1. Transportation Guru Vehicle Route Optimization

2. We enable companies to:
LLamasoft Overview
We are:
The global leader in supply chain design technology & solution services
Focused 100% on supply chain modeling & scenario analysis
Headquartered in Ann Arbor, MI with support centers around the world
We enable companies to:
Optimize their end-to-end supply chain operations
Reduce corporate risk and identify major cost savings
Perform continuous what-if analysis

3. Automotive / Industrial Manufacturing
Sample Customers
Automotive / Industrial Manufacturing
Consumer Goods
Defense
Hi-Tech / Electronics
Food
Beverage
Life Sciences
Grocery
Logistics
Apparel
Manufacturing
Petroleum
Public Health
Retail
Chemical

4. Technology

5. Supply Chain Guru A Complete Supply Chain Design Platform
An Intuitive User Interface for complete control of Supply Chain Modeling and Design Activity
A Supply Chain Intelligence Database with reference data, and pre-configured data connectors
A Design Engine containing multiple integrated solvers, operations research algorithms, and simulation engines
Network Optimization
Vehicle Route Optimization
Inventory Optimization
Enterprise Simulation

6. Four Components of a Comprehensive Design Solution
Network Validation
Customer Service
Operational Metrics
Safety Stock
Service vs. Inventory
Replenishment Frequency
Inventory
Optimization
Simulation
Network
Optimization
Vehicle Route Optimization
Optimal Transportation Routes
Inbound shipment consolidation
Outbound shipment consolidation
Facility Locations
Customer Assignments
Mode Selection

7. Transportation Guru Creating Multi-Stop Vehicle Routes
Vehicle route optimization (VRO) that creates multi-stop vehicle routes
Uses optimization to design routes for:
Inbound Consolidation
Outbound Consolidation
Periodic Shipment Balancing
Continuous Moves Backhaul
Continuous Moves Interleaved Shipments*
Asset Planning*
Fully integrated within Supply Chain Guru
Transportation Optimization
Determine optimal multi-stop routes using detailed cost models
-Inbound Consolidation: Consolidation of goods from multiple suppliers to warehouse
-Outbound Consolidation: Consolidation of deliveries from distribution centers to retail stores
-Periodic Shipment Balancing: Regular balanced deliveries across a fixed weekly schedule
-Continuous Moves Backhaul: Take advantage of empty miles by optimizing pickups after last delivery is made on outbound route
-Continuous Moves Interleaved Shipments: Interleaved pick-ups and drop-offs within cohesive routes
-Asset Planning: Balance optimizing fleet size while finding good routes
* Coming soon!

8. Network Optimization vs. Vehicle Route Optimization
Determine optimal multi-stop routes using detailed cost models
Network Optimization
Uses point-to-point lanes and simplified cost models

9. Network Optimization vs. Vehicle Route Optimization
Design supply chain network using point-to-point lanes and simplified cost models
Vehicle Route Optimization
Determine optimal routes for inbound and outbound shipment consolidation

10. Mission of Transportation Guru
Technically sound vehicle routing program
Extensive what-if scenario capabilities
Extension of network design into much needed analyses within the same model structure
Single software platform integrating multiple components of network and transportation system design
What it is
A Transportation Management System (TMS)
What it is not

11. Transportation Design Questions
How should I consolidate shipments to build multi-stop routes?
Should we ship direct from the vendor or go through the DC?
How much savings will I see if I optimize my baseline existing routes?
Are there backhaul opportunities?
How do my routes change with low, average, and high volume shipment levels throughout the year?
Are there network synergies? Opportunities to consolidate transportation systems among business units?
How do route costs compare to LTL and parcel costs?
Should we consider a 3PL in addition to our private fleet?
How do I balance my shipments across a weekly schedule?
What is my allocated route cost by shipment?
How do I balance my facility costs versus transportation costs?
How do I balance my drivers workloads?

12. Transportation Guru Data Flows
Inputs (Required)
Outputs
Route Summary
Sites
Stop Details
Shipments
Vehicle
Route
Planning
Delivered Shipments
Transportation Assets
Segments
Asset Availability
Invalid Shipments
Rate
Unroutable Shipments
Inputs (Optional)
Business Hours
Transit Override
Relationship Constraints
* Valid Schedules
* Periodic VRP Only

13. Example VRP Parameters and Constraints
Shipments
Delivery and pickup time windows
Priority
Fixed and variable loading/unloading time
Business hours
Road distance & transit time calculations via PC*Miler, ESRI, Bing
Assets
Capacity: Weight, Cube, Units
Second compartment capacity
DOT Hours of Service
Max stops, distance, time, waiting time per route
Max distance between stops
Round trip or one-way
Rates
Per distance, stop charges, fuel surcharges, min charge, discounts, driver hourly, service unit cost
Step functions: banded mileage, first stop free
Location based rates: origin, last destination, farthest destination
Compare LTL/Parcel rates – SMC3 RateWare XL, FedEx, UPS integration
Relationship Constraints
Prevent products from shipping together
Force products on certain assets
Prevent assets at certain locations
Prevent certain shipments being combined
Force certain assets with lift gate to locations

14. Transportation Guru Software Demonstration

15. Algorithm Overviews

16. Standard Inbound or Outbound
Consolidation of pickups or deliveries for multiple suppliers or customers into cohesive routes
What can the Standard VRP solve?
Identify shipment consolidation opportunities to reduce transportation costs by creating multi-stop vehicle routes
What are the benefits?
Utilizing Standard VRP Optimization There are many ways to apply standard VRP optimization technology. Here are just a few examples:
Instead of running LTL lanes, multi-stop vehicle routes can be run to reduce overall costs
Optimize existing baseline routes to identify better shipment consolidation and route sequences
Create high, average, and low volume routes to address seasonality shipment volume shifts
Adjust transportation constraints to identify how route structure changes
Determine how Department of Transportation (DOT) regulation changes affect route structure

17. Periodic Vehicle Route Optimization
Scheduling optimization on top of standard VRP to identify how frequent and when to deliver or pickup on multi-stop routes
What can the Periodic VRP solve?
Determine schedule for multi-stop vehicle routes to minimize costs while adhering to scheduling requirements
What are the benefits?
Utilizing Periodic VRP Optimization There are many ways to apply periodic VRP optimization technology. Here are just a few examples:
Identify frequency of deliveries or pickups balancing contract requirements and transportation costs
Determine delivery or pickup schedule for all locations while considering transportation system constraints
Balance shipment schedule throughout the week

18. Continuous Moves Backhaul Optimization
Identify the most efficient inbound pick-ups following the last delivery of an outbound route
What can the Backhaul VRP solve?
Reduce the overall drive time required and generate significant cost savings
What are the benefits?
Utilizing Backhaul Optimization There are many ways to apply backhaul optimization technology. Here are just a few examples:
Retailers can pick-up returns from stores following deliveries and bring them back to the DC
Following deliveries to retail stores, trucks can pick up materials from suppliers and bring to warehouse
3PL or carriers can make deliveries and then fulfill pick-up requests on the way back
Direct store delivery trucks can pick up empties or expired goods following store deliveries

19. Continuous Moves Interleaved Shipments Optimization
Interleaved pick-ups and drop-offs within cohesive routes
What can the Continuous Moves Interleaved VRP solve?
Create multi-stop routes that include pickups and deliveries interleaved throughout route to minimize costs
What are the benefits?
Utilizing Continuous Moves Interleaved VRP Optimization There are many ways to apply Interleaved VRP optimization technology. Here are just a few examples:
Retailers can create routes that move product between stores
Warehouses can transition inventory to other facilities with inter-facility routes
New product and returns can be considered on one route
3PL’s can consider delivery and pickup requests during a single route

20. Asset Planning Optimization
Balance optimizing fleet size while finding good routes
What can the Asset Planning VRP solve?
Ability to identify efficient multi-stop vehicle routes while minimizing asset utilization
What are the benefits?
Utilizing Asset Planning VRP Optimization There are many ways to apply Asset Planning VRP optimization technology. Here are just a few examples:
Determine optimal private fleet size
Utilize optimization parameter to identify how many assets are needed to run optimal routes
Minimize private fleet and 3PL carrier assets
Consider which 3PL carriers to use in addition to private fleet

21. Transportation Guru Use Cases

22. Transportation Guru Customer Use Cases
LTL vs. Truckload Shipping
3PL vs. Dedicated
Route composition by asset
Asset Planning – Coming Soon!
Shipment consolidation
Delivery network synergies  Combine business units
Weekly scheduling
Load balance across week
Baseline vs. Optimized Routes
Direct vs. DC Shipping
Optimized routes for low, avg, and high volume seasonality
Backhaul optimization
Continuous Moves (simultaneous pickups and drop-offs ) – Coming soon!
Route Optimization
Load Balancing
Asset Analysis
Load Consolidation

23. Last Mile Delivery Company
Identify new DC locations using a Greenfield Analysis
Run Network Optimization to identify optimal sourcing
Run Transportation Guru to find efficient routes to 45K end customers for 45k individual shipments
Goal
Identified 37 key strategic distribution center locations
Resulted in efficient multi-stop vehicle routes
Found balance in minimizing facility costs and transportation costs
Results

24. Large Petroleum Company
Identify new location to hire field service rep to service oil pipelines
Reassign oil pipeline servicing locations to each service rep
Balance workload of reps and minimize overtime pay
Goal
Identified three new locations to hire service reps and service routes
Utilize step functions to minimize overtime hours
Balanced servicing location assignments among reps while maintaining balanced workload
Results

25. >$20B Large U.S. Grocery Wholesaler
Model DOT hours, prevent comingling of competitor loads, etc.
Analyze seasonality variances in demand week profiles
Model existing baseline route structure vs. optimized scenario
Goal
Peak demand better addressed using carriers than dedicated fleet
Optimizing routes results in significant savings & reduced empty miles
Went to market with optimized transportation network structure
Results

26. Tanzania Medicine Delivery
Model specialized asset requirements for rainy vs dry season
Identify load consolidation and multi-stop vehicle routes
Utilize viable road network to model routes in remote areas of Tanzania
Goal
Identified consolidated vehicle routes that address seasonality variability
Client used results from model to actually run routes
Results

27. Connect, Transform, Publish
Data
Data
Cloud
Cloud
Model
Model
Local
Local
Corporate
Corporate
General comment – I think it’s okay to think about what a typical flow might look like and not necessarily represent all things that can be done at each step of the process.
SAP Data Sources
SAP APO (Automated Planning and Optimization)
SAP DP (Demand Planning)
SAP ERP (Enterprise Resource Planning)
SAP BW (Business Warehouse)
HANA
HANA
ERP/BW/APO
ERP/BW/APO

28. TMS—LLamasoft Integration
Revised Business Rules/Design
“What if we add a new DC?”
LLamasoft Transportation Guru
TMS
“What-if?”
Shipment Transactions
“What if we change carriers?”
Rate Data
Master Data
“What if we extend delivery windows?”