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Franz Edelman Award Franz Edelman Award for Achievement in Operations Research and the Management Sciences The purpose of the Franz Edelman competition.

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Presentation on theme: "Franz Edelman Award Franz Edelman Award for Achievement in Operations Research and the Management Sciences The purpose of the Franz Edelman competition."— Presentation transcript:

1 Franz Edelman Award Franz Edelman Award for Achievement in Operations Research and the Management Sciences The purpose of the Franz Edelman competition is to call out, recognize and reward outstanding examples of management science and operations research practice in the world

2 Recipients of Franz Edelman Award

3 YearTitleBy 2010Dalí, the Securities Settlement System (SSS) with a core operations research engine. INDEVAL, the Mexican Central Securities Depository 2009HP Transforms Product Portfolio Management with Operations Research Hewlett-Packard, USA 2008The New Dutch Timetablethe OR Revolution NETHERLANDS RAILWAYS 2007Operations Research Answers to Cancer Therapeutics MEMORIAL SLOAN- KETTERING CANCER CENTER, USA 2006Streamlining Aircraft Repair and Overhaul at Warner Robins Air Logistics Center WARNER ROBINS AIR LOGISTICS CENTER

4 YearTitleBy 2005General Motors Increases Its Production Throughput GENERAL MOTORS 2004Reinventing the Supplier Negotiation Process at Motorola Motorola Inc. 2003Perfecting the Scheduled Railroad- Model-Driven Operating Plan Development Canadian Pacific Railway 2002A New Era for Crew Recovery at Continental Airlines Continental Airlines

5 YearTitleBy 2001Analysis for Merrill Lynch Integrated Choice Merrill Lynch, Inc 2000Flexible Planning and Technology Management at Jeppesen Sanderson, Inc. Jeppesen Sanderson, Inc. 1999Extended Enterprise Supply Chain Managment at IBM Personal Systems Group and Other Divisions IBM 1998Innovative implementation of five optimization systems Bosques Arauco, S.A.

6 Indeval, the Mexican Central Securities Depository for all financial securities, manages Dalí, the Securities Settlement System (SSS) that now has as its core an operations research engine. Dalí settles securities operations that average over $250 billion daily, more than 70% of the value settled in the Mexican payments system. Thus, an amount close to the Mexican gross domestic product (GDP) is settled in five operating days. In 2005, Indeval, the Mexican Central Bank, and Instituto Technológico Autónomo de México (ITAM) began implementing Dalí, a safer, more reliable, and more efficient SSS. The two key requirements for the new system were: 1) having an SSS that can function with minimal resources, which is invaluable during financial crises when liquidity is scarce; and 2) real time settlement to meet ever-increasing demands for intraday liquidity and for better risk management tools. The core of Dalí is an operations research-based engine that is executed automatically and offers a continuous and secure operation, ensuring that settlement is irreversible. This single clearing and settlement engine incorporates a linear programming model that chooses which pending operations can be settled with the depositors available balances, maximizing the value of the transactions settled. Thanks to the model, many transactions that would remain pending if they were processed individually are settled together, thus reducing liquidity requirements dramatically by 52% in cash and 26% in securities. The most important benefit of the implementation of O.R. in Indevals SSS is the enhancement and strengthening of the Mexican financial infrastructure.

7 HP Transforms Product Portfolio Management with Operations Research OR-based solutions for product variety management that address the diverse needs of its businesses throughout their products lifecycles. Custom-built ROI calculators to evaluate each proposed new product before it is introduced. Revenue Coverage Optimization (RCO) tool is used to manage product variety after it has been introduced. By identifying a core portfolio of products, RCO enabled HP businesses to increase operational focus on the most critical products in their offerings. Using these tools, HP achieved over $500M in profit improvements across several business units since (Award of 2009)

8 The New Dutch Timetable: The OR Revolution (Award of 2008) Key Words: rail transportation; scheduling of vehicle and crew; large-scale systems; integer programming; network graphs; In December 2006, Netherlands Railways introduced a completely new timetable. Constructing a railway timetable from scratch for about 5,500 daily trains was a complex problem. To support this process, several timetables were generated using sophisticated operations research techniques. Furthermore, because rolling-stock and crew costs are principal components of the costs of a passenger railway operator, innovative operations research tools were used to devise efficient schedules for these two resources. The new resource schedules and the increased number of passengers resulted in an additional annual profit of $60 million. It is also expected that many will switch from car transport to rail transport, thus reducing the emission of greenhouse gases.

9 Operations Research Advances Cancer Therapeutics Eva K. Lee, Marco Zaider, School of Industrial and Systems Engineering and Center for Operations Research in Medicine and HealthCare, Georgia Institute of Technology Key Words: prostate cancer; brachy therapy; optimization; integer programming; treatment planning Using operations research approaches, the team has devised sophisticated optimization modeling and computational techniques for real-time (intra-operative) treatment of prostate cancer using brachy-therapy (the placement of radioactive "seeds" inside a tumor). The resulting system offers significantly safer and more reliable treatment outcomes. In addition, it eliminates the need for preoperative simulation and post-implant dosimetric analysis, resulting in savings of hundreds of millions of dollars per year in the United States alone. Post-treatment quality of life is improved through drastic reduction (up to 45–60 percent) of complications. (Award of 2007)

10 Streamlining Aircraft Repair and Overhaul at Warner Robins Air Logistics Center University of Tennessee, College of Business Administration Realization Technologies, Inc. The Warner Robins Air Logistics Center (WR-ALC) used operations research in 2005 to arrive at a radically different approach to manage the repair and overhaul activity on its C- 5 transport aircraft. WR-ALC used an OR technique called Critical Chain to reduce the number of C-5 aircraft undergoing repair and overhaul in the depot from twelve to seven in just eight months. The time required to repair and overhaul the C-5 aircraft was reduced by 33 percent. The five additional aircraft in operation have generated immediate additional revenue of $49.8 million per year. (Award of 2006)

