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Transportation GuruVehicle Route Optimization

LLamasoft OverviewOptimize their end-to-end supply chain operationsReduce corporate risk and identify major cost savingsPerform continuous what-if analysis The global leader in supply chain design technology & solution servicesFocused 100% on supply chain modeling & scenario analysisHeadquartered in Ann Arbor, MI with support centers around the worldWe are:We enable companies to:

2012 LLamasoft, Inc. All Rights ReservedSample CustomersAutomotive / Industrial ManufacturingConsumer GoodsDefense Hi-Tech / ElectronicsFoodBeverageLife SciencesGroceryLogisticsApparelManufacturingPetroleumPublic HealthRetailChemical

2012 LLamasoft, Inc. All Rights ReservedTechnology

2012 LLamasoft, Inc. All Rights Reserved

Supply Chain GuruA Complete Supply Chain Design Platform5An Intuitive User Interface for complete control of Supply Chain Modeling and Design ActivityA Supply Chain Intelligence Database with reference data, and pre-configured data connectorsA Design Engine containing multiple integrated solvers, operations research algorithms, and simulation enginesVehicle Route Optimization

EnterpriseSimulationInventoryOptimization

NetworkOptimization

2012 LLamasoft, Inc. All Rights ReservedFour Components of a Comprehensive Design Solution6Facility LocationsCustomer AssignmentsMode SelectionNetwork ValidationCustomer Service Operational MetricsOptimal Transportation RoutesInbound shipment consolidationOutbound shipment consolidationSafety StockService vs. InventoryReplenishment FrequencyInventoryOptimizationSimulationVehicle Route OptimizationNetworkOptimization 2012 LLamasoft, Inc. All Rights Reserved6Transportation GuruCreating Multi-Stop Vehicle RoutesVehicle route optimization (VRO) that creates multi-stop vehicle routes

Uses optimization to design routes for: Inbound ConsolidationOutbound ConsolidationPeriodic Shipment BalancingContinuous Moves BackhaulContinuous Moves Interleaved Shipments*Asset Planning*

Fully integrated within Supply Chain Guru7Transportation OptimizationDetermine optimal multi-stop routes using detailed cost models

* Coming soon! 2012 LLamasoft, Inc. All Rights Reserved-Inbound Consolidation: Consolidation of goods from multiple suppliers to warehouse-Outbound Consolidation: Consolidation of deliveries from distribution centers to retail stores-Periodic Shipment Balancing: Regular balanced deliveries across a fixed weekly schedule-Continuous Moves Backhaul: Take advantage of empty miles by optimizing pickups after last delivery is made on outbound route-Continuous Moves Interleaved Shipments: Interleaved pick-ups and drop-offs within cohesive routes-Asset Planning: Balance optimizing fleet size while finding good routes

7Network Optimization vs. Vehicle Route Optimization

Network OptimizationUses point-to-point lanes and simplified cost modelsVehicle Route OptimizationDetermine optimal multi-stop routes using detailed cost models 2012 LLamasoft, Inc. All Rights ReservedNetwork Optimization vs. Vehicle Route Optimization9Network OptimizationDesign supply chain network using point-to-point lanes and simplified cost modelsVehicle Route OptimizationDetermine optimal routes for inbound and outbound shipment consolidation

2012 LLamasoft, Inc. All Rights ReservedMission of Transportation Guru10 2012 LLamasoft, Inc. All Rights ReservedTransportation Design Questions How should I consolidate shipments to build multi-stop routes?Should we ship direct from the vendor or go through the DC?How much savings will I see if I optimize my baseline existing routes?Are there backhaul opportunities?How do my routes change with low, average, and high volume shipment levels throughout the year?Are there network synergies? Opportunities to consolidate transportation systems among business units?How do route costs compare to LTL and parcel costs?Should we consider a 3PL in addition to our private fleet?How do I balance my shipments across a weekly schedule?What is my allocated route cost by shipment?How do I balance my facility costs versus transportation costs?How do I balance my drivers workloads?

