December 1st, 2015 5:11 pm Category: Distribution, Global Supply Chain, Green Network, Inventory Management, Network Design, Optimization, Optimization Software, Scheduling, Solver Optimization, Supply Chain Improvement, Supply Chain Optimization, Supply Chain Planning, Transportation, Vehicle Routing, Warehouse Optimization, by: Gene Ramsay
Profit Point has been helping companies apply mathematical techniques to improve their business decisions for 20 years now, and it is interesting to review some of the advances in technology that have occurred over this time that have most enabled us to help our clients, including:
• The ability for companies to capture, store and access increasingly larger amounts of transaction and anecdotal data that quantify the behavior and motivation of customers, manufacturers, suppliers and other entities
• The improvement in analytical capabilities that help make optimized choices, in such areas as the solving mixed integer optimization problems, and
• The improvement of computing technology, allowing us to perform calculations in a fraction of the time required just a few years ago
A recent post on the Data Science Central website highlights the use of advanced techniques based on these advances by on-line marketplace Amazon, which is generally acknowledged as one of the most tech-savvy companies on the planet. 21 techniques are listed that Amazon uses to improve both their day-to-day operations and planning processes, including supply chain network design, delivery scheduling, sales and inventory forecasting, advertising optimization, revenue / price optimization, fraud detection and many others. For a complete list see the link below:
Like our customer Amazon, Profit Point is committed to using these techniques for the benefit of our clients – we have been concentrating on implementing business improvement for our clients, including optimization in various forms, since our very beginning. Are you, like Amazon, using the best methods to seize the opportunities that are available today?
Isn’t that one of our main objectives in life, whether the setting is business, participation in sports, your personal life?
I see part of our role at Profit Point as helping our clients to achieve their potentials. We do this by applying mathematical techniques to find good solutions to the problems that business leaders face. Many of our clients call upon us when their business is going through a time of transition, particularly when there is a merger of organizations.
Analyzing the potential for facility rationalization is one of the standard uses of our Profit Network infrastructure planning software. We, and clients, have used this software to decide how many plants, production lines and warehouses they need to best serve their customers in many different types of situations.
But mergers present opportunities to organizations further down the supply chain as well, of course. Many companies use vehicles to deliver product to customers on a regular basis, and when there is a merger (and at other times) well-run businesses are looking for ways to ensure that these types of activities are carried out efficiently.
Our Profit Vehicle Planner (PVP) software can help in planning for a merger at that next level down – for instance, when you have two organizations serving customers in a metro area, how do you combine them together?
The diagrams below give you an idea of the situation a company might face. They have operations in various parts of the country, serving hundreds of customers in each area. Their Southern California customers might be spread as in the pattern in the diagram below on the left.
To serve these customers they currently have five route territories, covering the customer deliveries, as is shown in the diagram on the right.
Now they plan to merge with a smaller competitor in the same type of business. The acquired company has customers in southern California with a similar spread across the geography, divided into two territories, as is shown in the diagrams below.
PVP will allow the analyst to look at all of the customers together,
and in this case, when the territory planning algorithm runs, it finds that deliveries can be made in six more-compact route territories, covering all customers. Separately the two companies had seven territories – and merged they have the potential to serve them with six – thus saving a truck and various associated expenses. The merged solution is shown below.
Implementing this merged solution can help the company better achieve its potential – for profits.
Upgraded Vehicle Route Planner Software Improves Decisions in Distribution Planning, Fleet Sizing, Driver Productivity and Transportation Cost Reduction
Profit Point announces the introduction of Profit Vehicle Planner™ 3.1, a major upgrade to our distribution analysis and design software. Profit Vehicle Planner is designed for Strategic Logistic and Transportation Managers that have large fleets with multiple daily delivery stops and changing logistics processes. The software update includes a combination of new features and technical enhancements which combine to support richer scenario modeling for larger large fleets with multiple daily delivery stops and changing logistics processes.
