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Transcript of Routing and Scheduling Section Five. Load Planning u Mode of Transportation u Cargo Characteristics...
Load Planning
Mode of Transportation Cargo Characteristics Facility Constraints Business Strategy Security and Safety Considerations
CARGO CHARACTERISTICS
SIZE WEIGHT STOWABILITY HANDLING LIABILITY HAZARDOUS CARGO SPECIAL SERVICE REQUIREMENTS
Collaborative Transportation:Collaborative Transportation:The “Missing Link” of CPFRThe “Missing Link” of CPFR
Collaborative Transportation:Collaborative Transportation:The “Missing Link” of CPFRThe “Missing Link” of CPFR
Joel SutherlandSenior Vice President, Transplace
VICS CPFR® MeetingFebruary 7, 2003
$571 B Transportation by Mode
Truck Transportation = $462 B (Truck Transportation = $462 B (81%) Truck Transportation = $462 B (Truck Transportation = $462 B (81%)
Source: Bear Stearns, The Whole Trucking Story,
Cass/ProLogis, 14th Annual State of Logistics Report
6%
25%
2%
5% 6% 7% 21%
28%
For-Hire TLIn-House TLLTLLocal TruckingGround ParcelParcel ExpressRailOther
© Copyright 2003 Transplace, LP. All rights reserved.
Shipper/Carrier Challenges
Shipper
No single shipper has critical mass Logistics technology not a core competency Business is still managed in silos Lack of pipeline visibility Total logistics costs are too high
No single shipper has critical mass Logistics technology not a core competency Business is still managed in silos Lack of pipeline visibility Total logistics costs are too high
Carrier
No single carrier has critical mass High driver turnover Costly deadhead miles Excessive dwell time
No single carrier has critical mass High driver turnover Costly deadhead miles Excessive dwell time
There are nearly 600,000 active interstate motor carriers
Fragmented Industry
Source: http://www.bts.gov/publications/nts/html/table_01_02.html
CCCC
592,909592,909
J. B. Hunt
Swift
Werner
U. S. Xpress
Covenent
All Other
J. B. Hunt
Swift
Werner
U. S. Xpress
Covenent
All Other
Less than 5%Less than 5%
Source: Bear Stearns, The Whole Trucking Story
Out of more than 10,000 publicly traded truckload carriers
Driver TurnoverDriver
Turnover
Mode Turnover Conditions
TL 100% Away from home for
long periods of time
LTL 10% Home more often
Local 5% Home every day
Source: Dr. G.D. Taylor, University of Louisville
© Copyright 2003 Transplace, LP. All rights reserved.
Costly Deadhead Miles
Empty miles in Europe run 25% to 40%Empty miles in Europe run 25% to 40%
15-20%
Waiting (Dwell) Time Abuse
The average waiting time
for (dry van carrier) drivers was
33.5 hours per week.
The average waiting time
for (dry van carrier) drivers was
33.5 hours per week.
Source: TCA, Dry Van Drivers Survey, 1999 © Copyright 2003 Transplace, LP. All rights reserved.
Trends in U.S. Trucking Industry
Shippers using fewer, larger (core) carriers In-House TL shrinking; For-Hire TL growing Consolidation within TL segment is increasing LTL declining; TL increasing (mode conversion) Connectivity and visibility enabling collaboration
Source: Bear Stearns,
The Whole Trucking Story© Copyright 2003 Transplace, LP.
All rights reserved.
Source: VICS Association Source: VICS CPFR
• Consumer Micro-Marketing
• Joint Business Planning
• New Item/Promotion Management
• Detailed Demand Forecasting • Supply Chain Process and Systems Integration
• Supply Chain Optimization
• Product Planning and Scheduling
Demand
Supply
A business process for value chain partners to coordinate plans in order to reduce the variance between supply and demand and share
the benefits of a more efficient and effective supply chain.
A business process for value chain partners to coordinate plans in order to reduce the variance between supply and demand and share
the benefits of a more efficient and effective supply chain.
CPFR® is all about Integrating
Demand with Supply
© Copyright 2003 Transplace, LP. All rights reserved.