11 General Motors Increases Its Production Throughput Department of Industrial and Manufacturing Engineering, Oregon State University General Motors Corporation (GM) initiated a long-term project to predict and improve the throughput performance of its production lines to increase productivity throughout its manufacturing operations GM quantified throughput performance and focused improvement efforts in the design and operations of its manufacturing systems through coordinated activities in three areas: –(1) it developed algorithms for estimating throughput performance, identifying bottlenecks, and optimizing buffer allocation, –(2) it installed real-time plant-floor data-collection systems to support the algorithms, and –(3) it established common processes for identifying opportunities and implementing performance improvements.. Through these activities, GM has increased revenue and saved over $2.1 billion in over 30 vehicle plants and 10 countries Key Words: manufacturing; performance/productivity; production/scheduling; (Award of 2005)

12 Reinventing the Supplier Negotiation Process at Motorola Motorola, Inc. identified a method of reducing the time and effort required to prepare for and conduct negotiations with its suppliers, simplify their coordination, and optimize contract awards across sectors, to save costs. Motorola's global procurement function selected end-to-end Internet negotiations platform. Combining innovative bidding, online supplier negotiations, and scenario-based optimization analysis, it identified the best procurement strategy while enhancing supplier relationships. Sourcing over $16 billion and saving more than $600 million, Motorola changed its supplier negotiation paradigm and moved to a truly global process. (Award of 2004)

13 Perfecting the Scheduled Railway: Model-Driven Operating Plan Development – Canadian Pacific Railway Canadian Pacific Railway has employed new decision support tools to create a scheduled railway. These decision support tools contain a variety of Operations Research approaches including an optimal block sequencing algorithm, a heuristic algorithm for block design, (very fast) simulation, and time- space network algorithms for locomotive planning and empty car distributions. This implementation has led to savings of $300 million and Improvement in Labor productivity, locomotive productivity, fuel consumption, and railcar velocity. (Award of 2003)

14 A New Era for Crew Recovery at Continental Airlines University of Texas at Austin & Continental Airlines, Texas Airlines face schedule disruptions daily because of unexpected events, including inclement weather, aircraft mechanical problems, and crew unavailability. These disruptions can cause flight delays and cancellations. As a result, crews may not be in a position to service their remaining scheduled flights. Airlines must reassign crews quickly to cover open flights and to return them to their original schedules in a cost-effective manner while honoring all government regulations, contractual obligations, and quality-of-life requirements. CALEB Technologies developed the Crew Solver decision-support system for Continental Airlines to generate globally optimal, or near optimal, crew-recovery solutions. The Crew Solver system helped it save approximately US $40 million for major disruptions only. (Award 0f 2002)

15 Pricing Analysis for Merrill Lynch Integrated Choice Electronic trading and the commoditization of trading threatened Merrill Lynch's value propositionto provide advice and guidance through a financial advisor. Management decided to offer investors more choices for doing business with Merrill Lynch. A cross-functional team evaluated alternative product and service structures and pricing and constructed models to assess individual client's behavior. The resulting Integrated Choice strategy enabled Merrill Lynch to seize the marketplace initiative, changed the financial services landscape, and mitigated the revenue risk. As of year-end 2000, client assets reached $83 billion in the new offer, net new assets to the firm totaled $22 billion, and incremental revenue reached $80 million. (Award of 2001)

16 Flexible Planning and Technology Management at Jeppesen Sanderson, Inc The world leader in the production and distribution of flight manuals, Jeppesen Sanderson couldn't keep up with rapidly growing customer demand and an ever-expanding product line. The company, which provides critical information for more than 300,000 pilots, saw its customer service begin to deteriorate in 1997 when its work volume grew to the point that it overwhelmed its production system Jeppesen responded by establishing a small operations research department to analyze the production problems and come up with solutions. The department developed a suite of optimization-based decision support tools aimed at increasing efficiency and reducing costs in every production area. By the end of 1999, Jeppesen's percentage of late orders had gone down from 35 percent to 0 percent. Simultaneously, the company realized an annual cost reduction of $3 million. Jeppesen officials now project future annual savings of $7 million attributable to the improved production scheduling (Award of 2000)

17 Extended-Enterprise Supply-Chain Management at IBM In 1994, IBM began to reengineer its global supply chain. It wanted to achieve quick responsiveness to customers with minimal inventory. To support this effort, an extended-enterprise supply- chain analysis tool was developed, called the Asset Management Tool (AMT). AMT integrates graphical process modeling, analytical performance optimization, simulation, activity-based costing, and enterprise database connectivity into a system that allows quantitative analysis of extended supply chains. IBM has used AMT to study such issues as inventory budgets, turnover objectives, customer-service targets, and new-product introductions. Implemented AMT at a number of IBM business units and their channel partners. AMT benefits include over $750 million in material costs and price-protection expenses saved in (Award of 1999)

18 Innovative implementation of five optimization systems - University of Chile Timber is Chile's second largest industry. One of the largest Chilean forestry firms, employs five different optimization systems, designed by a team from the University of Chile, at three different decision levels. The systems include ASICAM, a daily truck scheduling system; OPTICORT, a short-term harvesting system; PLANEX, a harvesting equipment and access road location optimization system; OPTIMED, a medium range planning tool; and MEDFOR, a long- term strategic planning tool The impact of these systems has been organizational and financial with reporting a total savings of $5 million a year. (Award of 1998)

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