where did we end up eventually?
There are other factors also to consider in this task. Those are rent, premises condition and quality, warehouse details, restaurants, parking lots and fees, general feeling etc…
I made some calculations in excel where I tried to take into account all of these.
Brushpainters new location is Valimotie 13 A!
After all of the calculations and visiting quite a many premises, we chose to move to Pitäjänmäki!
VValimoCenter had the best mixture of warehouse and office space and lots of lunch restaurants. Also this location was calculated to be logistically more affordable than Kallio. It shows that we spend slightly more on diesel but we save more on time. So this is a better location that we had! And the premises are a light year ahead. Also we can grow in these premises if needed.
As the options were quite close of being as good, the last choice was done with a gut feeling. When we had two likely good alternatives, the final choice was done based on a feeling.