1 Effectively Market Your Business Using Electronic Maps Part 3. GIS in LOGISTICS University of Redlands Avijit Sarkar Tutorial supported by U.S. SBA Grant No. SBAHQ

2  Logistics  Refers to the movement of goods and materials within a facility  Includes incoming and outgoing shipments of goods and materials, and movement within a facility Logistics

3 Logistics and GIS (1)  Role of GIS in loGIStics  can help companies save on operating expenses  Routing  Scheduling  Tracking  Tracing or navigation

4 Logistics and GIS (2)  What is the best route for my delivery trucks?  How should I schedule my deliveries?  What mobile units do I have available?  What is the best way to optimize my territory?  Where is the best site for delivery hubs?  How can I optimize my fleet to meet service goals and minimize costs?

5 GIS Logistics Solutions  Geographic coverage zone(s).  Regional service approaches.  Customer locations and service agreements in place, unique equipment in place.  Customer time windows.  Work order/Job types and skill level required.  Vehicle types and special characteristics  Employee type and skill level.  Governing work rules (enterprise, union, DOT, etc.).  Time and distance inside the geographic matrix.

6 LoGIStics Application 1 Apex Office Supply  Apex Office Supply  small office supply company based in Vinton, Iowa  serves approximately 300K people in E central IA  1,500 active customers in two major cities, Waterloo and Cedar Rapids  delivery radius of approximately 50 miles  five ever-changing routes  average of 200 deliveries a day  Problems  using a GPS to track vehicles  drivers felt they were being constantly watched  data was not real time  downloaded when the trucks came back to the office.  If there was a question, such as why a driver spent more than a normal amount of time at one location, the question could not be asked until the next day, and the tone of the conversation was often confrontational.

7 LoGIStics Application 1 Apex Office Supply  Goals  Better manage people and other resources.  Deliver products on time to customers.  Load trucks more efficiently.  Support specialized delivery jobs.  Ensure safety of drivers.  Solution  Used ESRI® ArcLogistics Route  Routes deliveries overnight  Then prints invoices and driving instructions  Next morning, drivers pick up the invoices that are organized by order of delivery  Improves the efficiency of loading the trucks.  Results  Fuel cost savings: 4.3%  Labor savings: 18%  Drive-time savings: 7.4%  Managed change by gaining trust of drivers

8 LoGIStics Application 2 Major Retailer  Sears  Fleet of delivery and service vehicles  Largest home-delivery service of furniture and appliances  4 million deliveries a year of unique items  46 routing offices serving 70% of the US population  Problems  Very few same day deliveries/services  Reduced customer satisfaction  Operational costs too high

9 LoGIStics Application 2 Major Retailer  Objectives  Provide same day service  Improve customer satisfaction  Reduce operational costs  Consolidate delivery operations  Plan consistent routes  Reduce operational costs  Complex optimization problem – VRPTW  Solved in a GIS-aided logistics framework  Results  Reduced driving time by 6%  Increased the number of service orders each technician completed per day by 3%  Reduced overtime by 15%  Achieved annual savings of $9 million  Consolidate routing offices, going from 46 to 22

10 LoGIStics Application 2 Major Retailer

11 Your Business and Logistics  Do you employ logistics in your business, either directly or indirectly?  Any experience with 3PL?  After the initial discussion, do you think you can employ GIS in any domain of your business, especially logistics?

12 Web-based Logistics Solution  Web-based application specializes in the management of complex fleet logistics  Leverages a fully enabled Java/J2EE database solution.  It fits within your enterprise IT strategy  Allows you to manage a continually changing customer and operational environment  Can communicate in real time (mobile, GPS) from driver to dispatcher.

13 MapInfo ROI Calculator

14 Advantages of GIS in Logistics  Provides framework to integrate demand modeling and logistics functionality  Models are much more accurate  Network distances and travel times are based on the actual shape of the road network and a correct representation of highway interchanges  Also, with networks you can specify complex road attributes such as truck exclusions, delays at intersections, one-way streets, and construction zones  Entire modeling process is more efficient  Data preparation greatly facilitated  Database and visualization capabilities catch errors before they cause problems.

15 Supply Chain Management  Supply Chain: the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service. Sometimes referred to as value chains

16  Warehouses  Factories  Processing centers  Distribution centers  Retail outlets  Offices Facilities

17 Functions and Activities  Forecasting  Purchasing  Inventory management  Information management  Quality assurance  Scheduling  Production and delivery  Customer service

18 GIS in SCM (1)  What is my drive time from the central facility?  How long will it take me to reach delivery locations?  Which customers should be in separate service areas?  How can I track goods through my supply chain?  How can I see what is happening with my supply chain?

19 GIS in SCM (2)  GIS can be used to model supply and delivery points  GIS network tracing and analysis can then be used to optimize routes  Can create drive-time calculations from a central facility, such as a warehouse, store, or medical facility.  Service area polygons can be generated around warehouses  Determine the time it will take to reach the delivery locations  Which customers are contained in separate service area polygons

20 Questions and Takeaways  What are the nagging questions?  Write down  Key takeaway for you and your business  Specific action you can accomplish in the next week given what you learned

21 Acknowledgements  