Source: VICS Association
The Penalty of Working Alone
Supplier30 days
Supplier30 days
Manufacturer30 days raw materials
30 days finished product
Manufacturer30 days raw materials
30 days finished product
Customer30 days whse21 days store
Customer30 days whse21 days store
141 days
Supplier15 days
Supplier15 days
Manufacturer15 days
raw materials15 days
finished goods
Manufacturer15 days
raw materials15 days
finished goods
Customer15 days whse6 days store
Customer15 days whse6 days store
66 days
© Copyright 2003 Transplace, LP. All rights reserved.
An independent yet concurrent process with CPFRAn independent yet concurrent process with CPFR Begins at order confirmation, continues through Begins at order confirmation, continues through
shipment delivery, and includes carrier payment shipment delivery, and includes carrier payment Requires Requires reengineeringreengineering the whole process so the carrier the whole process so the carrier
is part of the larger, more focused, buyer/seller teamis part of the larger, more focused, buyer/seller team
An independent yet concurrent process with CPFRAn independent yet concurrent process with CPFR Begins at order confirmation, continues through Begins at order confirmation, continues through
shipment delivery, and includes carrier payment shipment delivery, and includes carrier payment Requires Requires reengineeringreengineering the whole process so the carrier the whole process so the carrier
is part of the larger, more focused, buyer/seller teamis part of the larger, more focused, buyer/seller team
Source: VICS Association
What is CTM?
Strategic PlanningStrategic PlanningSuppliersSuppliers
CustomersCustomersCarriersCarriers
Strategic PlanningStrategic PlanningSuppliersSuppliers
CustomersCustomersCarriersCarriers CTMCTM
CPFRCPFRCPFRCPFR
Time in Business CycleTime in Business CycleTime in Business CycleTime in Business Cycle
© Copyright 2003 Transplace, LP. All rights reserved.
Source: CPFR/CTM
Two ways to Achieve CTM Benefits
1. Direct communication between carriers and trading partners
Source: Williams and Esper, University of Arkansas, 2002John Karolefsky, Collaborating Across the Supply Chain, 2001
BuyerBuyer SellerSeller
CarrierCarrier
3PL3PL
2. 3PL facilitation of the communication and execution process
© Copyright 2003 Transplace, LP. All rights reserved.
The Planning Process
Execution
Value is greater when the time buckets are larger
Shipmentand Carrier Management
Transportation Modeling
SupplyChain
Strategy/NetworkDesign
TransportationProcurement
Fleet Routing& Scheduling
ROAImpact
Years Quarters…….Months Days
Strategic Tactical Operational
Source: CPFR/CTM
Level of Collaboration
Traditional Vendor
Transactional No visibility
Trading Partner
Collaboration Shared Forecast by
Lane of Traffic Automated transactions
PartnershipCollaboration Shipper,
Consignee, and Carrier
Shared Forecast Committed
capacity• Visibility
ConsortiumCollaboration Multiple Shippers,
Carriers Third Party
Information Hub Collaboration
Services Relationship
Management
Value
CTM Continuum
Source: CPFR/CTM
MetricMetric ExampleExample
Reduced transportation costs Eliminate excessive empty backhauls and dwell time
Increased asset utilization Reduced empty miles that are unpaid to the carrier
Improved service levels Higher on-time performance
Increased visibility Identifying location of freight in the supply chain
Improved end-customer satisfaction Increased number of “perfect orders”
Increased revenues Improved fully load miles; better on shelf performance; increased order quantity
Potential CTM Benefits
Source: John Karolefsky, Collaborating Across the Supply Chain, 2001
© Copyright 2003 Transplace, LP. All rights reserved.
Results
Before ReengineeringBefore Reengineering
• Vendors Controlled Freight • 77% of Vendors Converted to Collect
• 85% LTL Inbound Shipments • <2% LTL Inbound Shipments
• 1 Week Average Transit Time • 1.5 days Average Transit Time
• No Pipeline Visibility • Complete Pipeline Visibility
• Excessive Freight Damage • Freight Damage Nearly Eliminated
• High Transportation Cost • >20% Transportation Cost Reduction
• Growth Constrained • Significant Inventory Reduction
• Poor On-Time Performance • 99%+ On-Time Performance
• Poor Utilization of Private Fleet • 25% Increase in Private Fleet Utilization
After ReengineeringAfter Reengineering
© Copyright 2003 Transplace, LP. All rights reserved.