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Dispatch Optimization FOR DUMMIES CC-001

Dispatch Optimization FOR DUMMIES CC-001. James Wagner jwagner@commandalkon.com Cell 612-991-5912. Optimization . Optimization Continuously finding the optimum solution to a set of logistical problems. Ready Mixed Concrete Optimization

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Dispatch Optimization FOR DUMMIES CC-001

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  1. Dispatch Optimization FOR DUMMIESCC-001 James Wagner jwagner@commandalkon.com Cell 612-991-5912

  2. Optimization • Optimization • Continuously finding the optimum solution to a set of logistical problems. • Ready Mixed Concrete Optimization • Finding the optimum solution to a set of logistical problems - then recalculating the solution at each order or truck status change. Optimization for Dummies

  3. Optimization is not new to other Industries Optimization for Dummies

  4. Optimization is new to the Ready Mixed Concrete Industry. Optimization for Dummies

  5. How is Ready Mixed Concrete similarto other industries using optimization? • Orders have different start times and durations. • Due time and “gaps” in service are critical. • Specific products are required. • Specific trucks are specified. • Overtime must be controlled. • Delivery receipts are required. • Customer must sign for delivery. • Trucks return to domicile location at days end. • Lowest cost plant is used when possible. • Union rules must be followed. Optimization for Dummies

  6. How is Ready Mixed Concrete different from other industries using optimization? • Just- in-Time delivery. • Often short notice. • Made to order product. • The product has a short shelf life. • Order can have multiple loads. • The loads must be accurately spaced. • Unload rate often changes & must be matched. • A truck makes 1 delivery of 1 product/load. Optimization for Dummies

  7. How is Ready Mixed Concrete different from other industries using optimization? • Production & transport work close together. • Focus on service level (time) and costs. • High cost, low profit industry. • Uncertain dynamic schedule. • High quality is crucial. • An inexpensive product (2.5¢/ lb)that can have high removal costs • Customer controls final results. Optimization for Dummies

  8. Concrete dispatching is like playing chess. No move stands alone. Every move impacts another. Take a small loss now to extract a big win. Optimization for Dummies

  9. Dispatch decision complexity Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  10. Average dispatcherTrucks go to and from same order to same plant Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  11. Good dispatcherTrucks return from order and are redeployed to other orders thus “juggling” trucks Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  12. Better dispatcherReturning Trucks are redeployed to other Plants & orders Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  13. Best dispatcherTakes into account all orders, plants, trucks and drivers in all delivery areas, juggling to minimize time and overtime. Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  14. Best dispatcherTrucks and drivers return to their domicile plant taking into consideration time at the other plants. Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  15. Best dispatcher • Problem; • Most humans cannot think this many moves ahead • The situation & solution keep changing. Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  16. OptimizationTakes all this into consideration, constantly. Job #4 Plant A Job #1 Job #5 Plant B Job #3 Job #2 Optimization for Dummies The Future of Concrete Dispatching

  17. You already have optimization “guidelines” • Use the larger trucks first. • Avoid overtime. • Avoid deadheading trucks. • Always use full loads when possible. • Area “A” jobs should come from plant “A”. • Plant “X” has less expensive materials. • Don’t load too early for a job. • React quickly to jobsite conditions. • Wash up trucks when no longer needed. Optimization for Dummies

  18. Current Guidelines • But what if delivering a load from a different plant reduces overtime at the first? Optimization for Dummies

  19. Current guidelines • What if a very high priority customer can be serviced by juggling orders and loads to other plants? Optimization for Dummies

  20. Current Guidelines • What if the additional material cost for a small load at plant “B” is insignificant compared to the lower delivery cost from that plant? Optimization for Dummies

  21. Current Guidelines • What if having a truck return to another plant would eliminate the queuing at the original plant and improve utilization and service? Optimization for Dummies

  22. Current Guidelines Waiting a few minutes for the correct truck reduces delivery costs? Optimization for Dummies

  23. Why can’t I do this? • Decision Complexity • Too much math involved. • The inability to analyze the entire day. • The inability to analyze the entire market area. • Inability to improve with current tools. • Constantly changing situation. • Lack of time Optimization for Dummies

  24. Dispatch Challenges The “weak link” to further improving service and reducing delivery costs is you, the dispatcher. You are among the very best but can be overwhelmed by the amount of decisions and impediments. Optimization for Dummies

  25. Dispatch Challenges Dispatching tools have also “hit a wall” in improved utilization and service. Optimization for Dummies

  26. Dispatch Challenges We have been using the same tools for the last decade. Optimization for Dummies

  27. Dispatch Challenges If one’s only tool is a Hammer . . . Optimization for Dummies

  28. Dispatch Challenges All problems tend to be viewed as a nail. Optimization for Dummies

  29. Dispatch Challenges • Dispatching is a high stress profession. • The situation keeps changing. • The plan needs constant re-evaluation. • Re-scheduling is exhausting. Optimization for Dummies

