Transportation Guru Vehicle Route Optimization. © 2012 LLamasoft, Inc. All Rights Reserved...

Transportation GuruVehicle Route Optimization

© 2012 LLamasoft, Inc. All Rights Reserved

LLamasoft Overview

•Optimize their end-to-end supply chain operations

•Reduce corporate risk and identify major cost savings

•Perform continuous what-if analysis

•The global leader in supply chain design technology & solution services

•Focused 100% on supply chain modeling & scenario analysis

•Headquartered in Ann Arbor, MI with support centers around the world

We are:

We enable companies to:


Sample Customers

Automotive / Industrial Manufacturing Consumer Goods Defense

Hi-Tech / Electronics Food Beverage

Life Sciences Grocery Logistics

Apparel Manufacturing Petroleum

Public Health Retail Chemical

http://www.northropgrumman.com/index.html

http://www.transcom.mil/

http://www.generalmills.com/corporate/index.aspx

http://www.pepsico.com/

http://www.meadwestvaco.com/index.htm

http://www.conocophillips.com/

http://www.slb.com/index.asp?

http://en.wikipedia.org/wiki/Image:JohnsonandJohnsonLogo.gif

http://www.rockwellautomation.com/

http://www.chrysler.com/en/

http://unilever.com/default.asp

http://www.pinnaclefoodscorp.com/index.html

http://carestreamhealth.com/

http://www.syngenta.com/en/index.aspx

http://www.cocacola.co.jp/


Technology


Supply Chain GuruA Complete Supply Chain Design Platform

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An Intuitive User Interface for complete control of Supply Chain Modeling and Design Activity

A Supply Chain Intelligence Database with reference data, and pre-configured data connectors

A Design Engine containing multiple integrated solvers, operations research algorithms, and simulation engines

Vehicle Route Optimization

EnterpriseSimulation

InventoryOptimization

NetworkOptimization


Four Components of a Comprehensive Design Solution

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• Facility Locations• Customer

Assignments• Mode Selection

• Network Validation• Customer Service • Operational

Metrics

• Optimal Transportation Routes

• Inbound shipment consolidation

• Outbound shipment consolidation

• Safety Stock• Service vs. Inventory• Replenishment

Frequency

InventoryOptimizatio

nSimulation

Vehicle Route

Optimization

NetworkOptimizatio

n


Transportation GuruCreating Multi-Stop Vehicle Routes

Vehicle route optimization (VRO) that creates multi-stop vehicle routes

Uses optimization to design routes for: • Inbound Consolidation• Outbound Consolidation• Periodic Shipment Balancing• Continuous Moves Backhaul• Continuous Moves Interleaved

Shipments*• Asset Planning*

Fully integrated within Supply Chain Guru

7

Transportation OptimizationDetermine optimal multi-stop routes using detailed cost models

* Coming soon!


Network Optimization vs. Vehicle Route Optimization

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Network OptimizationDesign supply chain network using point-to-point lanes and simplified cost models

Vehicle Route OptimizationDetermine optimal routes for inbound and outbound shipment consolidation


Mission of Transportation Guru

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• Technically sound vehicle routing program• Extensive what-if scenario capabilities• Extension of network design into much needed

analyses within the same model structure• Single software platform integrating multiple

components of network and transportation system design

What it is

• A Transportation Management System (TMS)

What it is not

Transportation Design Questions

How should I consolidate shipments to build multi-stop routes?

Should we ship direct from the vendor or go through the DC?

How much savings will I see if I optimize my baseline existing routes?

Are there backhaul opportunities?

How do my routes change with low, average, and high volume shipment levels throughout the year?

Are there network synergies? Opportunities to consolidate transportation systems among business units?

How do route costs compare to LTL and parcel costs?

Should we consider a 3PL in addition to our private fleet?

How do I balance my shipments across a weekly schedule?

What is my allocated route cost by shipment?

How do I balance my facility costs versus transportation costs?

How do I balance my drivers workloads?


Transportation Guru Data Flows

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Shipments

Transportation Assets

Asset Availability

Sites

Invalid Shipments

Delivered Shipments

Unroutable Shipments

Route Summary

Stop Details

Inputs (Required) Outputs

Business Hours

* Valid Schedules

Inputs (Optional)

* Periodic VRP Only

VehicleRoute

Planning

Relationship Constraints

Transit Override

Rate

Segments


Example VRP Parameters and Constraints

Shipments• Delivery and pickup time windows• Priority• Fixed and variable loading/unloading

time• Business hours• Road distance & transit time

calculations via PC*Miler, ESRI, Bing

Assets• Capacity: Weight, Cube, Units• Second compartment capacity• DOT Hours of Service• Max stops, distance, time, waiting

time per route• Max distance between stops• Round trip or one-way

Rates• Per distance, stop charges, fuel

surcharges, min charge, discounts, driver hourly, service unit cost

• Step functions: banded mileage, first stop free

• Location based rates: origin, last destination, farthest destination

• Compare LTL/Parcel rates – SMC3 RateWare XL, FedEx, UPS integration

Relationship Constraints• Prevent products from shipping

together• Force products on certain assets• Prevent assets at certain locations• Prevent certain shipments being

combined• Force certain assets with lift gate to

locations


Transportation Guru Software Demonstration


Algorithm Overviews


Standard Inbound or Outbound

• Consolidation of pickups or deliveries for multiple suppliers or customers into cohesive routes

What can the Standard VRP solve?

