A D D I N G
C R E D I B I L I T Y
Optimize your Network
Meeting today’s challenges and tomorrow’s demands
Answers to your key network challenges
ORTEC knows the highly competitive Courier, Express & Parcel (CEP) business inside out. We’re experienced in helping network managers address today’s daily challenges and equip your network to meet tomorrow’s unpredictable demands.
To achieve the optimal cost-service balance for your business, we remove the guesswork to reveal the answers to the crucial network management questions:
n How can my linehauls meet service levels in a cost-efficient way?
n How can I keep costs under control despite volume fluctuations?
n Do I need separate networks for special/faster services?
n Can I meet the service levels better by bypassing hubs?
n Am I using the best routing for each flow-and- service combination?
n How can I better utilize my vehicles?
n Which tours should I offer my subcontractors so I get the best possible price?
n How do I grab the opportunities offered by expiring subcontractor contracts?
n How do I restructure the network when we close a depot/hub?
n Can our current infrastructure support our optimal network?
Smarter solutions for smarter decisions
At ORTEC we have the expertise and tools you need to tackle these challenges in a structured way. We provide fact-based insights into your network’s current performance and concrete improvements to your network processes. Our wide range of support and solutions can meet your network challenges, whatever the scale and complexity of your business, from a global multi-modal concern to a small local service.
Benefits include:
n Insight into your networks current performance n Advice on which changes will deliver the biggest benefits
n Help creating your optimal network, balancing cost and service
n Quantitatively substantiated advice on the best scenario to implement
Meeting today’s challenges and tomorrow’s demands
Network Guard
First identify your weak spots…How is your network currently performing? Do you know the extent of your network’s volume imbalance? What is your cost-per-kg for different product-service combinations and different volumes per period? Network Guard is a management information tool that gives a clear, logical overview of how your network is operating, providing insights into your current strengths and weaknesses. So you know the areas where you can achieve improvements that will give you that competitive edge.
Chart 1: Balance of in- and outgoing flows per location
Instant insight, long-term added value
Chart 1 shows ingoing and outgoing flows from different locations in the network. Telling the network manager that operations in his depots have different peak times and need different manpower set-ups. It also highlights that with the current network it will remain a challenge for him to construct efficient roundtrips.
Chart 2: Evaluation of cost-per-kg over the year
Chart 2 shows how in the summer, with a decrease in volume and increase in cost-per-kg, this network manager didn’t downsize sufficiently to reduce his costs enough to compensate for volume decrease.
Know how your network is performing
Network Guard gives you the KPIs you need to monitor your network’s performance:
n Service requirements per product type n Volume flows per product type
n Number of tours
n Number of movements
n Total kilometers
n Total cost, cost per ton, cost per ton per km
n Differences in performance against KPIs over different time periods
So you know exactly where the improvement opportunities are: your first step towards a better network.
0 -2,0 3,0 8,0 13,0 18,0 20 40 60 80 100 120
Jan Feb Mar Apr
Volume Cost per KG Benchmark Cost
May Jun Jul Aug Sep Oct Nov Dec
Outgoing Incoming
n Total kilometers
n Total cost, cost per ton, cost per ton per km
n Differences in performance against KPIs over different time periods
Network Simulator
… then take a big step forward with your improved network …
Network Simulator assigns volume flows to movements. Letting you see your current network in granular detail and calculate your optimal routing of volumes. And revealing the opportunities you have to reduce costs, improve service, better utilize linehauls, and generally make your network resilient enough to accommodate significant volume fluctuations.
Here are just some of the potential improvements Net-work Simulator can trigger:
n Combine two under-utilized movements
n Introduce routes with multiple depot-visits before connecting to a hub
n Change vehicle types/modalities
n Change route via a hub to a direct depot-to-depot route or vise versa
The figures show two different network setups:
n The left figure is a Hub-&-Spoke network: very efficient for example with LTL (less-than-truckload) operations, where depot-to-depot volume is too low for full truckloads. But also more time-consuming, due to additional handling time at hubs and potential detours connecting to hubs.
n The second is an Express network: because it uses several movements where hubs are bypassed, the network costs are higher but service capabilities increase significantly.
What-if…?
Network Simulator lets you carry out what-if scenario analyses. So you can quantify the effects of particular events and adjust your network to deliver your optimal solution. For example:
n What would be the impact of volume changes within your network? n What should I do when a subcontractor’s contract expires?
n How should I reroute volume if a particular depot has to close? n Where can I reduce my air volume and switch more volume to road?
Average utilization of linehauls
Average utilization of linehauls
Average cost per kilo Average cost per kilo
Average number
of service days Average number of service days
About ORTEC Consulting Group
ORTEC Consulting Group is a division of ORTEC, the world’s leading provider of advanced planning and optimization solutions and services. ORTEC has over 1,650 customers worldwide, over 700 employees and offices in Europe, North America, South America and the Pacific Region.
Network Optimizer
… before completely optimizing your infrastructure
The Network Optimizer will use existing movements to create your best routing of volumes, or generate new movements if that will deliver an even better network. Ensuring you get the optimal network within the infrastructure available.
Network Simulator versus Network Optimizer Figure 3: a combination of a
Hub-&-Spoke and an Express network
In figure 3 the optimal network has aspects of both the LTL and Express networks: a cost-efficient hub-&-spoke basis, with depot-to-depot movements to solve service bottlenecks. As a result, this network costs less than the Express network, but still manages to minimize any adverse service impact.
Average utilization of linehauls
Average cost per kilo
Average number of service days
What-if scenarios
possible?
Network
Improvements
Level
Implementation
timescale
Simulator
Current
√
Operational &
Tactical
Immediate
Improving the flow so your business can grow
Optimizing your network in the Courier, Express & Parcel (CEP) market
An efficient network is vital if you want to give your customers the level of service they expect against the lowest possible operational costs.
To help you achieve this delicate balance, ORTEC offers a unique portfolio of products and services that address the specific challenges facing your company
Insights into how your network is currently performing:
n Utilization of linehauls
n Imbalances of volumes
n The bottlenecks for achieving your agreed service levels n Number of days needed for each origin-destination flow
Enhancements to your network’s cost- and service efficiency. Making it robust enough to handle change, and thereby future-proof:
n Calculating the routing of volumes.
n Assigning volumes to movements in order to identify depot-to-depot movements, combine under-utilized movements, change vehicle types/modalities, and routes via multiple depots.
n Analyze different what-if scenarios, such as volume changes or the closure of a depot.
n Develop the optimal network within your available infrastructure.
Curious what ORTEC can do for your network?
Send us your contact info at
cep@ortec.com
and we will contact you.The Netherlands
www.ortec-consulting.com
consulting@ortec.com
North America
www.ortec-consulting.com
consulting@ortec.com
Rated the best by our peers
In 2012 ORTEC won the prestigious Franz Edelman Award together with TNT Express and Tilburg University for helping TNT Express optimize its supply chain.
The winning Operations Research tool analyzes and improves TNT Express transportation networks. Delivering major cost savings, service and management improvements, and CO2 emission reductions.
The price is awarded by the Institute for Operations Research and Management Sciences (INFORMS®), an
international society with 10,000 members, including Nobel Prize laureates, focused on applying scientific methods to support decision-making, management and operational processes.