  30. Dispatch decision complexity - factors • Haul cost by time • Haul cost by distance • Dead head costs • Plant loading speeds • Loading speed by mix • Plant opening times • Driver seniority • Union rules • Driver call in rules • Time of day • Cost of being late • Cost of not recycling trucks to same job • Truck attributes • Mix cost • Job priority • Job start time ranges • Linked orders • Need to load early • Trucks on tasks Optimization for Dummies

  31. Dispatch decision challenges • New orders • Changing orders • Cancelling orders • Delayed orders • Orders running short • Orders increasing • Orders unloading slowly • Drivers lost • Breakdowns • Traffic • Weather • Phones ringing • Radio • Questions from Sales • Reports required • Questions from billing • Angry customers • Long hours • Ever changing schedule • Non-dispatch phone calls Optimization for Dummies

  32. Customer order challenges • Must have trucks types (front discharge, long chutes, all wheel drive, conveyors. • Cannot use truck types (semi, heavy). • Truck attributes required (admix dispenser, multi state license plates, paving mixer) • Driver attributes required (airport clearances, refinery safety training, etc.) • Plant materials constraints. • Plant doesn’t matter but once started all loads must come from that plant. Optimization for Dummies

  33. Is it any wonder you sometimes have trouble making good, consistent decisions? Optimization for Dummies

  34. Dispatch Challenges • Overwhelmed, dispatchers have no choice but to rely on your past experience. • Often without consideration of its effectiveness. • Company policies often dictate their course of action. Optimization for Dummies

  35. Dispatch Challenges • By Friday, you are mentally fatigued. • Angry customers provide immediate feedback - thus over-influencing your decisions. • Your reward is often to be second guessed about the decisions made. • Dispatchers surmise that volume seems more important to management than service or utilization. Optimization for Dummies

  36. What is optimization? • Optimization is the next level tool to improve service and reduce delivery costs • Optimization assists you by calculating the overall lowest cost, highest service plan. • Optimization produces a plan in seconds • Optimization automatically re-plans at each change and displays the results. Optimization for Dummies

  37. Optimization takes into account the effect of each solution on the entire day and market area. What is optimization? • Not just one load. • Not just one order. • Not just one plant. • Not just one region. Optimization for Dummies

  38. What is optimization • Optimization assigns “costs” to compute the best plan. • The costs of running trucks and opening plants are known. • The costs of mixes are known • The costs of driver labor are known. Optimization for Dummies

  39. What is optimization • Optimization uses “pseudo costs” to factor in service. • Cost of being late by increasing increments • Cost of gaps in service by increments • Costs by customer priority • Costs by job priority • A customer’s priority increases service “costs”. • Certain jobs have higher priority and thus higher “costs”. • The “costs” increase as lateness increases. Optimization for Dummies

  40. How does optimization work? • Concrete factors can be tweaked • Balance service with costs • Priority customers, projects, jobs • Loading time for individual mixes. • On-time versus waiting for the best truck size (two loads on time or one load a little late) • Waiting a few more minutes for a better truck. Optimization for Dummies

  41. How does optimization work? Optimization has two facets • Resource or capacity planning • Future orders, trucks, drivers and plant schedules • Real time optimization • Today’s ever changing business Optimization for Dummies

  42. Resource or Capacity Planning • Used for future work. • Plans the best schedule with the orders, trucks, drivers and plants available. • An order’s loads are scheduled for the best plant based upon material, delivery and customer service costs. Optimization for Dummies

  43. “Penalty” ($) 75 50 25 20 30 10 Lateness (min.) How does capacity planning work? • The cost escalates the later the delivery. • A customer’s priority increases the cost of lateness by multiples. Service focus Efficiency focus Optimization for Dummies

  44. How does capacity planning work? • The contractor may want only certain trucks or attributes, not care about them or not want them on this order. • √ Rear discharge Front discharge • Semi trailer mixer X • Conveyor truck • √ • Site admix dispenser • Slump control Optimization for Dummies

  45. Real-time Optimization • Used for today’s work. • Reacts to the constantly changing situations facing dispatchers. • Must be fast and produce new plans immediately. • Replanning initiated by truck statusing or order changes. Optimization for Dummies

  46. How does Dispatch Optimization affect my daily activities as a dispatcher?

  47. Order Entry looks similar to COMMANDconcrete Optimization for Dummies

  48. Order Entry Optimization requires 100% Mapped Orders Optimization for Dummies

  49. Order Entry You can increase the suggested Travel Time with an Offset Optimization for Dummies

  50. Order Entry Item Codes are only available at specified plants. Optimization for Dummies

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