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Viewpoints on the Air Podcast #7: Integrated Route Planning & Load Building

Podcasts | By Adrian Gonzalez • 11/19/2013

Last year, I wrote about how Walmart improved the efficiency of its private fleet by almost 69 percent in 2011 compared to its 2005 baseline. How did Walmart do it? By increasing its pallets per trailer and better managing its routes (among other things).

Bobby Miller_ORTEC_Web Large — Bobby Miller, Global Chief Strategist, Consumer Goods, ORTEC

Obviously, companies can achieve great benefits via better route planning and load building. However, from my perspective, many companies treat route planning and load building as two distinct, separate steps in the transportation management process. Could companies achieve even greater value if they were to take a more holistic and integrated approach?

In this Viewpoints on the Air podcast, I discuss that question and others related to integrated route planning and load building with Bobby Miller, Global Chief Strategist, Consumer Goods at ORTEC. Bobby brings a unique perspective to this topic. He not only works on the technology side of things, he was also a shipper himself, having worked at Georgia-Pacific, Kraft, and other companies, so he understands from first-hand experience the challenges shippers face every day on the frontlines.

Last week, ORTEC issued a press release highlighting one of its customers, Molson Coors Canada, and how the company is taking an integrated approach to routing, pallet building, and truck loading. I asked Bobby about this case study, and here’s an excerpt of what he said:

[Molson Coors Canada’s] business challenges were focused on the fact that they had all of these legacy systems that had been built over the years for delivery planning…so what they wanted to do was to build an integrated solution that could provide for all the capabilities necessary to deliver to over 17,000 customers in Quebec alone. So, [they wanted] to improve routing and dispatching, and they wanted routing and dispatching to be part of their SAP framework, as well as load building and territory planning.

For more insights on this topic and the case study, listen to my conversation with Bobby below. Then post a comment and share your viewpoint on this topic.

Guest Commentary: Predictive Replenishment and How It Optimizes Global Supply Chains

Guest Commentary | By Bobby Miller and Pat Smith • 10/17/2013

Leading consumer goods companies are adopting a breakthrough methodology, Predictive Replenishment, which generates value by integrating strategic, tactical and operational processes. This supply chain planning approach encompasses three functional areas:

Strategic: Supply Chain Network Design that continuously adapts and links products flows to downstream processes
Tactical: Demand Sensing and Inventory Optimization that predicts customer requirements based on market-driven demand signals and POS data
Operational: Order Fulfillment and Transportation Planning that can create perfect orders and shipments

Each of these functions contributes to overall supply chain planning and optimization. However, they are often disparate, with little to no visibility from one function to another. Leading consumer goods companies are boosting business performance by linking these individual, functional silos into a single cohesive methodology. By doing this, they are maximizing supply chain processes and uniquely positioning their business to manage and improve “total cost to serve.” This optimization is called Predictive Replenishment.

Creating Opportunity from the Top Supply Chain Obstacles

A 2012 analyst firm survey of supply chain executives indicates the discontinuity within the optimization and planning processes. It also highlights the opportunity to link these processes to achieve and sustain a new level of supply chain and business value creation. What do companies say is their top obstacle to achieving their supply chain goals? According to the survey, the top four obstacles are:

1. Forecast accuracy and demand variability – It’s not just about trying to get the best possible forecast, but to simultaneously characterize the variability at the item/location level of detail. Forecast will never be perfect, so how we understand variability becomes key to driving an inventory policy that will deliver service goals.

2. Inability to coordinate and synchronize end-to-end Supply Chain processes – Too many conflicting KPIs. For example, manufacturing is incentivized to maximize assets (long runs and few changeovers), but logistics and distribution are focused on inventory turns/reduction and optimizing transportation cost. Finding equilibrium – to work towards the right trade-off to accelerate business performance – is doable if everyone is focused on the same metrics of service, inventory and profitability.

3. Lack of visibility across the supply chain – The biggest opportunity with the fastest return is the propagation of the demand signal with the understanding of the variability properties to improve the signal given to both manufacturing and transportation processes. Ideally, work with the lowest level of demand granularity to build your foundation (daily ship-to or POS).

4. Supply Chain Network complexity – You either have too much push in your distribution networks (you push manufacturing lots out to the network without a detailed understanding of how to split that lot so inventory is at the right place in the network to deliver service) or too many tiers where double handling and freight cost hinder gross margin and inventory turns. By leveraging network design along with a bottom-up statistical forecasting approach, you can improve your supply chain visibility and reduce network complexity.

