Transportation Synergies ISyE 6203 Project By: - Prashant Sundaram Umang Raijiwala Kunal Pande Puneet Goyal Nishant Jain

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Company Background 2 Maker of Vertical Transport Systems Elevators & Escalators Moving walkways Maker of Air Compressors & Compressed Air Systems.

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Outline 3 Objective Scenario analysis Potential opportunities Results Methodology Recommendation Future scope Questions

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Objective – Combine networks of OTIS and SULLAIR 4 Determine if Otis’ transportation network is suitable to support SULLAIR volumes Long haul Short haul FOCUS – 3 day(+1/-1) window 5 day(+3/-1) window 9 day(+6/-2) window Combine shipments from/to 4 RDC’s for OTIS and SULLAIR shipments from Michigan City

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. 5 OTIS- SULLAIR OPPORTUNITY 1: Consolidate shipments of SULLAIR on OTIS trucks leaving from Woodridge, IL riding Outbound to the 3 RDC’s & Nogales, MX

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. 6 MANITOBA MICHIGAN/ON NEW YORK OPPORTUNITY 2: OTIS trucks picking SULLAIR shipments riding Inbound to Woodridge, IL & dropping off in Michigan City, IN MICHIGAN CITY OTIS- SULLAIR

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Current Scenario – Individual TL and LTL shipments are being transported 7 FICTITIOUS FIGURES After increasing scope (IL/IN) 80% INCREASE Transportation Budget OTIS($) Total Budget15M OB Shipments from Woodridge0.5M IB Shipments to Woodridge0.9M SULLAIR OB Shipments from Michigan City0.6M IB Shipments to Michigan City0.4M Transportation Budget OTIS($) Total Budget15M OB Shipments from IN/IL0.9M IB Shipments to IN/IL1.3M SULLAIR OB Shipments from Michigan City0.6M IB Shipments to Michigan City0.4M

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. NEW OPPORTUNITIES 8 OPPORTUNITY 1: Consolidate shipments of SULLAIR on OTIS trucks leaving from IN/IL riding Outbound to the 3 RDC’s & Nogales, MX OPPORTUNITY 2: OTIS trucks picking SULLAIR shipments riding Inbound to IN/ IL & dropping off in Michigan City, IN But…. Scope restricted Not enough synergy opportunities So we… Increased the scope by considering shipments originating from IN/IL in OPPORTUNITY 1 (OB) & destination states to IN/IL in Opportunity 2 (IB) Now… Increased scope by 80% Potential savings could go up by 5-10 % of Total transportation costs

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Data Filtering – Before Analysis (Irrelevant data is removed) 9 OTIS 3 quarters data + Origins and destinations US and Canada + Truck current weight = [10,25000] lbs (because Sullair = [5,10000] lbs) - Trucks below 50 lbs - Expedited/Just-in-time deliveries SULLAIR + Origins and destinations US and Canada - Shipments with origins outside Michigan City - Destination ≠ Michigan city - Shipment weight = 0/1 lbs - Freight Charges < $100

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Analysis Results - % values of SAVINGS 10 OUTBOUND (As % of total OTIS- SULLAIR IB shipments from IL/IN) INBOUND (As % of total OTIS- SULLAIR IB shipments to IL/IN)

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Scenario 1 – Linehaul shipments from IN/IL to the 4 RDC’s 11 OTIS : 5 th Feb shipment from Lombard, IL to Dallas, TX Shipment weight 200 lbs SULLAIR: 3 shipments 5 th Feb : Michigan City to Humble, TX (210 lbs) 5 th Feb : Michigan City to Denison, TX (810 lbs) 6 th Feb : Michigan City to Denison, TX (2100 lb) Possible Synergies - ? Yes

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Division into Zones 12

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. e.g. 5 day Window OTIS Ship Date + Travel Time -1 <= SULLAIR Ship Date <= OTIS Ship Date + Travel Time +3 SULLAIR destinations <~ 250 miles to 3 RDCs & Nogales, AZ Multiple SULLAIR LTL shipments combined with single OTIS LTL Shipment 13

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Data Filtering – During Analysis Integrity Check: Freight weight (OTIS+SULLAIR) ≤ 35,000 lbs SULLAIR Ship Date=OTIS Ship Date[+1,-1], [+3,-1],[+6,-2] Preference to min. distance to SULLAIR pick-up E.g.- OTIS shipments from VA should not pick up SULLAIR shipments in NC Integrity Check that multiple SULLAIR shipments on OTIS < lbs SULLAIR freight worth more than $100 14

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Scenario 2 – Shipments originating from US, Canada, Mexico to IN & IL 15 OTIS Shipment – Supplier in Battleboro,NC Shipping to Woodridge,IL On 3 rd February SULLAIR Shipment – 3 suppliers in Fayette, NC Black Mountain, NC & Mebane, NC to Michigan City, IN on 3 rd & 4 th Feb Distance between Battleboro & SULLAIR Suppliers~60-90miles Possible Synergies ?? Maybe

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Division into Zones 16

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. Referencing OTIS & SULLAIR shipments for Inbound Shipments to IL/IN 17 Key Points: SHIPPER STATE: Origin State(NC) – 1 to Destination State(IN) – 4 states on the way -3 (KY),2 (VA) Eg. : OTIS shipments from VA(2) should not pick up SULLAIR shipments in NC(3) SULAIR shipments have REFERENCES to unique OTIS shipments which can pick them TRAVEL TIME taken into consideration. All Locations Geo Coded

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. COST CALCULATIONS FOR IB 18 The Next Logical Question… ASSUMPTIONS MADE: Stoppage charges on a ROUTE: $50 Rates of TL’s & LTL’s on basis of $/mile: $1/mile Distance between 2 places on basis of: ACOS(COS(RADIANS(90-Lat1)) *COS(RADIANS(90-Lat2)) +SIN(RADIANS(90-Lat1)) *SIN(RADIANS(90-Lat2)) *COS(RADIANS(Long1-Long2))) *3959 COST CALCULATIONS: Old Cost: = Freight Charges paid by OTIS + SULLAIR New Cost: = [Miles driven by OTIS truck to pick up SULLAIR shipment*$1] + [Old freight charge of OTIS shipment to destination or Miles driven from OTIS Origin to Destination * $1 (whichever is lesser)]+ [Miles driven from SULLAIR destination – OTIS destination * $1] Savings: = Old Cost – New Cost Discarded Routes which had potential losses

Disclaimer: This document has been created in the framework of a student project and the Georgia Institute of Technology does not sanction its content. RECOMMENDATIONS 19 Incorporate real time information from both companies Club supplier shipments going to the RDCs/job site from IN/IL with SULLAIR Shipments Increase flexibility of SULLAIR delivery method Use 3 day windows for optimal savings OutboundInbound

Thank you! Questions and comments. 20