Transportation Guru Data Flows12ShipmentsTransportation AssetsAsset AvailabilitySitesInvalid ShipmentsDelivered ShipmentsUnroutable ShipmentsRoute SummaryStop DetailsInputs (Required)OutputsBusiness Hours* Valid SchedulesInputs (Optional)* Periodic VRP OnlyVehicleRoutePlanningRelationship ConstraintsTransit OverrideRateSegments 2012 LLamasoft, Inc. All Rights ReservedExample VRP Parameters and ConstraintsShipmentsDelivery and pickup time windowsPriorityFixed and variable loading/unloading timeBusiness hoursRoad distance & transit time calculations via PC*Miler, ESRI, BingAssetsCapacity: Weight, Cube, UnitsSecond compartment capacityDOT Hours of ServiceMax stops, distance, time, waiting time per routeMax distance between stopsRound trip or one-wayRatesPer distance, stop charges, fuel surcharges, min charge, discounts, driver hourly, service unit costStep functions: banded mileage, first stop freeLocation based rates: origin, last destination, farthest destinationCompare LTL/Parcel rates SMC3 RateWare XL, FedEx, UPS integrationRelationship ConstraintsPrevent products from shipping togetherForce products on certain assetsPrevent assets at certain locationsPrevent certain shipments being combinedForce certain assets with lift gate to locations 2012 LLamasoft, Inc. All Rights Reserved13Transportation Guru Software Demonstration

2012 LLamasoft, Inc. All Rights ReservedAlgorithm Overviews 2012 LLamasoft, Inc. All Rights ReservedStandard Inbound or OutboundUtilizing Standard VRP Optimization There are many ways to apply standard VRP optimization technology. Here are just a few examples:Instead of running LTL lanes, multi-stop vehicle routes can be run to reduce overall costsOptimize existing baseline routes to identify better shipment consolidation and route sequencesCreate high, average, and low volume routes to address seasonality shipment volume shiftsAdjust transportation constraints to identify how route structure changesDetermine how Department of Transportation (DOT) regulation changes affect route structure

2012 LLamasoft, Inc. All Rights ReservedPeriodic Vehicle Route OptimizationUtilizing Periodic VRP Optimization There are many ways to apply periodic VRP optimization technology. Here are just a few examples:Identify frequency of deliveries or pickups balancing contract requirements and transportation costsDetermine delivery or pickup schedule for all locations while considering transportation system constraintsBalance shipment schedule throughout the week

2012 LLamasoft, Inc. All Rights ReservedContinuous Moves Backhaul Optimization

Utilizing Backhaul Optimization There are many ways to apply backhaul optimization technology. Here are just a few examples:Retailers can pick-up returns from stores following deliveries and bring them back to the DCFollowing deliveries to retail stores, trucks can pick up materials from suppliers and bring to warehouse3PL or carriers can make deliveries and then fulfill pick-up requests on the way back Direct store delivery trucks can pick up empties or expired goods following store deliveries 2012 LLamasoft, Inc. All Rights ReservedContinuous Moves Interleaved Shipments OptimizationUtilizing Continuous Moves Interleaved VRP Optimization There are many ways to apply Interleaved VRP optimization technology. Here are just a few examples:Retailers can create routes that move product between storesWarehouses can transition inventory to other facilities with inter-facility routesNew product and returns can be considered on one route3PLs can consider delivery and pickup requests during a single route

2012 LLamasoft, Inc. All Rights ReservedAsset Planning OptimizationUtilizing Asset Planning VRP Optimization There are many ways to apply Asset Planning VRP optimization technology. Here are just a few examples:Determine optimal private fleet sizeUtilize optimization parameter to identify how many assets are needed to run optimal routesMinimize private fleet and 3PL carrier assetsConsider which 3PL carriers to use in addition to private fleet

2012 LLamasoft, Inc. All Rights ReservedTransportation Guru Use Cases 2012 LLamasoft, Inc. All Rights ReservedTransportation Guru Customer Use Cases 2012 LLamasoft, Inc. All Rights ReservedLast Mile Delivery Company

2012 LLamasoft, Inc. All Rights Reserved

Large Petroleum Company

2012 LLamasoft, Inc. All Rights Reserved>$20B Large U.S. Grocery Wholesaler

2012 LLamasoft, Inc. All Rights ReservedTanzania Medicine Delivery

2012 LLamasoft, Inc. All Rights Reserved DataModelLocalCloudCorporateConnect, Transform, Publish

ERP/BW/APO

HANA

DataModelLocalCloudCorporate

ERP/BW/APO

HANA

2012 LLamasoft, Inc. All Rights ReservedGeneral comment I think its okay to think about what a typical flow might look like and not necessarily represent all things that can be done at each step of the process.

SAP Data SourcesSAP APO (Automated Planning and Optimization)SAP DP (Demand Planning)SAP ERP (Enterprise Resource Planning)SAP BW (Business Warehouse)

27Master DataRate DataTMSLLamasoft IntegrationTMSLLamasoft Transportation Guru

Shipment TransactionsRevised Business Rules/DesignWhat-if?What if we add a new DC?What if we change carriers?What if we extend delivery windows? 2012 LLamasoft, Inc. All Rights Reserved28