Hein Fleuren

Horizontal cooperation in transport and logistics: A literature review

This article presents a broad review of horizontal cooperation in transport and logistics. This topic is fast gaining momentum in the logistics sector and is thus highly relevant from a practical point of view. Moreover, horizontal cooperation is also interesting from a theoretical perspective because it can be approached by various disciplines, offering a forum for economists, operations researchers, and psychologists, among others. The purpose of this article is to provide a starting point for intensified future research on the topic of horizontal cooperation. In addition to a discussion of various types of horizontal cooperation and closely related literature, the drivers, impediments, and facilitators are reviewed and supported by an extensive bibliography.

Joint Route Planning under Varying Market Conditions

Purpose - To provide empirical evidence on the level of savings that can be attained by joint route planning and how these savings depend on specific market characteristics.Design/methodology/approach - Joint route planning is a measure that companies can take to decrease the costs of their distribution activities. Essentially, this can either be achieved through horizontal cooperation or through outsourcing distribution to a Logistics Service Provider. The synergy value is defined as the difference between distribution costs in the original situation where all entities perform their orders individually, and the costs of a system where all orders are collected and route schemes are set up simultaneously to exploit economies of scale. This paper provides estimates of synergy values, both in a constructed benchmark case and in a number of real-world cases. Findings - It turns out that synergy values of 30% are achievable. Furthermore, intuition is developed on how the synergy values depend on characteristics of the distribution problem under consideration. Practical implications - the developed intuition on the nature of synergy values can help practitioners to find suitable combinations of distribution systems, since synergy values can quickly be assessed based on the characteristics of the distribution problem, without solving large and difficult Vehicle Routing Problems. Originality/value - this paper addresses a major impediment to horizontal cooperation: estimating operational savings upfront.

Operational planning of a large-scale multi-modal transportation system

Abstract This paper describes the operational planning system POP developed for Danzas Euronet, a merger of Deutsche Post Transport and Danzas NTO. As of November 1997, the system has been used daily for the transportation planning of on average 4000 container-orders a day on trains and trucks in Germany. An important feature is that the future has to be taken into account: trucks have to return home within a couple of days, and empty containers have to be available at the right time and the right place. These repositioning aspects are taken into account integrally with the planning of the orders in order to get a cost-efficient solution. In addition, practical constraints play an important role, and the system has to be flexible for new and modified constraints. The system has not only been used heavily for daily planning, but also for many simulation studies, thereby supporting operations as well as commerce.

REDESIGN OF A RECYCLING SYSTEM FOR LPG-TANKS

Abstract.This paper presents a case study that is performed at Auto Recycling Nederland (ARN), the organization for end-of-life vehicle recycling in the Netherlands. End-of-life vehicle recycling starts with the removal of dangerous materials, such as oil, fuel and LPG-tanks (Liquefied Petrol Gas). We consider the problem of redesigning the recycling system for LPG-tanks. Like in many reverse logistics network design questions, uncertainty in system behavior and difficulty in gathering reliable data are important characteristics of our case. Especially while the total costs consist for almost 50% of transportation costs, reliable transportation costs estimations are crucial. We use a vehicle routing model to solve this data problem and feed the estimations into a mathematical programming model. The system uncertainty is tackled with sensitivity analysis.

Supplier-initiated outsourcing: A methodology to exploit synergy in transportation

Over the last decades, transportation has been evolving from a necessary, though low priority function to an important part of business that can enable companies to attain a competitive edge over their competitors. To cut down transportation costs, shippers often outsource their transportation activities to a logistics service provider of their choice. This paper proposes a new procedure that puts the initiative with the service provider instead: supplier-initiated outsourcing. This procedure is based on both operations research and game theoretical insights. To stress the contrast between the traditional push approach of outsourcing, and the here proposed pull approach where the service provider is the initiator of the shift of logistics activities from the shipper to the logistics service provider, we will refer to this phenomenon as insinking. Insinking has the advantage that the logistics service provider can proactively select a group of shippers with a strong synergy potential. Moreover, these synergies can be allocated to the participating shippers in a fair and sustainable way by means of a so-called Shapley Monotonic Path of customized tariffs. Insinking is illustrated by means of a practical example based on data from the Dutch grocery transportation sector.

Factory Gate Pricing : an analysis of the Dutch retail distribution

Factory gate pricing (FGP) is a relatively new phenomenon in retail distribution. Under FGP, products are no longer delivered at the retailer distribution center, but collected by the retailer at the factory gates of the suppliers. Owing to both the asymmetry in the distribution networks (the supplier sites greatly outnumber the retailer distribution centers) and the better inventory and transport coordination mechanisms, this is likely to result in high cost savings. A mathematical model was used to analyze the benefits of FGP. The main contribution of this paper is its practical approach to transport consolidation in this recently emerging supply chain concept in retail distribution. Extensive numerical results for a large real-life case study of the Dutch retail distribution are presented to show the effect of the orchestration shift from supplier to retailer, the improved coordination mechanisms, and sector-wide cooperation.

Collector Managed Inventory, a Proactive Planning Approach to the Collection of Liquids Coming from End-of-Life Vehicles

In this article we introduce Collector Managed Inventory (CMI) as the reverse logistics counter part of Vendor Managed Inventory (VMI).The collection company takes responsibility for the inventories of cores or materials to be recycled.Experience in forward supply chain management has shown the potential of VMI by bringing the coordination of transportation and inventory decisions to the same supply chain entity.Using information technology called telemetry, we are able to monitor inventory levels at distance.We introduce a proactive planning methodology based on two types of collection orders: must- and can-orders.Every collection period all must-orders have to be collected, while canorders are only collected if they can be combined beneficially with the must-orders.The routing problem is solved by a combination of route generation and set partitioning.The system is illustrated in a real-life case study for Auto Recycling Nederland on the collection of liquids coming from end-oflife vehicles, such as coolant and oil.In several scenarios the old reactive approach is compared to the proactive approach resulting in cost savings up to about 19%.

A Lagrangean Relaxation Based Algorithm for Solving Set Partitioning Problems

In this paper we discuss a solver that is developed to solve set partitioning problems.The methods used include problem reduction techniques, lagrangean relaxation and primal and dual heuristics.The optimal solution is found using a branch and bound approach.In this paper we discuss these techniques.Furthermore, we present the results of several computational experiments and compare the performance of our solver with the well-known mathematical optimization solver Cplex.

Problem Reduction in Set Partitioning Problems

In this paper, several problem reduction techniques are discussed that can be used to reduce the solution time of set partitioning problems. These techniques can be applied in any solution algorithm for set partitioning problems. Besides a short review of the existing literature on preprocessing set partitioning problems, we also present several new techniques. The value of these techniques is illustrated by various computational experiments.

Enriching the tactical network design of express service carriers with fleet scheduling characteristics

Express service carriers provide time-guaranteed deliveries of parcels via a network consisting of nodes and hubs. In this, nodes take care of the collection and delivery of parcels, and hubs have the function to consolidate parcels in between the nodes. The tactical network design problem assigns nodes to hubs, determines arcs between hubs, and routes parcels through the network. Afterwards, fleet scheduling creates a schedule for vehicles operated in the network. The strong relation between flow routing and fleet scheduling makes it difficult to optimise the network cost. Due to this complexity, fleet scheduling and network design are usually decoupled. We propose a new tactical network design model that is able to include fleet scheduling characteristics (like vehicle capacities, vehicle balancing, and drivers’ legislations) in the network design. The model is tested on benchmark data based on instances from an express provider, resulting in significant cost reductions.