IT SYSTEMS FOR ADVANCED OPTIMIZATION

IT SYSTEMS FOR ADVANCED OPTIMIZATION Don t Compromise - Optimize! Efficient Yard Management for a Modern Hub Priv.-Doz. Dr.-Ing. Eva Savelsberg Head of Intermodal Solutions eva.savelsberg@inform-software.com

Agenda INFORM GmbH Company Profile Software Solution SyncroTESS Real-time Optimization for Hubs Case Studies Hermes Logistik Gruppe Parcel Centers Swiss Post Three Intermodal Parcel Centers Benefits Modern Hub Management with SyncroTESS

INFORM Core Competences Advanced Optimization Systems are capable of making sensible decisions, situation responsive supporting the user with best proposal Intelligent Decision Support Systems Transactional Information Systems e.g. Oracle/ JDE, SAP, WMS IBM. Technology: mathematical optimization (Operations Research, Fuzzy Logic, Computational Intelligence) Company Award by the German Association for Operations Research in 2006 Classic IT systems are designed to handle administrative business processes with user making decisions based on their capabilities.

Logistics - Realtime-Optimization 1. Rule: Choose the closest follow up job 2. Optimized allocation with SyncroTESS algorithms 40 km 25 km 15 km 100 km Order 2 Order 3 Order 2 Order 3 Order 1 10 km Order 4 70 km 20 km Order 1 15 km Order 4 Total empty travel: 205 km Total empty travel: Reduction > 50%! 90 km!

Leerchassis-Ausgleich (GEO) Warehouse Leerchassislager 4 Leercontainerlager 5 Gleisstellplätze 9 transport-orders; long distances Chassisbedarf Stellplatzbedarf

Leerchassis-Ausgleich (GEO optimiert) Hofstellplätze Stellplätze Übermaßcontainer Leerchassislager Leercontainerlager 5 Gleisstellplätze 5 optimized transport-orders Chassisbedarf Stellplatzbedarf

Vehicles Optimization Idealized simple planning problem: Assign n jobs to m vehicles Orders Constraints: Objective: exactly one job per vehicle; every job assigned minimize the total cost Assume there are 60 jobs and vehicles. Can t we simply enumerate? 60! = 60 x 59 x 58 x... possible plans 60! = 8,3 x 10 81 There are approximately 10 78 atoms in the universe! x x x x Sophisticated OR algorithms can solve such a problem within seconds! For very small, idealized problems, we can even prove optimality. Real problems are much more complex (e.g. 2,000 rather than 60 jobs) Guaranteed optimality is often out of reach and we must use heuristics in order to approximate - ----the optimal solution

INFORM at a glance specialty: quantitative optimization logic best-of-breed solution as add-on to existing IT established 1969 as spin-off from Aachen University since 1985 approx 22% revenue growth per year organic growth, since 1985 always profitable private ownership including directors and more than 50 long time staff today more than 350 employees key focus: sustainability 50 100 150 200 250 300 350 1969 1985 2010

Worldwide Activities Chicago United States Cheshire UK Aachen, Frankfurt Germany Headquarters in Aachen Offices in Germany, UK, United States Export quota > 50% Projects in Europe and worldwide Employees from > 30 nations

INFORM Business Units Logistics Industry logistics Airport logistics Maritime and Inland Terminals Parcel, Hub, DC and Dry Ports Retail and Pooling Building Materials Logistics European Intermodal Award 2002 e@logistics award 2008 Internal Transportation Supply / Inbound Logistic Automotive Healthcare e@logistics award 2010 Ground Handling Airport Resource Management Airline Hub Operations Materials management Production Risk & fraud Inventory Optimization Demand Planning Inventory Sampling Advanced Planning (APS) Capacity Planning Production Control and Optimization Fraud Prevention Intelligent Claim Evaluation Internet Banking & Payment Risk

Conflict of Goals Costs Services Adherence to delivery dates? Throughput times? Flexibility? Focus on costs Conflict of goals

Conflict of Goals Minimal capacity utilization Costs Reduce deadheading Minimize idle times at loading gates Services High adherence to delivery dates Short throughput times High flexibility Focus on service Conflict of goals

Advanced Optimization Selected Example Real-time dispatching of in-plant transportations steel works in the USA, 25 vehicles (trucks + straddle carrier) about 3,600 transportations/day (ad-hoc, with priorities, deadlines) optimization of sequences and allocation of resources Outcome in the first year: adherence to schedules: 97% cost saving: $ 918000 p.a.

Selected Customer References Daimler AG INFORM Optimization systems are used by more than 1,000 companies worldwide

Agenda INFORM GmbH Company Profile Software Solution SyncroTESS Real-time Optimization for Hubs Case Studies Hermes Logistik Gruppe Parcel Centers Swiss Post Three Intermodal Parcel Centers Benefits Modern Hub Management with SyncroTESS

HUB Logistics Sorting Center Control Center Storing Positions Rail Terminal Shunting Truck In-Gate Truck Out-Gate

Need for Action Drawbacks of manual yard management are: Time-consuming and troublesome procedures Too many variables have to be taken into account Intransparent and sub-optimal decisions may be taken Transport operations can often not be retraced since they are not documented properly Sorting centre activities and yard processes are not synchronized Leading to: Employment of more resources than necessary Reduced quality of service Decreasing on-time deliveries Endangering the service level with the end customer

Solution Areas Gate Harmonize the receipt of external trucks Transparent overview of incoming transports Drivers waiting room: visual display of drive-in clearance Registration of arriving trucks (manually or automated via communication panel) Scheduled / actual data comparison Printout of the terminal route card for truck drivers upon arrival at gate Printout of waybill at departure

Solution Areas Yard Shed light on your yard Status of storing positions (e.g. free, occupied, reserved, blocked) Position and status of all loading units (color key displays e.g. inbound, outbound, loading, information about origin/destination, content) Gate occupancy including destination and departure time of the next transport to this destination Visual image of train tracks, rail cars and loading units Let the trucks flow in the hub Allocation of loading docks Allocation of storing positions for loading units Automated generation of optimized driving jobs for internal trucks Order transmission via mobile terminals (GPRS, WLAN, etc.)

