i2 U

Intelligent Supply Chain Management Course

Module Thirteen:Module Thirteen:Transportation SchedulingTransportation Scheduling

2© 2001 i2 Technologies Inc CONFIDENTIAL

Supply Chain Management Key Processes

Sales & Operations Planning

Demand Planning

Inventory Planning

Supplier Scheduling

Production Scheduling

Inventory Deployment

Transportation Scheduling

Demand Fulfillment

Supply Chain Execution Monitoring

Strategic Supply Chain

Planning

Master Supply Planning

Procurement

Production Distribution

Transportation

Impact of decisions

_

+N

umbe

r of d

ecis

ions

+

_

Spec

ifici

ties

by in

dust

ries Length of Planning horizon

Fu

lly

Inte

gra

ted

to

p-d

ow

n d

irec

tio

ns

Fu

lly

Inte

gra

ted

bo

tto

m-u

p f

eed

bac

k

Reaction to changing supply conditions

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After Completing This Module,You are Expected to:

Define the key objectives of the Transportation Scheduling process

Understand the typical limitations of the Transportation Scheduling process

Understand the optimization logic embedded in solvers used to optimize the Transportation Scheduling process

Understand the “Dynamic Merge in Transit” process and its criticality to support eBusiness activities

Identify Transportation Scheduling key enablers and their resulting business value

Identify Transportation Scheduling excellence criteria

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Transportation Scheduling Process Positioning

hou

rs

days

wee

ks

mon

ths

year

+

buy

make

move

sell

store

operational tactical strategicscheduling

demandfulfillment

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Transportation Scheduling Objectives

Substitute estimated transportation lead times with ‘up-to-the-minute’ lead times for a fully valid transportation plan

Minimize transportation costs by building optimal loads and selecting adequate transportation means

Transmission of detailed transportation plans to carriers

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Typical Limitations in Transportation Scheduling

SUPPLIERS

PLANT

DCs

CUSTOMERS VMICUSTOMER

Incoming goods purchased CIF - no

search of combination with

internal and outbound

transportation

Fragmented transportation

scheduling

Empirical “optimization”

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Transportation Scheduling Optimization

SUPPLIERS

PLANT

DCs

CUSTOMERS VMICUSTOMER

Considering… Carrier

selection Mode selection Hub selection Routing Backhauling Deadheads

Minimization of total

transportation cost by

increasing transportation

space utilization and reducing total mileage

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Strategies Total cost % red. Total mileage Duration

Typical set o

f stra

tegies that a

solver uses

to minim

ize tr

ansportatio

n costs

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Loads generated by the solve

Detailed shipments by loads

Output of a Transportation Scheduling Solver: Consolidated Loads

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Output of a Transportation Scheduling Solver: Graphical Visualization of Selected Lanes

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Load Physical Configuration for Maximum Transportation Space Utilization

Product CasesPallets

Trucks and Trains

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Transportation Scheduling:Key Enablers and Related Business Benefits

Global and accurate consideration of transportation needs

Blend of LP / MILP solvers

Full integration with other Supply Chain Management processes

Transportation costs

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Business Environments Where Detailed Transportation Scheduling is Critical

High volumes

Small shipment sizes

Use of 3rd party carriers

As well-suited for management by manufacturers (shippers) as it is by Third Party Logistics (3PL) providers

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An Increasingly Critical Capability in the e-Business World: Dynamic Merge in Transit

A customer orders through the PC company web

storefront several products supplied from different locations and actually

different suppliers (cross selling)

1

Company web

server

PC manufacturer

Printer manufacturer (same company, other

division)

Office furniture manufacturer (ext supplier)

The order is automatically

dispatched to all supply sources

2

Suppliers provide their

promises back3

Consolidation of incoming flows at a location dynamically selected to minimize transportation costs

4

Customer

Unique delivery to

the customer5

15© 2001 i2 Technologies Inc CONFIDENTIAL

Transportation Scheduling ProcessExcellence Criteria

The use of an adequate optimization solver enables to minimize transportation costs by consolidating shipments into loads that minimize the total mileage and the usage of transportation space.

The solver considers ALL transportation needs.

The solver uses real carriers rates and routes, and considers all detailed transportation constraints.

The solver dynamically selects cross docking locations and activities.

The solver enables dynamic merge-in-transit to ensure one single delivery to the customer while minimizing transportation costs.

The sequence of optimization strategies is regularly fine tuned by performing what if analysis.