An optimized supply chain delivers $ (source: ORTEC)

Predictive Replenishment is about integrating and synchronizing the strategic, tactical and operational functions to accomplish four goals:

1. Foster Collaborative Decision Making: The decision making process is often done in silos within an organization. However, making decisions that are collaborative across functions creates a bidirectional flow of information. This creates more controllable business outcomes.

2. Create an “Outside-In” Approach: Moving from a mindset of “what are we going to make today” to “what are we going to sell today” is often called an “Outside-In” approach to demand management. It takes advantage of demand streams, such as order lines, store-level POS data, or customer warehouse data to provide visibility into future demand.

3. Reduce Latency in the Planning Process: Reducing the amount of planning time and increasing the frequency of high quality decision-making helps improve customer satisfaction, asset utilization, profitability and cost (i.e., transportation, inventory and trade promotion).

4. Smooth the Transition from Strategic to Operational Planning: Synchronizing upstream and downstream functions (technologies and processes) allows planning and execution to converge. As noted earlier, providing an integrated demand signal and propagating it across the value chain gives visibility to logistics, manufacturing and the customer-facing team to deliver the best service at the most effective cost structure, while accounting for known constraints of lead-time and capacity (both manufacturing and transportation). Taking a more proactive vs. reactive approach to planning removes time delays and demand signal discontinuity for each stakeholder in the organization.

Companies can achieve the following sustainable business benefits by accomplishing these four goals are:

30%+ improvement in forecast accuracy
20%+ efficiency with inventory investment
5-10% transportation spend savings
1% + increase in revenue
1% point in margin growth

Reaping the benefits of Predictive Replenishment.

The following chart summarizes how Predictive Replenishment helps organizations achieve business goals.

Take a crawl, walk, run approach to starting the Predictive Replenishment journey. This not only builds capabilities (both technical and business process), but creates sustainable momentum for accelerating business performance. Consider the following to start your journey:

Crawl: Understand and leverage your data. Leverage demand signals that you have access to today in your ERP, but perhaps don’t utilize to improve your forecast. Look for a solution to augment your current forecasting that can do a detailed bottom-up approach to understand variability and how to improve the disaggregation of your forecasting process. Consider how demand sensing technology can help identify and improve the signal vs. noise ratio to enhance short-term forecast accuracy.

Walk: Multi-echelon inventory optimization (MEIO) is an opportunity that can deliver great benefits when paired with an improved forecasting and demand sensing process. The goal of MEIO is to deliver service levels against the business objective (typically least cost of inventory). Within 6 to 12 months, companies can demonstrate benefits in both service and inventory by leveraging technology and business process that allows the coupling of the crawl and walk phases.

Run: Bring supply chain design and flow path optimization into the tactical decision making process. This is about taking the macro picture (e.g. cost-to-serve) and translating that into tactical. When leveraged with MEIO, flow path optimization and operational planning will deliver margin maximization and enhanced service level performance. If there is a lack in skill set or technology, outsource it. Costs are reasonable and the insights gained by working with the right vendor and consulting experts will pay for itself many times over.

Bobby Miller is Global Chief Strategist, Consumer Goods at ORTEC. Bobby pioneered the innovative ORTEC solution ‘Perfect Shipment’ which utilizes demand forecasting to generate optimal shipments, enabling organizations to plan and reduce freight cost in advance of execution. He has over 25 years of expertise working in the Consumer Goods Industry and developing supply chain software solutions that help companies globally such as P&G , General Mills, Coca-Cola and Clorox. Prior to ORTEC, Bobby was Sr. Manager of Supply Chain Excellence for Georgia-Pacific, where he pioneered the concept of sales order load optimization. He has also held various positions with Kraft, Coopers Lighting, Information Resources, IRI Logistics and Manugistics. Bobby received a B.S. degree in Information Systems from Chicago State University. He is currently chairman of the Technology Association of Georgia Logistics Society.

Pat Smith is the managing director of ToolsGroup North America. Mr. Smith brings more than twenty years of sales and management experience including four at ToolsGroup. Previously he held senior roles at companies ranging from Consumer Packaged Goods leaders such as Pillsbury PLC (acquired by General Mills) to software companies such as Optiant (acquired by Logility), Park City Group and Marketron. Mr. Smith holds a BS in Business Management from Providence College.

