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By: - Prashant Sundaram Umang Raijiwala Kunal Pande Puneet Goyal Nishant Jain

Transportation Synergies ISyE 6203 Project. By: - Prashant Sundaram Umang Raijiwala Kunal Pande Puneet Goyal Nishant Jain. Maker of Vertical Transport Systems Elevators & Escalators Moving walkways Maker of Air Compressors & Compressed Air Systems. . Company Background. Objective

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By: - Prashant Sundaram Umang Raijiwala Kunal Pande Puneet Goyal Nishant Jain

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  1. Transportation SynergiesISyE 6203 Project By: - Prashant Sundaram Umang Raijiwala KunalPande Puneet Goyal Nishant Jain

  2. Maker of Vertical Transport Systems Elevators & Escalators Moving walkways Maker of Air Compressors & Compressed Air Systems. Company Background

  3. Objective • Scenario analysis • Potential opportunities • Results • Methodology • Recommendation • Future scope • Questions Outline

  4. Determine if Otis’ transportation network is suitable to support SULLAIR volumes • Long haul • Short haul • FOCUS– • 3 day(+1/-1) window • 5 day(+3/-1) window • 9 day(+6/-2) window • Combine shipments from/to 4 RDC’s for OTIS and SULLAIR shipments from Michigan City Objective – Combine networks of OTIS and SULLAIR

  5. OTIS- SULLAIR OPPORTUNITY 1: Consolidate shipments of SULLAIR on OTIS trucks leaving from Woodridge, IL riding Outbound to the 3 RDC’s & Nogales, MX

  6. OTIS- SULLAIR MANITOBA OPPORTUNITY 2: OTIS trucks picking SULLAIR shipments riding Inbound to Woodridge, IL & dropping off in Michigan City, IN MICHIGAN/ON NEW YORK MICHIGAN CITY

  7. FICTITIOUS FIGURES Current Scenario – Individual TL and LTL shipments are being transported 80% INCREASE After increasing scope (IL/IN)

  8. OPPORTUNITY 1: • Consolidate shipments of SULLAIR on OTIS trucks leaving from • IN/IL riding Outbound to the 3 RDC’s & Nogales, MX • OPPORTUNITY 2: • OTIS trucks picking SULLAIR shipments riding Inbound to IN/ IL • & dropping off in Michigan City, IN • But…. • Scope restricted • Not enough synergy opportunities • So we… • Increased the scope by considering shipments originating from IN/IL in • OPPORTUNITY 1 (OB) & destination states to IN/IL in Opportunity 2 (IB) • Now… • Increased scope by 80% • Potential savings could go up by 5-10 % of Total transportation costs NEW OPPORTUNITIES

  9. OTIS • 3 quarters data • +Origins and destinations US and Canada • + Truck current weight = [10,25000] lbs (because Sullair = [5,10000] lbs) • -Trucks below 50 lbs • - Expedited/Just-in-time deliveries • SULLAIR • + Origins and destinations US and Canada • - Shipments with origins outside Michigan City • - Destination ≠ Michigan city • - Shipment weight = 0/1 lbs • - Freight Charges < $100 Data Filtering – Before Analysis (Irrelevant data is removed)

  10. OUTBOUND (As % of total OTIS-SULLAIR IB shipments from IL/IN) Analysis Results - % values of SAVINGS INBOUND (As % of total OTIS-SULLAIR IB shipments to IL/IN)

  11. OTIS : • 5th Feb shipment from • Lombard, IL to Dallas, TX • Shipment weight 200 lbs • SULLAIR: • 3 shipments • 5th Feb : Michigan City to • Humble, TX (210 lbs) • 5th Feb : Michigan City to • Denison, TX (810 lbs) • 6th Feb : Michigan City to • Denison, TX (2100 lb) • Possible Synergies - ? Yes Scenario 1 – Linehaul shipments from IN/IL to the 4 RDC’s

  12. Division into Zones

  13. e.g. 5 day Window OTIS Ship Date + Travel Time -1 <= SULLAIR Ship Date <= OTIS Ship Date + Travel Time +3SULLAIR destinations <~ 250 miles to 3 RDCs & Nogales, AZ Multiple SULLAIR LTL shipments combined with single OTIS LTL Shipment

  14. Integrity Check: Freight weight (OTIS+SULLAIR) ≤ 35,000 lbs • SULLAIR Ship Date=OTIS Ship Date[+1,-1], [+3,-1],[+6,-2] • Preference to min. distance to SULLAIR pick-up • E.g.- OTIS shipments from VA should not pick up SULLAIR shipments in NC • Integrity Check that multiple SULLAIR shipments on OTIS < 30000 lbs • SULLAIR freight worth more than $100 Data Filtering – During Analysis

  15. OTIS Shipment – Supplier in Battleboro,NC Shipping to Woodridge,IL On 3rd February SULLAIR Shipment – 3 suppliers in Fayette, NC Black Mountain, NC & Mebane, NC to Michigan City, IN on 3rd & 4th Feb Distance between Battleboro & SULLAIR Suppliers~60-90miles Possible Synergies ?? Maybe Scenario 2 – Shipments originating from US, Canada, Mexico to IN & IL

  16. Division into Zones

  17. Referencing OTIS & SULLAIR shipments for Inbound Shipments to IL/IN • Key Points: • SHIPPER STATE: Origin State(NC) – 1 to Destination State(IN) – 4 states on the way -3 (KY),2 (VA) • Eg. : OTIS shipments from VA(2) should not pick up SULLAIR shipments in NC(3) • SULAIR shipments have REFERENCES to unique OTIS shipments • which can pick them • TRAVEL TIME taken into consideration. • All Locations Geo Coded

  18. The Next Logical Question… • ASSUMPTIONS MADE: • Stoppage charges on a ROUTE: $50 • Rates of TL’s & LTL’s on basis of $/mile: $1/mile • Distance between 2 places on basis of: • ACOS(COS(RADIANS(90-Lat1)) *COS(RADIANS(90-Lat2)) • +SIN(RADIANS(90-Lat1)) *SIN(RADIANS(90-Lat2)) *COS(RADIANS(Long1-Long2))) *3959 • COST CALCULATIONS: • Old Cost: • = Freight Charges paid by OTIS + SULLAIR • New Cost: • = [Miles driven by OTIS truck to pick up SULLAIR shipment*$1] + • [Old freight charge of OTIS shipment to destination or • Miles driven from OTIS Origin to Destination * $1 (whichever is lesser)]+ • [Miles driven from SULLAIR destination – OTIS destination * $1] • Savings: • = Old Cost – New Cost • Discarded Routes which had potential losses COST CALCULATIONS FOR IB

  19. RECOMMENDATIONS Outbound Inbound Incorporate real time information from both companies Club supplier shipments going to the RDCs/job site from IN/IL with SULLAIR Shipments Increase flexibility of SULLAIR delivery method Use 3 day windows for optimal savings

  20. Thank you!Questions and comments.

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