Designed to be highly accessible and customizable, Profit Vehicle Planner (PVP™) uses standard Microsoft business tools for calculation and display of information, including Excel, Access and MapPoint. The software automatically creates and designs the optimal sales/distribution territories. It does this by dividing customers into territories and days of service, with each territory representing the volume delivered by one delivery vehicle and one driver over the course of the planning horizon. The objective of the proprietary heuristic algorithm used in Profit Vehicle Planner is to assign customers to territories that will minimize the number of trucks required to serve the customer volumes while delivering within the various common and business-specific constraints, including customer frequency of service, hours available per day, volume available per truck, unique equipment requirements and virtually any other custom constraint required.
“With 12 years in the field, Profit Vehicle Planner has been put to the test against some of the world’s largest supply chain distribution problems,” noted Jim Piermarini, Profit Point’s Chief Technology Officer. “Transportation best practices have expanded over time, so decision makers are looking for more comprehensive strategic logistics and transportation modeling solutions.”
With the new release, PVP’s expanded features include extensive customization of the software to tailor the territory planning solution to be cost and time effective to meet your unique and specific distribution requirements and the ability to use imported address data to automatically geocode customers for whom lat/long data is missing.
For companies that perceive distribution as mission critical, users have the option to integrate PVP deeply into their supply chain systems to import and export data in to their ERP system. Companies that seek the most cost-effective solution have the ability to import virtually any relevant data from an Excel template that includes the following:
- Customer data such as address, location, frequency of service, volume per stop, time required per stop, other data as needed
- Truck data such as size, days of the week that it is available, order in which it is to be scheduled, hours available each day, special equipment, other data as needed
- Warehouse and district data such as location and characteristics of associated trucks and drivers
- Time related data such as start date of planning horizon and number of weeks in the planning horizon.
- Product specific data such as unit of measure of the product being delivered
- Any other data required to accurately model unique constraints
Once optimized, users have the ability to review and assess the characteristics of the territories that are created using tables and maps to provide an enhanced visual experience. And to ensure the optimal distribution plan, users can manually move customers from one territory to another or from one service day pattern to another (e.g. from Monday-Thursday to Tuesday-Friday), if desired.
June 22nd, 2012 3:46 pm Category: Distribution, Enterprise Resource Planning, Global Supply Chain, Green Network, Green Optimization, Network Design, Optimization, Supply Chain Agility, Supply Chain Improvement, Supply Chain Planning, Transportation, Vehicle Routing, by: Editor
Supply Chain optimization is a topic of increasing interest today, whether the main intention is to maximize the efficiency of one’s global supply chain system or to pro-actively make it greener. There are many changes that can be made to improve the performance of a supply chain, ranging from where materials are purchased, the types of materials purchased, how those materials get to you, how your products are distributed, and many more. An additional question on the mind of some decision makers is: Can I minimize my environmental footprint and improve my profits at the same time?
Many changes you make to your supply chain could either intentionally – or unintentionally – make it greener, so effectively reducing the carbon footprint of the product or material at the point that it arrives at your receiving bay. Under the right circumstances, if the reduced carbon footprint results from a conscious decision you make and involves a change from ‘the way things were’, then there might be an opportunity to capture some financial value from that decision in the form of Greenhouse Gas (GHG) emission credits, even when these emission reductions occur at a facility other than yours (Scope 3 emissions under the Greenhouse Gas Protocol).
As an example, let’s consider the possible implications of changes in the transportation component of the footprint and decisions that might allow for the creation of additional value in the form of GHG emission credits. In simple terms, credits might be earned if overall fuel usage is reduced by making changes to the trucks or their operation, such as the type of lubricant, wheel width, idling elimination (where it is not mandated), minimizing empty trips, switching from trucks to rail or water transport, using only trucks with pre-defined retrofit packages, using only hybrid trucks for local transportation and insisting on ocean going vessels having certain fuel economy improvement strategies installed. These are just some of the ways fuel can be saved. If, as a result of your decisions or choices made, the total amount of fuel and emissions is reduced, then valuable emission credits could be earned. It is worth noting that capturing those credits is dependent on following mandated requirements and gaining approval for the project.)
