Getting the Most from Advanced Planning Tools
Third-party logistics providers that use advanced planning tools to model complex routing operations and streamline the bid process have a significant advantage in both demonstrating results and helping clients cut costs. When they cut modeling time to a fraction of what it was, and utilize new tools, 3PLs can uncover opportunities and quickly implement changes that provide benefit for their clients.
Q: How can 3PLs use advanced planning tools to model complex routing operations and streamline the bid process?
Stevenson: Traditionally, companies used a team of analysts to model scenarios and calculate resource requirements. Any revisions required extensive man hours and double and triple checking updated plans for accuracy. The results were less than ideal because it was simply not possible to manually calculate all the combinations needed to arrive at an optimized plan. Factors such as rolling DOT rules, slip-seating, delivery windows, capacities, and truck schedules had to be included for the resource modeling to be effective.
In a tight economy, do companies have spare resources and time available to crunch through hundreds of combinations and arrive at an ideal solution? Probably not. They do the minimum required just to get the bids out in time. With the tools available, however, optimized bids and visual presentations can be compiled in a fraction of the time without the angst of cross-checking hundreds of manual calculations. Logistics companies that use these tools have a significant advantage in both demonstrating results and helping clients cut costs.
Q: Once they win the business, how do these companies put their design into action and drive continuous improvements on a daily basis?
Stevenson: First, the company has to efficiently execute the proposed solution on a daily basis. World-class logistics companies take it a step further and continually look for places to streamline operations and drive more cost savings. The combination of automated fleet routing, real-time GPS tracking, and resource optimization helps these companies execute better routes, resolve issues in real time, and continually uncover opportunities for cost reductions.
Am I getting the most out of my fleet operation? Are there cost savings opportunities we are unable to see using the processes and tools available today? These are the kinds of questions that a 3PL has to be asking continuously to ensure they are providing the best service possible to the customer. When you are able to quickly compare existing operations to what is possible, and to monitor planned versus actual performance levels, it is a different ball game.
Q: What keeps 3PLs from benefiting fully from planning tools?
Stevenson: The main hindrances are not knowing the types of modeling and daily execution tools available and not evaluating different scenarios because it was so difficult in the past. Many times, companies have considered changes but the impact was left to conjecture because it was too time-consuming to evaluate options. Changes in daily fleet routing were difficult to implement because fixed route structures and tools did not lend themselves to dispatching new routes for part of the fleet and evaluating results.
It is important for companies to understand what is possible and to adopt a new mindset for evaluating change since automated tools streamline the process and eliminate the guesswork. Appian holds general user conferences and a specific conference for analysts and 3PL users each year to help clients understand these possibilities and to demonstrate the tools available using real-world scenarios. When modeling time is cut to a fraction of what it was, and new tools are utilized, these companies can uncover opportunities and quickly implement changes that provide benefits for their clients.