Guest Commentary: Thirsty for DSD Efficiency? Issues and Answers

Consumer Packaged Goods (CPG) | By Bobby Miller • 06/13/2013

The beverage business has become much more complex, dynamic and fragmented over the last five years. One of the reasons why is consumer taste buds are changing in both developed and emerging markets. The result is a dizzying plethora of choices to quench every thirst, from hundreds of craft beers to Chinese colas to a seemingly endless stream of flavored energy drinks.

According to a recently published survey, “Global Beverage Survey 2013-2014: Market Trends, Buyer Spend and Procurement Strategies in the Global Beverage Industry, the following are some key market issues and trends:

Global beverage manufacturers consider China, India, and Brazil to offer the largest growth potential among emerging markets in 2013-2014.
Pressure on margins, volatility and increase in input costs, and regulatory changes are immediate business concerns.
The top three expected key changes in business structure are: improving operational efficiency, adding new products and services and expanding in emerging markets.

In the United States, the number one challenge is keeping inventory in-stock. Direct Store Delivery (DSD) business models currently average 98.2% in-stock. If beverage companies can optimize DSD with an integrated planning and execution solution, they will have the opportunity to synchronize the salesperson, the merchandiser, and the delivery truck in the most efficient manner possible.

Complexities and Challenges
According to a Grocery Manufacturers Association study, the activity that takes the most time away from working the shelf is associates waiting to receive product at the store. There are many challenges associated with DSD, including:

Balancing DSD territory assets against customer demand fluctuations.
Underutilized fleet assets.
Improving collaboration of sales, operations, planning, execution and the retailer.
Compliance of store visits by sales and merchandisers, as well as delivery routes.
Inaccurate fill rates due to unique promotional driven pallet configurations required by the retailer.

And among the complexities…

The move from static routes to dynamic routes creates a new set of business process changes.
In-stock replenishments depend on harmonious synchronization between Sales and Operations.
Getting retailers to share point-of-sale (POS) data.

How to Handle DSD Logistics Challenges
DSD networks bypass the retailer/wholesaler distribution network moving goods directly from the point of production/distribution to the stores. Managing this process efficiently also requires a fully integrated DSD planning and execution platform.

Many beverage companies today use legacy routing and load building systems, in many cases, manual systems. Most of the beverage industry leaders – including Coca-Cola, Heineken, Molson Coors, and Carlsberg – use an ERP system known for its ability to support Consumer Good companies that are distribution-intensive in nature. They addressed the “white spaces” for DSD by embedding a best-of-breed solution that operates natively within their ERP solution, without any interfaces, and uses the ERP’s master data.

The companies referenced above have modernized business strategies and processes that make them global DSD leaders for beverage. Their businesses depend on “delivering beverage,” but behind the scenes, there are numerous logistical and operational challenges that they must address. These companies wanted to leverage their ERP ecosystem to plan truly efficient routes, build customer delivery loads with mixed-pallet configurations, and build fully-utilized delivery trucks. With their embedded DSD solution, they can identify optimal territory networks to improve customer service levels; simultaneously generate optimal next day planned routes and loads; and execute accurate case pick using voice picking to allow for a seamless flow of business data through their ERP.

Quenching the Thirst for DSD Efficiency
DSD businesses are very complex given the nature of delivering direct to the point of sales. Beverage companies make 10-20 deliveries on a given route and require compliance for on-time delivery. Lost sales due to out-of-stock situations can cause a beverage company to loss shelf space given the margins retailers manage to. Improving in-stock levels using an integrated platform is the value attained. Improving labor efficiencies in this business model is crucial because synchronization from sales order intake, to merchandising the shelf, to delivery requires true collaboration and accuracy between internal parties on an integrated platform. For global beverage companies, using technology to fill the “white spaces” has led to a reduction in miles driven, ensured that sales territories are defined to enable optimal delivery frequency, increased efficiencies in trailer utilization, and reduced load planning time and order delivery accuracy. Leaders in the beverage industry have chosen to address the complexities of DSD head-on by investing in technology that improves operational efficiency and preserves their market leadership in an increasingly competitive global marketplace.

Bobby Miller is Global CPG Strategist at ORTEC. Bobby pioneered the innovative ORTEC solution ‘Perfect Shipment’ which utilizes demand forecasting to generate optimal shipments, enabling organizations to plan and reduce freight cost in advance of execution. He has over 25 years of expertise working in the Consumer Goods Industry and developing supply chain software solutions that help companies globally such as P&G , General Mills, Coca-Cola and Clorox. Prior to ORTEC, Bobby was Sr. Manager of Supply Chain Excellence for Georgia-Pacific, where he pioneered the concept of sales order load optimization. He has also held various positions with Kraft, Coopers Lighting, Information Resources, IRI Logistics and Manugistics. Bobby received a B.S. degree in Information Systems from Chicago State University. He is currently chairman of the Technology Association of Georgia Logistics Society.