If your corporate environmental strategy requires that you retain ownership of these reductions, then you keep the credits created and the value of those credits should be placed on the balance sheet as a Capital Asset. Alternatively, if you are able, the credits can be sold on the open market and the cash realized and placed on the balance sheet. Either way, shareholders will not only get the ‘feel good’ benefit of the environmental improvement, but also the financial benefit from improvement to the balance sheet. If preferred, the credits can be sold to directly offset the purchase price of the material involved, effectively reducing that price and so increasing the margin on the sales price of the end-product and again improving the bottom line. If capital investment is required as part of the supply chain optimization, the credit value can also be a way to shorten the payback period and improve the ROI, or to allow an optimization to occur
So, when you consider improving your environmental impact or optimizing your supply chain, consider the possibility that there might be additional value to unlock if you include both environmental and traditional business variables in your supply chain improvement efforts.
Written by: Peter Chant, President, The FReMCo Corporation Inc.
Applying Lean Logistics Principles in Combination with Tactical Software to Improve Distribution Transportation Planning
May 23rd, 2012 3:56 pm Category: Distribution, Green Network, Profit Vehicle Planner, Profit Vehicle Router, Supply Chain Agility, Supply Chain Improvement, Supply Chain Planning, Supply Chain Software, Transportation, Vehicle Routing, by: Richard Guy
As the competitive environment changes the way companies do business, transportation managers are embracing lean principles mixed with tactical planning software to support cost reductions and quality improvements. Applying lean initiatives to supply chain and logistics operations is one method that allows businesses to reduce cost, but the marriage of tactical planning software with lean principles introduces a new approach and additional opportunity to eliminate waste.
Lean is a team-based form of continuous improvement that focuses on identifying and eliminating waste and increase of speed and flow of an operation, such as distribution of products. Waste can be defined as activities that do not add value for the customer.
A short waste target list for a distribution transportation planner may include the following:
- Underutilizing employees or behavioral waste
For example, managing a large delivery fleet with a relatively fixed, repeating delivery pattern will benefit from an optimal territory planning and routing solution. Since lean adds emphasis on waste, non-value added work, queue times, to traditional process analysis, improving the distribution and routing plan for a company’s fleet can eliminate waste in all of the above categories.
Selecting strategic territory planning software that will optimally divide a customer region into geographical “territories” based on customer delivery requirements can be an important first step in the lean process. Think of each territory is a contiguous area containing the customers that will form a single route, or a regular pattern of routes, over a day, week, month or other time period. Lean solutions can include optimal delivery territories shaped to minimize total travel and to equalize the delivery workload for drivers.
Most software packages utilize geographical mapping software such as MapPoint or Google Maps to generate a solution that will minimizes total travel miles while meeting customer service and delivery requirements. Some of these tools can also be personalized and customized to meet specific business requirements. Planning tools that create both territories and routes in a single integrated package appear to be the most popular.
Before implementing the territory planning software solution, let’s compare the results to the target list of waste. Transportation waste is minimized. Drivers (“employees”) become more productive since they now have a delivery territory designed to adhere to the driver profile, which may specify shift time and driving break intervals. Routes are optimized, so there is no more wasted motion time. Routes can be built to ensure sufficient inventory is available at all stops. Natural boundaries such as rivers, mountains, canyons and man-made boundaries such as rail tracks, major highways, canals can be model to create optimal delivery territories that are bounded by these constraints, thereby eliminating driver waiting to go around these obstacles.
In summary, managers that use transportation routing and territory planning software are following the lean principles to identify and reduce waste. Implementing the solution can potentially reduce transportation costs by 5% to 20% by decreasing miles traveled and increasing on-time delivery while dramatically increasing driver productivity. Lean principles when married to tactical planning software can be competitive weapons and a great advantage in tough economic times. Start considering lean logistics principles in conjunction with territory planning software applied to distribution transportation problems as opportunities to reduce waste.
Machinery Link is “Re-writing the Rules” about owning farm equipment. Today, machinery operating and ownership expenses account for nearly 40 percent of a producer’s total annual production costs. And the cost of owning agricultural equipment increases each year.
The MachineryLink Innovation Ag Equipment Program provides producers with popular name-brand combines. MachineryLink’s fleet of machines allows them to provide their customers with the size, model, and equipment features that best fit their farming operation.
MachineryLink manages transportation, scheduled delivery, maintenance, and parts, supported by professional operations, transportation, logistics, and field service teams. Combines move efficiently and dependably across the country between producers as harvest seasons progress.
