Loading product in a truck, one of the last stepsin order fulfillment, used to be easy. Packages were more or lessthe same size and easy to stack. Customers had few shippingrequirements. Fork truck operators usually had enough time toscrutinize a pallet load or a trailer layout.
Now, companies like Thomson Consumer Electronics Inc. (TCE)are facing an explosion in the number of combinations of productsand retailer packaging requirements. These combinations, put upagainst shipping constraints, make load packing inefficient. Thisinefficiency, in turn, decreases truck use, increasestransportation costs, and increases the possibility of productdamage in transit. And because load packing does come last, thewarehouse does not know until late in the game what sizecontainer it needs to ship a customer order. This sometimesresults in splitting or otherwise delaying shipments tocustomers.
Rather than put customer service in jeopardy, TCE implementedVirtual Loader from Solution Dynamics Inc. This on-line loadplanning system sizes shipping containers--usually trucktrailers--before warehouse personnel even see physical product.Then it displays a three-dimensional layout of how to load thecontainer best.
Thomson Consumer Electronics is the country's largestmanufacturer and marketer of television receivers and relatedvideo products under the RCA, ProScan, and GE brands. Productsinclude color televisions with 2- to 61-inch screens (diagonal), videocassette recorders, camcorders, laser disk and compact disk players, the Digital Satellite System, and accessories.
TCE ships thousands of these products every day from its fourNorth American warehouses to Circuit City, the Good Guys, Sears,Target, and other major retailers. Many of these retailers havespecific shipping requirements. For instance, some want productson pallets; others, on slip-sheets. Some do not want the heightof a stack of product, including the wood pallet, to exceed 48inches.
In the past, TCE used a computerized system to generateshipping lists for a 48-foot container based on 80% utilizationof that container. Not considered were shipping constraints suchas the size, shape, or weight of products; the sizes of variousshipping containers; and stacking restrictions.
This middle-of-the-road approach was fine when TCE was justshipping VCRs, camcorders, and other small products. But withlarger products, the computer would maintain the 80% utilizationalthough the products might not all fit in the container. Forinstance, only one layer of 61-inch televisions loaded threeacross and eleven deep can fit in a typical trailer. Whenshipments involved large products, the warehouse often overrodethe computerized shipping list and rescheduled what did not fitin a container for a later shipment.
Then, four years ago, TCE implemented Virtual Loader whileupgrading its legacy system to the Yantra warehouse managementsystem (WMS) from Yantra Corp. In addition to its normal WMSfunctions, WMS*Yantra provides source data such as purchaseorders and manifests to Virtual Loader. Behind the scenes,Virtual Loader uses the ILOG Solver optimization engine from ILOGInc. to help generate improved loading plans.
ILOG Solver creates an object-oriented model of complex,multivariable, constrained problems, and then it solves thoseproblems. Loading a truck is just one example of a constrainedproblem in an enterprise. The loading model is based on a seriesof queuing, stacking, and packing algorithms that replicate howwarehouse personnel handle boxes and pallets. The model alsocontains general, TCE, and customer-specific rules andconstraints about packing into or onto something else. Forexample, Kevin George, TCE's project manager for WarehousingManagement System & Load Planning, says that when shipping apallet load of the Plexiglas shields that TCE sells for the frontof its home-projection televisions, "you must ship air above it."
Virtual Loader applies these algorithms to three high-levelobjects: the what-to-load object has physical characteristics,like dimensions and weight, as well as crush factors and stackingcharacteristics; the where-to-load object represents load spaces,such as a pallet or truck, and includes characteristics such asmaximum gross weight and axle location for a truck; thehow-to-load object represents operational constraints, such asnot splitting orders across pallets and not putting televisionson top of battery backs.
The Virtual Loader run produces an optimized 3-D load planthat details the location and orientation of every box to beshipped. Virtual Loader also identifies the correct size andnumber of trucks needed to fulfill the customer orders on hand.In addition, it lists the sequence to pick product from thewarehouse, thereby eliminating the time and space required tostage loads on docks before actual loading.
Other applications already provide some of these results. Forexample, a recently announced truck scheduling module from ROISystems Inc., developer of the Manage 2000 ERP system, can assignorders to trucks, optimize truck loads based on cube or weight,and generate pick loads in reverse stop sequence. Thisinformation, however, is presented alphanumerically. Butsimulation depicts graphical detail. For instance, AutoTruck fromAutoLogic Systems Ltd. uses AutoMod from AutoSimulations Inc. toshow on a computer screen the movement of products and materialhandling equipment throughout a warehouse. The AutoTruck model,which is created by filling in forms and providing basic pathlayout data, can then collect statistics about material handlingequipment cycle times, equipment use, and storage use. Furtherdevelopment on AutoTruck includes adding order picking and linksto WMS.
TCE runs Virtual Loader every 15 minutes to account forchanging customer orders. "We're maximizing our opportunities tomarry products and create better loads," explains George. VirtualLoader's output, he says, is used only some of the time; thewarehouse people can load and secure a container. But when atrailer is about 90% full, a picture proves helpful in loadingthe rest of the trailer.
How helpful is that picture Fewer products in a customerorder are being left behind because they do not fit in a trailer.Fewer products are being shipped by air. And TCE's shipping costshave dropped. For intra-company transfers (between manufacturingplant and distribution centers), shipping costs have droppedabout 10%; the costs to ship products to retailers, whereshipments smaller than truckloads are common, have dropped 3%.