Transportation Optimization

In supply chain network design, when we assign cost to transportation activities in network optimization, we typically do not have visibility into efficiencies in the network that result from combining inbound or outbound shipments. We tend to think of transportation flows as one-to-one relationships between an origin and a destination. In business practice, however, we aim to consolidate shipments through vehicle routing to minimize mileage and, as a result, save transportation cost.

Transportation Optimization provides a method for extending network design to address vehicle routing problems requiring detailed transportation representation. Generically, a vehicle routing problem (VRP) can refer to a number of similar but unique transportation problems involving consolidation of shipments into multi-stop routes. Using Transportation Optimization, you can resolve these types of problems.

For example, given distinct customer demands for several Tennessee locations, we would prefer to send a single vehicle from Atlanta to all customers rather than dispatch individual trucks.

Transportation Optimization extends our “straight-line” thinking in network optimization to more of a “flower petal” approach that is more realistic for many situations. So, instead of the individual shipments:

Transportation Optimization provides the actual route that a single vehicle can serve:

Topics associated with Transportation Optimization include:

• Vehicle routing business cases
• Transportation Optimization options
• Transportation Optimization data on maps