Three principles of transportation optimization


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Three principles of transportation optimization

  1. 1.  
  2. 2.  Demand for advanced transportation management systems is on the rise With mounting pressure on businesses to contain costs, address capacity constraints, lower their carbon footprints and streamline movements, a flexible, agile and functionally rich transportation management system can help support their service goals.
  3. 3.  Pinpointing the optimal solution is challenging and complex. One factor adding confusion to the search is the manner in which vendors use — or overuse —the term optimization. Optimization techniques are proven to drive the vast majority of the business value realized from the use of transportation management solutions.
  4. 4.  However, not all optimization strategies are created equal and that’s where the confusion lies. Vendors too often take a simplified approach and focus on just one function to optimize, which can lead to more harm than good. A comprehensive approach takes many factors into consideration.
  5. 5. 1. One size does not fit all.2. The details matter.3. Concurrency is king.
  6. 6.  For the best possible answer in the shortest amount of time, companies must apply both heuristic (experience based) and deterministic approaches that use a series of logical and common-sense decisions along with network constraint considerations. Transportation management systems should offer a flexible configuration that adapts to each company’s unique strategies, as well as network constraints and variables.
  7. 7.  Companies that follow optimization best practices constantly monitor and tune their strategies to address any changes in their network, supply chain, market and customer demands. Capacity, for example, tends to ebb and flow with economic changes, and shippers must be prepared to adapt their strategies to capitalize on market opportunities.
  8. 8.  Intertwining planning and execution processes makes transportation functions unique among other supply chain. It is critical that all of the details − from network and dock scheduling to asset capacity and granularly defined rates− are expertly modeled. Ensuring accuracy and visibility into all of the details also confirms that a company is not missing out on opportunities to get the same results at lower overall costs.
  9. 9.  A company must also have visibility into the details of the load that it is moving. Rather than making assumptions that can lead to added costs and stoppages, the company needs containerization capabilities to model the load at a finer level of granularity.
  10. 10.  Shippers must rely on an optimization engine that considers all elements of the problem – strategies, details and levels of granularity – at the same time in order to produce the best answer. A best-practices transportation management system can consider all aspects of the problem concurrently including rating, routing, scheduling and capacity constraints.
  11. 11.  Throughout the process of constantly adjusting and incrementally optimizing the orders to be executed, shippers must have visibility across time into already executed orders. This enables them to continually refine any network constraints or carrier commitments. It also ensures that they have the required resources to realize their service goals as efficiently and effectively as possible.
  12. 12.  Ambev is a leading Latin American brewer and PepsiCo International, Inc.’s bottler outside of the United States. Ambev and its subsidiaries produce, distribute and sell beer, carbonated soft drinks and other non-alcoholic and non-carbonated products in 14 countries.
  13. 13.  Ambev experienced a significant spike in order volume across its operating regions, and began to search for better transportation solution that could handle increasingly complex demands. In addition to cost and efficiency concerns, Ambev also needed to ensure that customer service levels kept pace with increasing demand.
  14. 14.  Ambev sought to improve asset utilization and processes while positioning itself for continued future growth. Ambev decided to replace its legacy systems with industry-leading transportation and logistics management technology to better plan and manage its transportation network.
  15. 15.  BENEFITS: o 100 percent return on investment in less than 12 months o Improved network-wide visibility o Increased asset utilization o Enhanced dock scheduling, resulting in reduced dock congestion o Improved customer service while decreasing costs o Better overall transportation efficiency and performance
  16. 16.  JDA Software offers its list of top 10 optimization capabilities to more effectively contain costs, reduce miles and increase utilization: