Modeling order guidelines to improve truckload utilization

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2011.Cataloged from PDF version of thesis.Includes bibliographical references (p. 36-37).Freight vehicle capacity, whether it be road, ocean or air transport, is highly underutilized. This under-utilization presents an opportunity for companies to reduce their vehicular traffic and reduce their carbon footprint through greater supply chain integration. This thesis describes the impact of ordering guidelines on the transport efficiency of a large firm and how those guidelines and associated practices can be changed in order to gain better efficiency. To that end, we present three recommendations on improving the guidelines based on the shipment data analysis. First, we discuss the redundancy of one of the company's fill metrics based on a scatter plot analysis and a chi-square independence test. Second, we explore the impact of using linear programming to allocate SKUs to different shipment, highlighting the reduction in the number of shipments through better truck mixing. Finally, we divide the SKUs into three groups: cube-constrained, neutral, and weight-constrained. Based on this segmentation, we present a basic model that mixes different SKUs and helps a shipment to achieve a much higher utilization rate. The application of the last two findings can be further explored to address under-utilization in freight carriers across different industries.by Jaya Banik and Kyle Rinehart.M.Eng.in Logistic

Multiproduct supplye chain analysis through by simulation with kanban and EOQ system

This work reviews lean literature on the supply chain focused on the operational approach, from the lean management to the Kanban system. But, the main issue of this work is to analyze the behavior of a lean supply chain using a Kanban system managing the planning in two different ways. The difference between both is related to the production order or sequence to follow: the product with fewer inventories in stock (the most critical to run out) or the one which requires less set-up time to optimize unproductive times. The study the behavior of the supply chain, it would be done through simulation with many different scenarios: 5 different demands, each one with two coefficients of variance, 4 different batch sizes, 4 different compositions of production and process saturation and ensuring different service levels between 92% and 98%. To compare these supply chain models, an approach of the supply chain using the EOQ (Economic Order Quantity) system will be also simulated in the same conditions but with one batch size, the most economic one

Solving the nonlinear discrete transportation problem by MINLP optimization

The Nonlinear Discrete Transportation Problem (NDTP) belongs to the class of the optimization problems that are generally difficult to solve. The selection of a suitable optimization method by which a specific NDTP can be appropriately solved is frequently a critical issue in obtaining valuable results. The aim of this paper is to present the suitability of five different Mixed-Integer Nonlinear Programming (MINLP) methods, specifically for the exact optimum solution of the NDTP. The evaluated MINLP methods include the extended cutting plane method, the branch and reduce method, the augmented penalty/outer-approximation/equality-relaxation method, the branch and cut method, and the simple branch and bound method. The MINLP methods were tested on a set of NDTPs from the literature. The gained solutions were compared and a correlative evaluation of the considered MINLP methods is shown to demonstrate their suitability for solving the NDTPs. First published online: 16 Oct 201

Reaching Cost Visibility Into Subsidiary Distribution

Foreign subsidiaries are business units within multinational companies operating under control of parent organizations. Subsidiaries possess distinct arrays of information that oftentimes happen to be out of the parent’s reach. Visibility into subsidiary operations is nowadays becoming more of a need than a luxury. Distribution, representing activities needed to deliver finished products from the end of production to customers, as well as the costs related to distribution are among the many areas of subsidiary’s business operations that oftentimes are not thoroughly visible to the parent organization. This study is based on the assignment of the case company and the objective is to develop a tool for parent organization that would enable cost visibility into distribution of its foreign subsidiary. The objective is achieved by creation of the subsidiary distribution cost database, the use of which provides valuable cost information on subsidiary’s distribution and, consequently, facilitates the attainment of cost visibility into subsidiary distribution. In order to address the problem, based on the reviewed literature, certain conceptual framework is developed and applied to a real case. In terms of research methodology, this study utilizes the research of empirical type with the purpose of theory and application. Moreover, case study research strategy is followed and such data generation methods as the use of existing materials, interviewing and action science are exploited. In the result of this study, the case company receives a valuable tool eliminating uncertainty of subsidiary’s distribution as well as providing traceability of subsidiary’s transportation costs. Case company reinforces its parental control and enriches the ability to evaluate subsidiary’s performance taking into account the actual costs of transportation. The study provides the basis for cost-efficient adjustment of subsidiary’s distribution strategy as well as optimization of related business processes

