When I boarded the largest passenger airliner in the world, the Airbus 380, I wasn’t sure what to expect. They have to load a tremendous amount of people on this plane and in my mind it would take forever. I was pleasantly surprised. The loading process was as quick, if not quicker, than loading the much smaller Boeing 737.
How was the airline able to optimize the loading procedure? It became very apparent before ever boarding this massive jet that they have the proper infrastructure: multiple lanes for scanning your boarding pass; 3 jetways; and so on. They built not only a vehicle to efficiently handle a large volume of passengers, but the infrastructure to support it.
When considering your global transportation network, do you have the infrastructure needed to effectively and efficiently optimize it? Before answering that question, define what optimization means within your organization. Typically, this means freight consolidation, mileage reduction, and proper carrier selection. Does the same apply in the global arena? Is your organization sophisticated enough to manage your international freight in house, or do you depend on freight forwarders? Do you let the forwarder handle the foreign legs, while you manage the ocean and domestic moves? How does expedited freight fit into this? Will orders need to be split, to support an urgent demand, while shipping the rest at a lower cost? The scenarios become almost infinite when considering all the possibilities. How do you turn all of this into opportunity?
Look at the information you have available. Does the data support the decision-making process? For example, can you tell if an order needs to be expedited? If the data is rich enough, can you share the information with users, partners, and other systems? Can your optimization engine make the correct decisions based on the data? The optimization engine is an area that tends to get the most attention. It is the most interesting and typically the most complex. However, even the most sophisticated optimization engine won’t fill in all the blanks.
Will you plan based on geographies, modes, control towers, plants, and/or products? Are there savings to be gained by combining these groups? Do you have enough of a time horizon with your order releases to generate a plan? Will you need to procure equipment and bookings using forecasts, then re-plan again with the actual orders?
You may find that you will be running several different models when you automate your planning and optimization. Utilizing your private fleet domestically for outbound while considering backhaul opportunities is much different than pickups in Asia going to a container packing facility. Does it make sense to run each model separately or together? If separately, when would one optimization run versus another, and how do they impact each other? For example, that container from Asia may represent a domestic backhaul opportunity when it arrives at the inbound port; you don’t want to miss out on this opportunity.
Can you then measure the results and use the measurements for continuous improvement? You are more than likely doing some consolidation today. What are your current savings? This is your true baseline to compare to your optimization results. What measurements can be taken, then compared and then improved upon? For example, look at the planned carriers versus the actuals and determine what to do about changes. What does the optimization run look like when the actual carrier is used? Did the same consolidations occur? How about mode shifting and the number of stops on loads? The impact of not following the plan could be huge or trivial. Either way, you will need to know and understand those impacts so you can make the proper corrective actions.
The optimization software you choose is critical for global optimization. Software that was truly designed for multimodal, multi-leg transportation optimization can uncover new ways of moving freight around the world. A fully functional and configurable tool will open the door to new opportunities for tremendous savings.
Jim Geer is VP Solutions at MercuryGate, where he brings over 30 years of transportation and network technology experience. He knows the transportation industry from the ground up, managing several transportation companies, then developing software for the industry. Jim parlayed this unique experience into a successful career implementing transportation management. Jim has been with MercuryGate for over 5 years, holding various roles, with an emphasis on solution design and implementation. Prior to joining MercuryGate, Jim was with Infor Global Solutions as a Senior Business Consultant responsible for sales and implementations. Prior to Infor, Jim was Director of Clients Services for ShipLogix.