Achieving Your Potential

July 12th, 2012 12:06 pm Category: Distribution, Optimization, Profit Vehicle Planner, Transportation, Vehicle Routing, by: Gene Ramsay

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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.

 

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