Vehicle Route Optimization

Report
Transportation Guru
Vehicle Route
Optimization
LLamasoft Overview
We are:
• 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 enable
companies to:
• Optimize their end-to-end supply
chain operations
• Reduce corporate risk and identify
major cost savings
• Perform continuous what-if
analysis
© 2012 LLamasoft, Inc. All Rights Reserved
Sample Customers
Automotive / Industrial Manufacturing
Consumer Goods
Defense
Hi-Tech / Electronics
Food
Beverage
Life Sciences
Grocery
Logistics
Apparel
Manufacturing
Petroleum
Public Health
Retail
Chemical
© 2012 LLamasoft, Inc. All Rights Reserved
Technology
© 2012 LLamasoft, Inc. All Rights Reserved
Supply Chain Guru
A Complete Supply Chain Design Platform
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
Vehicle Route
Optimization
Network
Optimization
Enterprise
Simulation
© 2012 LLamasoft, Inc. All Rights Reserved
A Design Engine containing
multiple integrated solvers,
operations research algorithms,
and simulation engines
Inventory
Optimization
5
Four Components of a Comprehensive Design Solution
•
•
•
•
•
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Safety Stock
Service vs. Inventory
Replenishment
Frequency
•
•
•
•
•
Facility Locations
Customer
Assignments
Mode Selection
© 2012 LLamasoft, Inc. All Rights Reserved
•
Network Validation
Customer Service
Operational Metrics
Optimal Transportation
Routes
Inbound shipment
consolidation
Outbound shipment
consolidation
6
Transportation Guru
Creating 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*
Transportation
Optimization
Determine
optimal multistop routes using
detailed cost
models
 Fully integrated within Supply Chain
Guru
© 2012 LLamasoft, Inc. All Rights Reserved
* Coming soon!
7
Network Optimization vs. Vehicle Route Optimization
Network Optimization
Design supply chain network
using point-to-point lanes and
simplified cost models
© 2012 LLamasoft, Inc. All Rights Reserved
Vehicle Route Optimization
Determine optimal routes for inbound
and outbound shipment
consolidation
9
Mission of Transportation Guru
What it is
• 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
• A Transportation Management System (TMS)
What it is not
© 2012 LLamasoft, Inc. All Rights Reserved
10
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
Inputs (Required)
Outputs
Route
Summary
Sites
Stop Details
Shipments
Vehicle
Route
Planning
Transportation
Assets
Delivered
Shipments
Segments
Asset
Availability
Invalid
Shipments
Rate
Unroutable
Shipments
Inputs (Optional)
Business
Hours
© 2012 LLamasoft, Inc. All Rights Reserved
Transit
Override
Relationship
Constraints
* Valid
Schedules
* Periodic VRP Only
12
Example VRP Parameters and Constraints
Shipments
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•
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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
•
•
•
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Rates
•
•
•
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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
© 2012 LLamasoft, Inc. All Rights Reserved
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
Relationship Constraints
•
•
•
•
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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
© 2012 LLamasoft, Inc. All Rights Reserved
Algorithm Overviews
© 2012 LLamasoft, Inc. All Rights Reserved
Standard Inbound or Outbound
What can the Standard VRP
solve?
What are the benefits?
• Consolidation of pickups or deliveries for multiple
suppliers or customers into cohesive routes
• Identify shipment consolidation opportunities to reduce
transportation costs by creating multi-stop vehicle routes
Utilizing Standard VRP Optimization
There are many ways to apply standard VRP optimization technology.
Here are just a few examples:
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© 2012 LLamasoft, Inc. All Rights Reserved
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
What can the Periodic VRP
solve?
What are the benefits?
• Scheduling optimization on top of standard VRP to identify how
frequent and when to deliver or pickup on multi-stop routes
• Determine schedule for multi-stop vehicle routes to minimize
costs while adhering to scheduling requirements
Utilizing Periodic VRP Optimization
There are many ways to apply periodic VRP optimization
technology. Here are just a few examples:



© 2012 LLamasoft, Inc. All Rights Reserved
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
What can the Backhaul VRP
solve?
What are the benefits?
• Identify the most efficient inbound pick-ups
following the last delivery of an outbound route
• Reduce the overall drive time required and
generate significant cost savings
Utilizing Backhaul Optimization
There are many ways to apply backhaul optimization technology. Here are
just a few examples:
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© 2012 LLamasoft, Inc. All Rights Reserved
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
What can the Continuous
Moves Interleaved VRP solve?
What are the benefits?
• Interleaved pick-ups and drop-offs within cohesive routes
• Create multi-stop routes that include pickups and deliveries
interleaved throughout route to minimize costs
Utilizing Continuous Moves Interleaved
VRP Optimization
There are many ways to apply Interleaved VRP optimization
technology. Here are just a few examples:
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© 2012 LLamasoft, Inc. All Rights Reserved
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
What can the Asset Planning
VRP solve?
What are the benefits?
• Balance optimizing fleet size while finding good
routes
• Ability to identify efficient multi-stop vehicle
routes while minimizing asset utilization
Utilizing Asset Planning VRP
Optimization
There are many ways to apply Asset Planning VRP optimization
technology. Here are just a few examples:

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© 2012 LLamasoft, Inc. All Rights Reserved
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
© 2012 LLamasoft, Inc. All Rights Reserved
Transportation Guru Customer Use Cases
• 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!
• Shipment consolidation
• Delivery network synergies 
Combine business units
© 2012 LLamasoft, Inc. All Rights Reserved
• Weekly scheduling
• Load balance across week
Route
Optimization
Load
Balancing
Load
Consolidation
Asset Analysis
• LTL vs. Truckload Shipping
• 3PL vs. Dedicated
• Route composition by asset
• Asset Planning – Coming
Soon!
Last Mile Delivery Company
Goal
Results
• 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 shipments
• Identified 37 key strategic distribution center locations
• Resulted in efficient multi-stop vehicle routes
• Found balance in minimizing facility costs and transportation costs
© 2012 LLamasoft, Inc. All Rights Reserved
Large Petroleum Company
Goal
Results
• 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 pay
• 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
© 2012 LLamasoft, Inc. All Rights Reserved
>$20B Large U.S. Grocery Wholesaler
Goal
Results
• Model DOT hours, prevent comingling of competitor loads, etc.
• Analyze seasonality variances in demand week profiles
• Model existing baseline route structure vs. optimized scenario
• 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 structure
© 2012 LLamasoft, Inc. All Rights Reserved
Tanzania Medicine Delivery
Goal
Results
• 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
Tanzania
• Identified consolidated vehicle routes that address seasonality
variability
• Client used results from model to actually run routes
© 2012 LLamasoft, Inc. All Rights Reserved

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