Walmart’s New Solution for Outbound Routing and Load Building

Private Fleet | By Steve Banker • 04/29/2013

Any time Walmart speaks about what it is doing in logistics, I’ll listen. In March, Steve Simpson, Senior Manager of Transportation Technology at Walmart, participated in a webinar on how Walmart is optimizing outbound loads through its implementation of ORTEC‘s routing and load-building solutions (ORTEC is a Logistics Viewpoints sponsor).

A couple of caveats need to be made here. Walmart is not using ORTEC across its entire transportation network; it is using this solution to support multi-stop outbound perishable loads to its grocery stores. Where possible, the routing includes backhaul stops at supplier locations.

Secondly, Walmart did not report its ROI from this specific project. Steve did say, however, that the company saved 4 million gallons of diesel fuel by driving 28 million fewer miles while carrying 65 million more cases. However, Walmart has many improvement projects going on simultaneously. While the ORTEC solution surely contributed to those results, there is no way to know the extent of that contribution.

What makes the ORTEC solution special is that the routing and load-building problems are not solved in isolation. In other words, it is possible to build fuller trailers, but if that results in trucks travelling too many miles, those trailer-building savings are illusory. Further, it is possible to build a multi-stop route that minimizes overall route mileage, but if trucks are only half full, that is also not optimal. The ORTEC system provides the optimal low cost solution by solving both problems simultaneously.

What I found oddly encouraging is that even Walmart, a company famed for its use of technology, had a few hiccups during the implementation. The most interesting was a cultural issue. Walmart has historically hammered into its associates the need to build full trucks. And Walmart has for years measured the associates on how well they have done this. Now the optimal solution may be a truck less full than the planner is comfortable with, but which nevertheless optimizes savings. Basically, if a planner adds a stop just so he can add another 100 pounds to the truck, there is a good chance that is not the optimal solution.

Secondly, in the supply chain execution area, it is very common to hear that inaccurate item, case, and pallet weight and dimensional data is a key factor in delaying projects — the “garbage in, garbage out” problem. This was also true for Walmart, something I found surprising.

In conclusion, this was quite a coup for ORTEC. It is very, very difficult for software vendors to get Walmart to speak publicly about how it is using technology to improve its supply chain. Also, Walmart has, and deserves, a reputation for having one of the best supply chains in the world.

Guest Commentary: Catch the “Big Fish” Savings by Optimizing Orders Upstream!

Consumer Packaged Goods (CPG) | By Bobby Miller • 03/14/2013

Many Consumer Goods companies today are wasting too much time and resources trying to figure how to consolidate orders manually or with their transportation management systems (TMS). The order management process requirements from big-box retailers such as Walmart, Target and others is critical, particularly since they can make up more than 50 to 60 percent of a CPG company’s revenue. Freight costs and the ever-increasing demands from retailers on inventory levels continue to put pressure on Consumer Goods manufacturers to consolidate orders to fully maximize both store shelves and truck load levels.

Day in the Life Challenge (Fishing Without the Proper Bait)
Today, the Consumer Goods customer service rep manages consolidated orders using spreadsheets, emails and traditional TMS order consolidation capabilities. Here is an overview of the typical process:

Order management receives multiple orders from a retailer covering multiple categories.
After the initial order is received, the customer service team continues to wait for additional orders, based on retailer directed policy, that will consolidate multiple orders into a single shipment.

Other possible constraints/policies include:

The retailer may also provide information regarding the purchase order group number to ensure the orders sent are consolidated together to make up a delivery.
The retailer may provide a specific time that orders must be delivered.
The retailers may provide a window of time (4 to 5 days) that the order must be received.

This process can be tedious and time consuming. In addition, the customer service rep may receive emails from their own internal buyer specifying additional orders to be sent to consolidate into one delivery.

All of these activities cause inefficiencies in the order management process and are manually intensive in today’s fast-moving, demand-driven world. More importantly, the opportunity to ensure optimal full truck loads is lost.

Optimize at Order Receipt Upstream to Catch the “Big Fish” Savings
Ideally, customer service processes in today’s market should be as automated as possible to ensure customer service levels are being met and are able to respond to the fast pace of retailer replenishment demands. TMS solutions have always been good at matching less-than-truckload (LTL) shipments either for multi-stop deliveries or even to the same delivery point. However, best-in-class order consolidation requires in-depth detail about the characteristics of the SKU, the quantity and the customer’s “ship to” location, which is why customer service reps spend more time than necessary building the shipment.

