In our latest Inspire webinar, Jack Levis (ex- UPS) shared insights and inspiration from the UPS journey on transport optimization which delivers savings of 200 million miles and $400 million annually.
The large audience and the high number of questions show that Transport Optimization is a top priority in many of our customer’s plans for 2022.
Below, we have highlighted seven of the great insights that Jack shared during the webinar.
1. Transport Optimization requires both Maths (aka Data Analytics and Optimization Algorithms) and Psychology ( aka Leadership & Change Management)
A powerful transport optimization solution needs to be coupled with a dedicated deployment plan that will bring the whole organization on the journey to success and ensure that the innovation has an impact.
Optimization drives enterprise-wide change and disruption across any organization, and this requires change management skills and leadership to drive new behaviours, culture, new skills, and adoption across all stakeholders.
For example, transport managers and planners will need to learn to transfer their implicit knowledge of the routes and customers from their heads, into the data model and then learn to trust the optimization algorithms rather than second guess them.
This change management involves support from the C-Suite and significant investment in training procedures, front-line support, new metrics, and balanced scorecards.
2. Transport Optimization is foundational for Digital Transformation
Logistics companies that wish to embrace Digital Transformation to drive new business models, products, and services need to have a foundational layer of transport optimization to provide the data, analytics, and capabilities to support innovation.
For example, if you wish to offer your client new services such as the ability to choose your service time and track your service delivery slot then you need a transport optimization solution based on a strong data analytics foundation.
3. Invest now in your Data Strategy and Analytics ( before you must)
Logistics is increasingly data lead with the adoption of exponential technology such as Big Data, IoT sensors, autonomous vehicles, etc. Accurate data is always a crucial prerequisite for better business insights so the absence of such data could be a bottleneck to business success. Companies need to invest now in their data infrastructure and analytics as they move from descriptive analytics (what just happened- telematics) to prescriptive analytics ( what should happen - optimization). Companies should invest now before they face disruption from more agile competitors or non -traditional disrupters. In Jack’s own words ‘ take the information out of your drivers and planners' heads and put it into a data model where you can use prescriptive analytics to drive better decisions.
4. Optimization algorithms using accurate data will always beat human transport planners
An optimization algorithm can process more transport variables (time windows, constraints, qualifications, etc.) faster and more efficiently than the human mind, enabling accurate decision-making for complex problems, so organizational goals like cost reduction, customer satisfaction, profitability can be achieved more effectively.
Jack showed a visual example of two routes on a map which the human eye could not distinguish the most efficient one given that we cannot see the hidden variables like time.
5. Stay the course on an innovation
Jack showed us that innovation does not evolve in a straight line so it demands patience and support from the C-Suite and perseverance from the team deploying it.
6. Focus on Decisions and Deployment
Focus on the impact of better decisions (e.g., what is the best way to sequence a multi-drop route with hard service time windows?) and then work backward to what data and technology you need.
Focus on deployment to ensure maximum impact as it will be a huge determinant of success.
7. When Maths and Psychology are applied Transport Optimization delivers transformational impact on the 4 S’s (Savings, Service, Sustainability and Safety)
The UPS experience delivered not just $400 million in annual savings but also delivered better outcomes in key areas such as safety, service and sustainability. This would not have been possible without investment in both technology and leadership.
AMCS have over 40-year experience and proven solutions in transport optimization solutions for the specialist requirements of such diverse sectors as last mile, waste and recycling, oil and gas, building materials and livestock. Our Intelligent Optimization suite of solutions provides powerful optimization algorithms designed to automate each aspect of your transport planning, monitoring and execution. It is complemented by our next generation Transport Management System which provides advanced planning, rostering, execution, monitoring and mobile solutions.
Watch the recording of the webinar here by clicking on webinar on-demand.
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Webinar on-demand - how UPS leveraged Transport Optimization
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