Planning Automation in Cold Chain

© 2013 OptiRisk India (P) Ltd, All rights reserved
Bala. Padmakumar
Director & CEO
OptiRisk India
Planning
Automation & Optimization
in
Cold Chain
Ph: +91 98406 18472/ +91 44 4501 8472
Web: http://www.optiriskindia.com
Email : optimize@optiriskindia.com
28th June 2013
Conference on Warehouse & Cold Chain Infrastructure
Hotel Hilton, Chennai

2
1. Introduction
2. Cold Chain Network Design
3. Transportation Planning
4. Other Solution
5. Who we are

3© 2013 OptiRisk India (P) Ltd, All rights reserved
While meeting many practical limitations / constraints
Manual Semi-Automatic Automatic
Centralized Decentralized
To achieve certain goals In a given time line
Using limited resources

Supply
Procurement
•Precooling System
•Farms (Rural
Markets)
•Manufacturers
Transport
•Refrigerated
Trucks
•Refrigerated
Railway Wagons
•Refrigerated Cargo
Containers
Storage
•Cold Storage
•Warehouses
Transport
•Refrigerated
Trucks
•Refrigerated
Railway Wagons
•Refrigerated Cargo
Containers
End Customer
•Retail, Terminal,
Markets, Factory,
Ports, Airport
Supply Chain
TEMPERATURE
CONTROL
(REFRIGERATION)
COLD CHAIN
LOGISTICS
Fruits &
Vegetables
Meat Fish &
Seafood
Dairy
Products
Beverages Pharmaceutical

Managerial decision making in minutes
High level visibility into the operations
Consistent and robust decision always
Collaboration

To achieve More (Benefits) with Less (Resource)
help stake holders
Logistics Companies Supplier Customer
Operating Efficiency Reduce wastage
Reduce delivery time

+ + =Math Science Common Sense
Math
Analytics
Predictive
Analysis
Operational
Research
Optimization
Meet
Need
Technology
Products/Service

Long Term
1+ yearsStrategic
Supply Chain Network Design
Medium Term Monthly / QuarterlyTactical
Inventory Management
Short Term Weekly/ DailyOperational
Transport Planning and Scheduling

We develop solutions
That automates planning process (IT System)
Which comes up with optimal plans using,
• Mathematics
(Operations Research, Analytics)

10
1. Introduction
4. Other Solution
5. Who we are

Supply Center

HUB
HUB
HUB
Spoke
Spoke
Spoke
Spoke
Spoke Spoke
Destination
HUB
Identifying the locations and capacity of warehouses and
number of trucks to meet the demand, which reduces overall
investment, operating expenses and wastage from end-to-end.
Supplier
Customer

Requires lesser Capital Investment
Reduces operational expenses
scientifically proven methods, which
Network design based on

Demand Centers
Location
Quantity
Change over time
Supply Centers
Location
Quantity
Change over time
Average Unit Cost
Risks
Natural Calamities
War
Oil Crisis
Exchange Rate
Regulatory Changes
Employee Relationship
Input
What-if Analysis
Warehouse
Numbers
Location
Capacity
Capacity change over time
Supply demand mapping
Output
Warehouse Costs
Labor
Electricity
Facilities
Transport
Inventory
Taxes and Tariffs
Constraints
Capacity
Local
Infrastructure
Input

Software GUI *
*Courtesy : IBM ILOG LogicNet+ XE
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU

: The client is one of the largest providers of ‘Building Products’
(roofing & interiors) in India.
: Due to lack of high-level supply chain visibility, plan and
policy, the company resorted to “Ad-hoc”/manual order fulfillment process from
different warehouses & plants to agencies, which caused higher overall logistics
cost (transport, warehouse, taxes)
As the demand was growing fast, the client wanted to identify new warehouse &
plant locations and their capacities to optimally meet the future demand at the
least cost. Furthermore, they needed to realign the supply linkages so as to
maximize plant capacity utilization and rationalize inventory levels across
warehouses.
The client also wanted to understand the impact of the proposed Goods & Services
Tax (GST) on the existing and proposed Supply Chain Network.

What we Delivered
OptiRisk developed SCN model
suggested reconfiguring order delivery
to reduce out-bound transportation
cost, overall taxes, and inventory level.
In addition, it suggested potential
warehouse locations, plants, and their
optimal capacity for future growth. At
the end, "what-if" analysis is done to
study the impact of proposed Goods &
Services Tax (GST) on the existing and
proposed Supply Chain Network.
Key Benefits
 17% saving on out-bound
transportation cost + taxes
 Reduced inventory
 Reduced delivery time
 Reduced capital requirement
 Reduced carbon foot-print
 Increased service level
 Payback in a couple of months
 ROI : 1: 70 times.