Therefore, the ideal time to solve this predicament is further upstream, at the time orders are received, preferably in your ERP system.

In this optimized scenario, the advanced order building capability identifies the freight savings for order consolidation at the point of order entry, rather than using spreadsheets to group orders and then execute capabilities downstream where the decision-making is too late. Companies can use optimization technology to identify the optimal orders that provide the best utilization of the shipment. This capability looks at each SKU’s dimensions, stackability rules, compatibility rules, TI-HI, pallet sizes, trailer dimensions, axle constraints, top loading rules, customer specific constraints and delivery date min/max window. If allowed, the automatic consolidations can even auto backfill if the truck is not full.

The outcome is automatic generation of the orders into one or more shipments respecting the retailer’s purchase order consolidation rules.

Optimization technology has traditionally been thought of as an enabler for strategic decisions such as network design, route planning, master planning scheduling and transportation carrier selection. Real-time “Perfect Shipment” decision-making requires fast performance given the amount of daily orders sent from a retailer. The optimization process, therefore, has to occur in seconds, not minutes to determine optimal combination of sales orders into a shipment.

What is the Value?
The benefits are “whale size” and easily quantifiable. First and foremost, by using optimization to perform order sizing at the time the order is received, the manufacturer can identify freight utilization savings by optimally combining orders shipping to the same location. Consumer goods manufacturers using this optimization approach have generated savings from 5 to 15 percent. Streamlining the order consolidation process reduces the time required to manually match orders using only tribal knowledge. And it allows customer service to spend more time servicing the customer, helping them manage inventory availability issues, for example, rather than grooming line items on orders in an effort to move, mix and match them in hopes of creating a good shipment with the time constraints laid out by the retailer.

Next generation optimization technology is available to capitalize on this opportunity. Further, this technology adoption is most commonly embedded, not just integrated, with an ERP system. IT resources are scarcer than ever, and the CIO and his team always prefer any solution that can leverage IT resources in this manner.

A few examples where leading consumer goods companies have innovated with this approach include:

Interplant replenishments to enable full truckload shipments.
Promotion orders to prioritize and combine with turn orders to ensure promotional demand is met on time, with full truckloads.
VMI replenishments (hundreds of SKUs) for both cube and weight opportunities.

Summary
Retailers are expected to continue to push Consumer Goods companies in terms of service level expectations and demand responsiveness. The “Big Fish” cost savings await manufacturers using optimization technology that resides directly into the lifeblood of the company, order management. This technology enabler (embedded within ERP) shifts the paradigm by providing decision making upstream where there is advance time to deliver full truck loads. If it’s outside the ERP system, you’re fishing without bait. Customer service also benefits through greater automation and significant increases in data intelligence and graphical order management/load visualization.

Bobby Miller is currently responsible for Product Innovation and Customer Experience at ORTEC. Bobby pioneered the innovative ORTEC solution ‘Perfect Shipment’ which utilizes demand forecasting to generate optimal shipments, enabling organizations to plan and reduce freight cost in advance of execution. He has over 25 years of expertise working in the Consumer Goods Industry and developing supply chain software solutions that help companies globally such as P&G , General Mills, Coca-Cola and Clorox. Prior to ORTEC, Bobby was Sr. Manager of Supply Chain Excellence for Georgia-Pacific, where he pioneered the concept of sales order load optimization. He has also held various positions with Kraft, Coopers Lighting, Information Resources, IRI Logistics and Manugistics. Bobby received a B.S. degree in Information Systems from Chicago State University. He is currently chairman of the Technology Association of Georgia Logistics Society.

TNT Express Reaps the Benefits of Operations Research

Business Intelligence | By Adrian Gonzalez • 12/12/2012

The important role of operations research in driving supply chain benefits was in full display at last month’s OPTIMUS 2012, ORTEC’s annual forum in Atlanta, GA. Many of the company’s key clients were there, including Walmart, Coca-Cola, General Mills, and Clorox. In the case of Coca-Cola, for example, the company has saved $500,000,000 in ten years through a variety of initiatives, including improved loading and routing of its 10,000 trucks (see “Coca-Cola Enterprises: Better Trucks, Happy Drivers, Lower Costs”). And in Walmart’s case, the company developed a hybrid solution for routing and load design, and expanded its network design to include its grocery unit, which resulted in a 69 percent improvement in its private fleet efficiency over its 2005 baseline.

