Route2000 - Rolighed
• Real time routing
Challenges and experiences from
real life large scale implementations
• Ole Kessel,
Partner and DPS manager
PricewaterhouseCoopers
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Introduction to DPS CoE
• There is real value in real time routing !
• The challenge in the transportation market
• Our vision and messages to customers
• The DPS service offerings
• Our market position and references
• Short presentation of real life solutions
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There is real value in real time routing
• Aalborg Portland (100 truck cement distribution):
- 7% in operating costs, - 75% in administrative staff
• KFK (700 truck fodder & grain transporter):
- +10% improved truck work load
• Swedish Postal Services:
- 10% reduction in routing costs
• MD-Foods (400 truck dairy & fresh food distributor):
- 4% in total route costs
• SPF (100 truck living pig transporter)
- 7% in operating costs
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The challenge in the transportation
market: 1
• JIT & e-business imply:
– Shorter business cycle
– Faster and more in-frequent deliveries
– Smaller order sizes
– Focus on precision and flexibility
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The challenge in the transportation
market: 2
• Transportation is an important but often overseen
part of the Integrated Supply Chain (ISC):
– Transportation is the crucial physical link
- between suppliers, manufacturers & buyers
- internally in multi-site manufacturing
– The weakest link decides the value of the ISC
• Substitution between transportation, warehousing and
manufacturing costs should be considered
• Using transportation more offensive creates
competitive advantages
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The challenge in the transportation
market: 3
• The transporters must act to survive
– Agility through dynamic decisions
– High customer service a necessity
– But keeping low costs is a pre-requisite
• First movers will get the competitive advantage
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Our vision and messages to customers
• Agility, speed and precision in transportation scheduling
– Avoid unnecessary locking in the planning
– Booking on longer term, locking just before doing
– Dynamic decisions are superior to pre-planning
– Event-driven optimisation
• Combine IT & human intuition
– Making it easy to get info and overviews
– Overruling automatic decisions
• Focus on using transportation as an offensive differentiator
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The DPS service offerings: 1
• Routing and simulation packages
• Postal transportation ERP-like solutions
• Dynamic transportation optimisation systems
• Fleet management and scheduling systems
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The DPS service offerings:
•
Creating customised component-based solutions :
– Basic components
• GIS, Geo-coding, distance- & time calculations
• GPS, Real time positioning, self-reacting control, Proof of Delivery,
parameter-estimation
– Business intelligence components
• Real-time event-driven optimisation engine
• Route optimisation algorithms
– Interfacing components
• Mobile communication
• Internet connection
• Gantt-charts as active desk-top
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Route optimisation engine
• Event-driven optimisation engine
– Events that drive optimisation:
- New orders
- New truck status
- Time goes
• Real time status known, locked resources and orders
• Permutations on most likely and acceptable changes
– Qualification control engine
• Calculating consequences of changes
– Time and cost consequences
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– Penalty calculation engine is the criteria-function
Our market position and references
• By geography
– Denmark - Scandinavia - Europe
• By industry
– Energy, Services, Postal, CIP/CPG
• By service
– Goods distribution, collection, mixed
– Field Services
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Who is DPS ?
• DPS in short facts & figures
– Started in 1975 as Peter Matthiesen A/S
– Merged with Price Waterhouse 1997, now PwC
– 45 consultants based in MCS Copenhagen
– 25 years of experience in logistics
– Focusing solely on transportation optimisation
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Short presentation of real life results:1
• Case Aalborg Portland (100 truck, cement distribution of
1,5 million tons per year)
– 7% reduction in operation costs
– No order entry deadlines and centralised planning
– Reduction in office staff from 19 to 5
– Automatic order booking and re-scheduling
– Integration to ERP system
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Short presentation of real life results:2
• Case KFK (700 truck, fodder and grain distribution of
3,5 mill. ton per year)
– +10% improved truck workload
– Improved utilisation of stocks and fodder-factories
– Higher delivery precision and flexibility
– Calm and non-stressed paper-free planning office
– Automated payment for hired trucks
– OnBoardComputing in all own + 50 hired trucks
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Short presentation of real life results:3
• Case Swedish Postal Service Used in:
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–
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Operational planning of business parcels
Collecting from mail boxes
Planning inbound and outbound
Rural mail
Express mail
• Savings (example rural mail delivery)
– 10% reduction in routing costs
– Improved vehicle utilisation
– Workload balancing
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Short presentation of real life results:4
• Case SPF (100 truck distribution of 3 mill. living pigs per year)
– 7% reduction in transportation costs
– Improved vehicle utilisation
– Improved planning according to health status
– Capability to act qualified on changes in the plan
– Disease contamination control
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So there is really value in real time
routing!
• Pay back typically in less than one year
• Together with many other improvements:
– Improved customer service and reliability
– Improved agility and flexibility
– Improved administrative routines
• And it is done in practice !
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