Existing Supply Linkage Optimal Supply Linkage

19
1. Introduction
4. Other Solution
5. Who we are

Farm
Warehouse
Market
Reefer Trucks Warehouse

Key Questions
How many trucks to use from the set of fleet and
from which carrier?
Which shipment option to use for each order?
Which customer /vendor should be served by each truck
and in what sequence?
Are there ways to reduce cost and still maintain/ improve service level?

What-if alternate transportation options are used?
Should the company buy (or) lease (or) rent trucks?
What-if the truck capacities are increased/decreased?
What would be the impact of fuel price change to logistics cost?

Software and What It Does for YOU
USE OPTIRISK / IBM SOFTWARE to get Optimized Vehicle Routes
Software used custom OR models + CPLEX solver.
Software is customized to YOUR CLIENT+BUSINESS needs.
Software helps client to achieve :
Reduced fleet travel distance / time / cost (5 to 30% saving)
Faster Customer-Response-Times (Optional)
Extra Carriage Capacity with same fleet (3 to 10% saving)
Improved Stakeholder Satisfaction Levels
Significant Planning Man-Hours Saving (70% to 90% saving)
Helps in long Term Planning
© 2013 OptiRisk India (P) Ltd, All rights reserved 23

 Reduced Stock-outs
 Improved Service Level
 Satisfied Customers
 Increased Business
On-Time Delivery
 Greater visibility and control
 Increased Planning Productivity
 Enabled Employees
Increased Visibility
 Fewer Fleet requirements
 Lesser driving distance / time.
 Lower cost & Investment
 Increased ROI
Optimized Delivery Routes
 Visual Displays
 Ready to print customized reports
 Visual Performance dash boards
for KPI tracking
Ease of Use
Less than six months
ROI 1: 30 to 70 times
(in 5 years)
Payback in months



Shareholder Value
ROI
Profit Investment
Cost Revenue # Trucks
BusinessLess mileage
(10 to 30% )
Service Level .
Lead time
(5 to 10%)
Planning
Errors

Web based application; access from anywhere.
Seamless integration with ERP systems.
Planning generated in minutes.
Custom views and reports for planner,
dispatcher, manager, and top-management.
Integration with maps for real-time tracking
and planning.
Manual over-ride on routes to take care of
unforeseen change in traffic and routes.

OptiRisk Route Planner & Scheduler Studio (ORPSS)

Delivery Routes
showing the
driving routes &
delivery points
Display of routes on Maps
Real time tracking of vehicles on maps
Manually changing routes on maps

Route Efficiency
(Liters Delivered / Distance)
Delivery Efficiency
(Liters Delivered / No of Trucks)
Service level
(Inventory available Time/ Total Time)
System performance tracking over a period of time for better understanding and management

23%+ reduction in total out-bound delivery transport cost.
Total planning time is reduced to minutes.
Payback of investment was less than a month
Improved service level and increased customer satisfaction.
The client is one of the multinational fuel distribution
companies having wide presence in India.
The aim was to develop a automated planning
tool which would reduce total cost incurred on out-bound logistics

31
1. Introduction
4. Other Solution
5. Who we are

SC Network optimization
Locate facilities
Match Supply & Demand
Managing seasonality, and
Reduce carbon footprint.
Benefits:
5-15% reduction in SC costs
Better service level
Container Optimization
Container size selection
Loading schedule
Benefits :
Maximize container utilization
Reduce number of container ( 5 to 10%)
Transportation Scheduling
Fleet Selection
Route Plan / Schedule
Benefits :
10-30% reduction in Transport
cost Increased on-time deliveries
Operational Inventory Management
Order quantity
Order time
Supplier identification
Benefits :
10-30% reduction in inventory
Improved service level
Revenue / Yield Management
Choose best price
Indentify Optimal Commission
Benefits :
Higher sales volume
Better Margins
Warehouse space Optimization
Inventory allocation
Warehouse through put management
Benefits :
Service time reduction
2 to 3 % reduction in space
required for warehouse

Asset Liability Management
Portfolio Optimization
An assets liability management tool with capability
for risk management and asset rebalancing
considering liabilities of the Pension fund and
insurance companies
Overcome the loopholes of conventional ALM
methods implemented advance stochastic liability
driven investment optimization techniques
An a robust mathematical optimization tool which
consider different assert classes to allocate the
fund as per user risk preference or utility function

34
1. Introduction
4. Other Solution
5. Who we are

___________________________________________________________________________________________________________________________

Asia Pacific, Africa, Australia &
Middle East:
Europe & America:
No 12, 25th Cross Street
Thiruvalluvar Nagar ,
Thiruvanmiyur,
Chennai –600041, India
OptiRisk R&D House,
One Oxford, Uxbridge,
Middlesex, UB9 4DA,
United Kingdom
Bala. Padmakumar
Ph: +91 98406 18472 / +91 44 4501 8472
Email: optimize@optiriskindia.com
Web: http://www.optiriskindia.com/
37© 2013 OptiRisk India (P) Ltd, All rights reserved 37© 2013 OptiRisk India (P) Ltd, All rights reserved

Planning Automation in Cold Chain

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