Overview
Power Optimization addresses the below business applications.
Multi-stop dynamic route planning
These applications are characterized by truck routes that visit multiple stops and by variability in customers and customer order quantities. While firms could ignore variability in customers and customer order quantities and simply run the same fixed routes each day or week (in fact, many firms do!), transportation costs can be reduced significantly if the routes dynamically adjust or "flex" to a given set of customers and order sizes. Given a set of customers and associated order quantities, PowerOpt automatically finds the lowest cost plan while respecting all business rules and constraints. PowerOpt optimizes a variety of multi-stop route applications, including delivery routes, pickup routes, and mixed pickup and delivery routes.
Multi-stop fixed route design and ongoing tuning
These applications are characterized by truck routes that visit multiple stops, and either by customer ordering patterns or service patterns that are relatively constant or by situations where high route consistency is required even in the face of order variability. Thus the same fixed or standard routes can be run each day or period. PowerOpt is used to design the optimal set of fixed routes – then, just as importantly, PowerOpt is used on an ongoing basis to keep the fixed routes tuned (as customers are won or lost, for example). Further, PowerOpt can be used in a "hybrid" fashion combining the operational consistency of fixed routes with the cost reductions of dynamic routes. Here, certain aspects of routes are "locked" for consistency (such as key customers to certain drivers, or certain route sequences), but other rules and decisions are left open for more flexible route optimization.
Shipment consolidation and mode/carrier optimization
Firms without their own private or dedicated truck fleets must rely on various transportation firms and shipping modes (such as less-than-truckload carriers, truckload carriers, and small package carriers) to move their shipments. A key savings opportunity is consolidating less-than-truckload shipments into multi-stop truck routes. Shipment consolidation by itself is complex, but even more complicated given different carriers usually have different fees depending on shipping lanes, numbers of stops made, fuel surcharges, etc. PowerOpt automatically optimizes shipment consolidation and shipping mode, including determining the lowest cost carrier for a multi-stop route.
Full truckload continuous move optimization
These applications are characterized by full truckload legs that can be "strung together" to form attractive tours that minimize empty miles. Firms with private fleets can significantly reduce empty miles; firms shipping via truckload carriers can receive discounts by offering attractive tour combinations to carriers.
Territory and logistics network design
Classical supply chain network design projects do not model multi-stop routes, but rather roll up shipments to point-to-point "flows" of quantities. This modeling approach works well for supply chains without significant multi-stop routing. For supply chains with significant multi-stop routing, the "flow" cost estimates of multi-stop routes can be very difficult to accurately model. PowerOpt automatically evaluates the precise impact and costs of different supply chain configurations and strategies on multi-stop routes. The centralized design of PowerOpt also makes it easy to analyze and optimize multi-stop routes across multiple distribution centers or divisions.
Routing strategies and what-if analytics
Firms with truck fleets face ongoing higher-level routing questions and decisions, such as the impact of new business on existing routes, how to tradeoff customer service windows with transportation cost, the impact of driver overtime policies, etc. Traditional interactive map routing systems do not provide much help with these analyses, as each scenario must be interactively analyzed and solved, a tedious and time-consuming process. PowerOpt automatically generates high quality route plans, making routing strategy analyses practical and fast. PowerOpt also maintains a centralized data warehouse of historical orders and routes across multiple facilities or distribution centers, so histories can be automatically "played back" to evaluate the impact of different business rules or costs.