Solution Areas Sorting Center Get the sorting center involved Center staff collects data via mobile terminals (WLAN) - Status of loading/unloading, - Relevant dispatch information (e.g. seal no., loading equipment, content, fill rate) Relevant dispatch information is displayed on monitors (e.g. transport destination, departure time, priority) Integration of forklift truck operation (loading small load carriers in swap bodies, containers etc.) Being up-to-date at the loading bays Automatic status report of the loading bays (available/occupied) e. g. via external sensors Automated transport orders to unoccupied outbound loading bays with empty swap bodies, containers etc.

Solution Areas Railway Get the rail connected Receipt of access signals and transfer of shipping signals Automatic generation of optimized driving jobs for railway cranes Automatic registration of carriages and swap bodies by reading out RFID-transponders Communication with crane control system

System Architecture Order Entry Data Entry Modules Functional Modules Commodule Resources manually operated manually operated RF RFID Core & GUI YardControl manually operated Web Barcode CraneControl VehicleControl manually operated Data Radio GPS RailControl GateControl automated IT Integration Data Radio

Agenda INFORM GmbH Company Profile Software Solution SyncroTESS Real-time optimization for Hubs Case Studies Hermes Logistik Gruppe Parcel Centers Swiss Post Three Intermodal Parcel Centers Benefits Modern Hub Management with SyncroTESS

Case Study Hermes Logistik Gruppe Deutschland Live systems at West HUB Hückelhoven - approx. 50 mio. parcels per year - running since 2008 Central HUB Friedewald - approx. 70 mio. parcels per year - running since 2009 North HUB Hanover - approx. 50 mio. parcels per year - running since 2010 Annual transport volume: - 44.000 truck tours - 256 mio. shipments More live systems under construction for two more additional sites East HUB Haldensleben - approx. 56 mio. parcels per year - Go-Live Summer 2011 HUB Ohrdruf - Bulk goods / Out-of-gauge - Go-Live Summer 2011

Case Study Hermes Logistik Gruppe Deutschland

Case Study Swiss Parcel Post Live systems at Härkingen Parcel Center - approx. 50 mio. parcels per year - running since 2000 Frauenfeld Parcel Center - approx. 70 mio. parcels per year - running since 2000 Annual transport volume: - 13.5 mio. km, road - 27 mio. km, track - 150 mio. parcels Intense fluctuations (Christmas etc.) Daillens Parcel Center - approx. 50 mio. parcels per year - running since 2010

Case Study Swiss Parcel Post

Case Study Swiss Parcel Post Need for action Per distribution center: 1.000 swap body movements (2.000 in peak times) with 4-6 vehicles per location 70.000 m² site 100 swap body buffer parking sites 500 crane swings with 2 railway cranes (RMG) 40 trains with 200 wagons on 4-6 tracks (half-train 300m) 150 trucks are attended at 3-4 truck gates First priority: punctuality and service quality

Case Study Swiss Parcel Post Solution Deployment of one SyncroTESS per hub including: - yard optimizer - vehicle optimizer - rail crane optimizer Inter-Hub communication between SyncroTESS systems Full integration of all third party systems Application of RFID-transponders for identification (container and railcars) Radio data transmission for communication Automatic dispatching

Agenda INFORM GmbH Company Profile Software Solution SyncroTESS Real-time Optimization for Hubs Case Studies Hermes Logistik Gruppe Parcel Centers Swiss Post Three Intermodal Parcel Centers Benefits Modern Hub Management with SyncroTESS

Salvage Treasures! Add Value Boost Velocity Cut Down Operational Costs Save Time and Money Do More with Less Enhance Efficiency Get Ahead of Competitors

After: Transparency >> With SyncroTESS we are straightaway on the pulse of our operations. << Markus Sekula, Project Manager, Hermes Logistik Gruppe

Solution: SyncroTESS Automates gate processes and check-in to a large extent Sheds light on your yard by providing real-time information of all yard movements Automatically sends transport orders and lets the trucks flow in the hub Gets the sorting center involved via mobile terminals Is up-to-date at the loading bays Gets the rail connected and controls the cranes Advantages: Tunes, controls and synchronizes all processes Gets the best result with regards to overall goals & limiting conditions Ensures visibility, documentation and transparency of all yard processes Enables continuous improvement of all yard related hub processes

Benefits of a Modern Yard Management with SyncroTESS Improve management processes and decrease overall shipment time Increase turnover while balancing costs Intelligent software can enhance processes and increase throughput without using extra manpower or purchasing expensive new equipment, saving postal companies time and money Optimizing operational efficiency, postal companies see an increase in cost efficiency >> Since introducing SyncroTESS, the time needed for replacing a full-swap with an empty one at the loading bays has decreased considerably to one-third within the last year. << Sven Klimpel, Managing Director Central HUB, Hermes Logistik Gruppe Deutschland

IT SYSTEMS FOR ADVANCED OPTIMIZATION Thank you for your attention! Priv.-Doz. Dr.-Ing. Eva Savelsberg Head of Intermodal Solutions eva.savelsberg@inform-software.com