Logistics technology: New ILOG offering takes a closer look at transportation network planning
Jeff Berman, Group News Editor -- Logistics Management, 11/19/2008
SUNNYVALE, Calif. and PARIS—ILOG, a provider of enterprise-class business rule, optimization, and visualization software components and services, has rolled out a new transportation planning application—Transportation Analyst 2.0—that allows users to quickly analyze transportation strategies and determine best way to utilize transport assets.
Designed for supply chain analysts, consultants and planners in the retail, consumer packaged goods, and third-party logistics sectors, ILOG officials said this desktop-based tool enables companies to analyze their network transportation strategy across various critical dimensions and to compare multiple “what-if” scenarios.
In an interview with LM, David Simchi-Levi, ILOG Chief Science Officer, said that Transportation Analyst 2.0 was designed with a focus on strategic transportation planning processes that allows users how to best allocate shipments through various modes of transportation. Another focus of the application is analyzing the ability of multiple types of shipments, whether shipments are going to or from customers’ sites, to warehouses or for cross-shipments between different customer locations. Simchi-Levi said it also provides analysis for freight consolidation and deconsolidation as well as put restrictions on shipments that cannot be transported together like chemicals, for example, along with shipment schedules.
Another important capability of Transportation Analyst 2.0 cited by Simchi-Levi is its interface.
“This interface allows users to navigate the data very effectively,” he said. “A lot of times when you do strategic routing, there is an enormous amount of data and you want to sort through the data very effectively…so that it is easy to use and intuitive.”
In providing an example of Transportation Analyst 2.0 at work, Simchi-Levi described how Midwest-based distributor (that is an ILOG customer) with 450 stores to sell to with about 50 trucks and more than 50 suppliers used it.
This distributor had separate inbound and outbound logistics teams, with the processes and operations handled independently of each other. There was a question, though, he said, of whether there was an opportunity at the planning level to combine the inbound and outbound networks.
“They used [Transportation Analyst 2.0] to determine if product was dropped at a certain location and moved to a supplier whose location was close by to pick up items there and either delivers them to a warehouse or to another customer location to see what type of opportunities it would give them,” said Simchi-Levi. “It is basically consolidating two transportation networks that before using [analysis technology] were managed independently.”
After a two-day training on Transportation Analyst 2.0 with ILOG, the distributor used the tool to determine their best options and eventually reported a seven percent reduction in total transportation costs—about $1 million, due to the consolidation of its inbound and outbound networks, which took it about two months to implement.
This savings, said Simchi-Levi, is a prime example of how Transportation Analyst 2.0 can help users better learn about and model transportation networks, adding that it is reflective not only in cost savings but also in service, too, which can better expose users to opportunities with both suppliers and customers, and also offers users with better ways to leverage their own resources.
Data used in Transportation Analyst 2.0 is culled on an independent basis and is based on the user’s own actual transportation costs, rather than hypothetical data, to definitively gauge their potential savings or additional costs, which can change due to market conditions like seasonal shipping patterns, fluctuating gas prices and inventory carrying and warehousing costs, among others.
“A lot of times companies will just do a spreadsheet analysis to guess what an effective transportation strategy is,” Simchi-Levi. “And if you think about existing transportation management solutions most focus more on operations than planning. Users can still use things like spreadsheets, but they can upload their data to Transportation Analyst 2.0 in an optimization model that is easy to use and the user does not need to be a scientist to analyze the data and ask a lot of different what-if questions in an engine that can generate a lot of different solutions for them.”
Carbon footprint monitoring: Another way users can deploy Transportation Analyst 2.0 is to gauge their carbon footprints by analyzing carbon emission levels to evaluate and factor in different scenarios for reducing carbon emissions in their supply chain.
Simchi-Levi explained that the tool provides carbon footprint analysis according to the mode of transportation being used. This allows users to compare different transportation strategies, look at cost and service, and compare them by the total carbon footprint in metric tons associated with different strategies.
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