But the case study that caught my attention the most was TNT Express, the winner of this year’s prestigious Franz Edelman Award, presented annually by the Institute for Operations Research and the Management Sciences (INFORMS) to “recognize and reward outstanding examples of operations research, management science and advanced analytics in practice in the world.” In the world of operations research, winning the Franz Edelman Award is like winning a gold medal at the Olympics, and TNT Express — with support from its partners ORTEC (a Logistics Viewpoints sponsor) and Tilburg University — was certainly a worthy winner for the success the company has achieved with its Global Optimisation (GO) Programme.

The GO Programme is a multi-faceted initiative TNT Express launched several years ago to achieve several goals: reduce unit costs; provide better service; enable better and faster fact-based decision making; and reduce CO2 emissions. The program not only involves the use of optimization solutions, but also the creation of Communities of Practice (cross-functional teams, including partners, that meet three times per year to identify, discuss, and exchange best practices and potential improvements) and employee training and education via its GO Academy.

TNT_GO_Programme_Overview — Source: TNT Express

Thanks to the GO Programme, TNT Express has realized more than €207 million (about $266 million) in cost savings and 283 million kg (about 300,000 tons) reduction in CO2 emissions from 2008-2011. The bulk of the savings has come from a variety of optimization tools, including:

ORTEC Shortrec for optimizing pick-up and delivery (PUD) operations, which has delivered €22 million in savings from 2008-2011;
TRANS for network planning, which has delivered €48 million in savings to date;
DELTA for calculating low-cost transportation schedules, which has saved TNT €132 million in four years;
MANPOWER for optimizing depot and warehouse resources, which has produced €5 million in savings.

You can get more details about the program at the TNT Express website, where the company has posted several videos and articles about it. But here are some of my key takeaways:

Start small and let success build upon success. The GO Programme started out with Marco Hendriks, Director Strategic Operations and Infrastructure at TNT Express, and his vision about “how operations research and mathematical modelling could add value to TNT.” Despite some “early skepticism about using ‘mathematics’ to improve our global operations,” Marco received approval to conduct a pilot project in Italy, and ORTEC and Tilburg University were selected as partners. “We resisted the tendency to build a sophisticated optimization model, instead starting with basic data analysis compiled from separate commercial, finance, and operations systems” explained Hein Fleuren, Professor in Operations Research at Tilburg University. Based on the insights from the analysis, the team identified and implemented changes that resulted in a 6.4 percent cost reduction. The success of this project led to other projects across Europe, which ultimately grew and evolved into the GO Programme.

Simply put, rather than starting with a grand vision and multi-year project outline, the best way to overcome skepticism, minimize risk, and win upper management support for investing in operations research is to keep it simple: start small, prove the value, and build out from there.

Ease of use is critical for technology adoption. Professor Fleuren sums it up nicely in one of the articles: “In all cases, these GO tools are the econometric models that are used to calculate the best optimization solutions. For TNT, they have to meet many different criteria. First, they have to be transportable so that they can be used in different countries, for different networks and even in other organizations. Secondly, and very importantly, despite the complexity of the models, their design has to be user friendly so that TNT’s employees — who are not mathematicians — can work with them effectively.”

This point underscores one of the key trends occurring in the enterprise software industry today: vendors are investing to simplify and improve their user interfaces, which is quickly becoming a competitive differentiator.

Technology is not enough; you must also invest in training and educating your employees. One of the most important components of the GO Programme is the GO Academy, a training program developed in partnership with Tilburg University and the TiasNimbas Business School. Here are some comments about it from TNT:

The main objective of the GO Academy is to train employees in optimization principles and broaden their views without turning them into mathematicians. The end result is the creation of a global network of talented staff that is able to standardize, identify, and implement solutions.

More than 200 employees from around the world have completed the two-year program, which includes six modules on topics such as infrastructure design, network planning, bottleneck theory, and change management techniques. Marie-Christine Lombard, the former CEO of TNT Express, put it best when she said, “The GO Academy is probably the best investment TNT ever made.”

Clearly, TNT Express understands the critical role of talent development, not only in maximizing the benefits of operations research, but also in creating a competitive advantage for the company. (For related commentary, see “The Most Significant Problem Facing 3PLs and Shippers”).

The bottom line: the bonds between operations research and supply chain management continue to strengthen, and companies that invest smartly in this area — not only in technology, but in talent development too — will gain the greatest benefits moving forward.

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