Profit Point supports this process with a unique optimization approach for the logistics and delivery of the combines. The solution integrates world-class optimization, with state-of-the-art visualization and mapping software, allowing MachineryLink to rebalance their combine to customer assignments during the season. The system accommodates new customers and weather related delays, both issues that had upset their schedules in the past. Jim Bramlett, VP of Operations says: “This system is great; it allows us to increase our asset utilization, while maintaining excellent customer service.” Machinery Link is helping farmers lower their costs, and Profit Point is pleased to help them do it.
SuperShuttle introduces “Auto Routing” for Quicker Pick Up and Delivery to most of the nation’s largest Airports
Profit Point, MapInfo and SuperShuttle team up to provide the ultimate in Passenger Customer Service
PHOENIX – (December 18, 2007) – SuperShuttle just made getting to the airport and home easier with the introduction of “Auto Routing” a unique system for the delivery of real live people to and from most of the nation’s leading airports. Auto Routing is the brain child of Profit Point, Pitney Bowes MapInfo and SuperShuttle coming together to create a state-of-the-art pick up and delivery system for people that allows for the most efficient routing of SuperShuttle customers yet.
Profit Point, Pitney Bowes MapInfo and SuperShuttle created this programming capability which integrated their individual systems in to the centralized dispatch capabilities at SuperShuttle to provide passengers with a quicker and less complex pick up system for SuperShuttle customers nationwide. “Auto Routing” will reduce the pick up times, less time spent on the shared-ride vans for customers and quicker turn around at the airports overall.
“This has been a true team effort,” said Mike Hogan, Chief Technology Officer for SuperShuttle International. “The functionality of ‘Auto Routing’ is different than the typical delivery optimization of packages since we’re essentially delivering people. Packages don’t mind sitting in the delivery truck and going out of their way a bit. People, on the other hand, don’t like to be on the van too long, go to far out of their way, or backtrack to the airport. This new system actually delivers a whole new ‘on-time’ delivery system for our customers.”
Basically, “Auto Routing” can route each drivers entire day’s work in less than a minute whereas it would take a dispatcher anywhere from four to eight hours to accomplish the same.
Profit Point, Inc.
Profit Point is about the “Science of Better,” specializing in the improvement of a broad range of complex business processes in several industries. Profit Point’s solutions provide immediate benefits using cost-effective technology improvements with Targeted Software and focused consulting services. Please go to www.profitpt.com for more information.
SuperShuttle International, based in Phoenix, AZ is a division of Veolia Transportation On Demand and a subsidiary of Veolia Environment (Euronext: VIE, NYSE: VE). SuperShuttle serves 27 airports, carrying more than eight million passengers a year. Airports served by SuperShuttle include some of the largest in the country including Los Angeles, New York, Dallas/Ft. Worth, Washington, D.C. and Miami. Please go to www.supershuttle.com for more information.
Veolia Transportation, Inc.
Veolia Transportation is the leading provider of passenger ground transportation services on the North American continent, operating bus, rail, taxi, shuttle and para-transit systems in over 120 locations in the US and Canada. Veolia Transportation entered the North American market in 2001 and has quickly expanded to a national presence, with over 16,000 employees and annual revenues approaching $1 billion.
Profit Vehicle Router (PVR) is a sales and distribution territory planning application as well as an operational routing application. The software helps distributors save money by cutting the time needed to develop sales/distribution territories and schedules, as well as reducing delivery miles and the number of delivery vehicles and drivers needed. PVR helps you plan optimal delivery or sales route territories, cycle-day territories (what days each site will receive deliveries), and daily routes from a distribution center or office, thereby improving customer service, employee productivity and ultimately increasing profits.
PVR Assigns Your Customers to Efficient Route Territories
Go from chaos to organized in minutes. Create new territory assignments:
- As customers are added or deleted
- Or as often as you desire.
Suitable for both operational and planning purposes, streamlines your route-planning process, using computer-aided technology to:
- Reduce the staff time required to determine the optimal territories and routes,
- Reduce the number of delivery miles and delivery time, and
- Decrease the number of delivery vehicles and drivers you need.
To learn more about how Profit Point can help improve your vehicle routing and transportation systems, contact us here:
(866) 347-1130 or