• Identify shipment consolidation opportunities to reduce transportation costs by creating multi-stop vehicle routesWhat are the benefits?

Utilizing Standard VRP Optimization There are many ways to apply standard VRP optimization technology. Here

are just a few examples:

Instead of running LTL lanes, multi-stop vehicle routes can be run to reduce overall costs

Optimize existing baseline routes to identify better shipment consolidation and route sequences

Create high, average, and low volume routes to address seasonality shipment volume shifts

Adjust transportation constraints to identify how route structure changes

Determine how Department of Transportation (DOT) regulation changes affect route structure


Periodic Vehicle Route Optimization

• Scheduling optimization on top of standard VRP to identify how frequent and when to deliver or pickup on multi-stop routes

What can the Periodic VRP solve?

• Determine schedule for multi-stop vehicle routes to minimize costs while adhering to scheduling requirementsWhat are the benefits?

Utilizing Periodic VRP Optimization There are many ways to apply periodic VRP optimization

technology. Here are just a few examples:

Identify frequency of deliveries or pickups balancing contract requirements and transportation costs

Determine delivery or pickup schedule for all locations while considering transportation system constraints

Balance shipment schedule throughout the week


Continuous Moves Backhaul Optimization

• Identify the most efficient inbound pick-ups following the last delivery of an outbound route

What can the Backhaul VRP solve?

• Reduce the overall drive time required and generate significant cost savingsWhat are the benefits?

Utilizing Backhaul Optimization There are many ways to apply backhaul optimization technology. Here are

just a few examples:

Retailers can pick-up returns from stores following deliveries and bring them back to the DC

Following deliveries to retail stores, trucks can pick up materials from suppliers and bring to warehouse

3PL or carriers can make deliveries and then fulfill pick-up requests on the way back

Direct store delivery trucks can pick up empties or expired goods following store deliveries


Continuous Moves Interleaved Shipments Optimization

• Interleaved pick-ups and drop-offs within cohesive routesWhat can the Continuous Moves Interleaved VRP solve?

• Create multi-stop routes that include pickups and deliveries interleaved throughout route to minimize costsWhat are the benefits?

Utilizing Continuous Moves Interleaved VRP Optimization

There are many ways to apply Interleaved VRP optimization technology. Here are just a few examples:

Retailers can create routes that move product between stores

Warehouses can transition inventory to other facilities with inter-facility routes

New product and returns can be considered on one route

3PL’s can consider delivery and pickup requests during a single route


Asset Planning Optimization

• Balance optimizing fleet size while finding good routes

What can the Asset Planning VRP solve?

• Ability to identify efficient multi-stop vehicle routes while minimizing asset utilizationWhat are the benefits?

Utilizing Asset Planning VRP Optimization

There are many ways to apply Asset Planning VRP optimization technology. Here are just a few examples:

Determine optimal private fleet size Utilize optimization parameter to identify how many

assets are needed to run optimal routes Minimize private fleet and 3PL carrier assets Consider which 3PL carriers to use in addition to

private fleet


Transportation Guru Use Cases


Transportation Guru Customer Use Cases

• LTL vs. Truckload Shipping• 3PL vs. Dedicated• Route composition by asset• Asset Planning – Coming

Soon!

• Shipment consolidation• Delivery network synergies

Combine business units

• Weekly scheduling• Load balance across week

• Baseline vs. Optimized Routes• Direct vs. DC Shipping• Optimized routes for low, avg,

and high volume seasonality• Backhaul optimization• Continuous Moves

(simultaneous pickups and drop-offs ) – Coming soon! Route

OptimizationLoad

Balancing

Asset AnalysisLoad Consolidation


Last Mile Delivery Company

• Identify new DC locations using a Greenfield Analysis• Run Network Optimization to identify optimal sourcing• Run Transportation Guru to find efficient routes to 45K end customers

for 45k individual shipmentsGoal

• Identified 37 key strategic distribution center locations• Resulted in efficient multi-stop vehicle routes• Found balance in minimizing facility costs and transportation costsResults


Large Petroleum Company

• Identify new location to hire field service rep to service oil pipelines• Reassign oil pipeline servicing locations to each service rep• Balance workload of reps and minimize overtime payGoal

• Identified three new locations to hire service reps and service routes• Utilize step functions to minimize overtime hours• Balanced servicing location assignments among reps while

maintaining balanced workload Results


>$20B Large U.S. Grocery Wholesaler

• Model DOT hours, prevent comingling of competitor loads, etc.• Analyze seasonality variances in demand week profiles• Model existing baseline route structure vs. optimized scenarioGoal

• Peak demand better addressed using carriers than dedicated fleet• Optimizing routes results in significant savings & reduced empty miles• Went to market with optimized transportation network structureResults


Tanzania Medicine Delivery

• Model specialized asset requirements for rainy vs dry season• Identify load consolidation and multi-stop vehicle routes• Utilize viable road network to model routes in remote areas of

TanzaniaGoal

• Identified consolidated vehicle routes that address seasonality variability

• Client used results from model to actually run routesResults

Transportation Guru Vehicle Route Optimization. © 2012 LLamasoft, Inc. All Rights Reserved...

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Transcript of Transportation Guru Vehicle Route Optimization. © 2012 LLamasoft, Inc. All Rights Reserved...