Attitudes et intention d'adoption par l'industrie du camionnage

Ce projet de recherche présente les résultats d'une étude qualitative explorant la possible relation entre la distance temporelle perçue et l'intention d'adoption du camion à l'hydrogène, du camion électrique et du camion autonome par les parties prenantes de l'industrie du camionnage canadienne. Le camion à l'hydrogène et le camion électrique se présentent comme alternative aux carburants fossiles pour l'industrie du camionnage tandis que le camion autonome pourrait être une solution à la pénurie de main-d'œuvre. Les facteurs explorés furent la distance temporelle, la résistance aux changements du PDG ou de l'équipe de direction, l'attitude envers les solutions de remplacement proposées et le type de transport effectué ou consommé. Afin de collecter les données, une entrevue individuelle semi-dirigée d'environ une heure fut réalisée auprès de 31 experts de l'industrie du camionnage. La perception de la distance temporelle (élevée vs faible) a semblé être positivement liée à l'intention d'adoption pour le camion électrique ainsi que le camion autonome. Dans le cas du camion à l'hydrogène, la possible relation ne put être explorée dû à un manque de connaissance de la part des répondants.This research project presents the results of a qualitative study exploring the possible relationship between perceived temporal distance and the intention to adopt the hydrogen truck, the electric truck and autonomous truck by stakeholders of the Canadian trucking industry. The hydrogen truck and the electric truck are presented as an alternative to fossil fuels for the trucking industry while the autonomous truck could be a solution to the labour shortage. Factors explored were temporal distance, CEO or management team resistance to change, attitude toward the proposed alternatives and the type of transport performed or consumed. In order to collect the data, an individual semi-structured interview lasting approximately one hour was conducted with 31 trucking industry experts. The perception of temporal distance (high vs. low) seemed to be positively related to the intention to adopt for the electric truck as well as the autonomous truck. In the case of the hydrogen truck, the possible relationship could not be explored due to a lack of knowledge on the part of the respondents

A Genetic Approach for Freight Transportation Planning

Purpose – This purpose of this paper is to present a methodology for optimally planning long-haul road transport activities through proper aggregation of customer orders in separate full-truckload or less-than-truckload shipments in order to minimize total transportation costs. Design/methodology/approach – The model is applied to a specific Italian multi-plant firm operating in the plastic film for packaging sector. The method, given the order quantities to be shipped and the location of customers, aggregates shipments in subgroups of compatible orders resorting to a heuristic procedure and successively consolidates them in optimized full truck load and less than truck load shipments resorting to a Genetic Algorithm in order to minimize total shipping costs respecting delivery due dates and proper geographical and truck capacity constraints. Findings – The paper demonstrates that evolutionary computation techniques may be effective in tactical planning of transportation activities. The model shows that substantial savings on overall transportation cost may be achieved adopting the proposed methodology in a real life scenario. Research limitations/implications – The main limitation of this optimisation methodology is that an heuristic procedure is utilized instead of an enumerative approach in order to at first aggregate shipments in compatible sets before the optimisation algorithm carries out the assignments of customer orders to separate truckloads. Even if this implies that the solution could be sub-optimal, it has demonstrated a very satisfactory performance and enables the problem to become manageable in real life settings. Practical implications – The proposed methodology enables to rapidly choose if a customer order should be shipped via a FTL or a LTL transport and performs the aggregation of different orders in separate shipments in order to minimize total transportation costs. As a consequence, the task of logistics managers is greatly simplified and consistently better performances respect manual planning can be obtained. Originality/value – The described methodology is original in both the kind of approach adopted to solve the problem of optimising orders shipping in long-haul direct shipping distribution logistics, and in the solution technique adopted which integrates heuristic algorithm and an original formulation of a GA optimisation problem. Moreover, the methodology solves both the truckload assignment problem and the choice of LTL vs FTL shipment thus representing an useful tool for logistics managers