Let’s Keep Truckin’ Along…

Classic transportation problems abound for traditional over-the-road trucking enterprises as well as private fleets. No matter the type of enterprise, fleet tracking software closes the feedback loop for shippers, carriers and private fleets across internal and external organizations. This feedback loop allows managers and leaders in transportation to respond proactively and reactively to the needs of their customers. 

This or That….

Now to define a transportation problem type, let’s play a little game of “This or That.” Generally, no matter your business type or model, businesses fall into common high-level buckets that allow for defining transportation problem types. These buckets allow analysts to partition problem sets into manageable task sets. Additionally, by defining problem sets, analysts apply similar algorithm sets, best-practices, industry-standards and individual learning, which would be impossible if you are unable to define common problem types at the onset. Understanding these four common transportation problem types will assist even the most novice transportation manager or logistics analyst to become a pro!

Visibility of Transportation Problem Type 1

Operational or Analytical Model

The first problem type separates the transportation problem 

between strategic, future problems and real-world tactical problems. Analytical models focus on bid proposals, private fleet analytics, transportation engineering and infrastructure design problems, whereas operational problems encompass the more tactical, daily concerns of your average dispatch office.

Analytical transportation problem exploration involves the organization or a team to define the problem, define the scope of solution and apply various algorithm or variable sets to decide the least costly move-forward plan while still ensuring customer service metrics. Typically, analytical problems require experts to draw various models intended to provide management with insightful knowledge or provide decision assistance.

Regarding route tracking software, analytical problem types require data model validation with actuals. Comparing these actuals allows analysts to ‘tune-up’ their data as well as revisit service standards to create more powerful working models for future exploration.

Operational problems fall into the problem bucket which is exactly the opposite of analytical problems. Here, transportation problems are discrete, falling into clear scope and time frame, such as parcel fleets deciding on tomorrow's transportation plan to meet fulfillment requirements. Typically, operational problems center on disrupted daily activities, such as varying demand planning, product availability, staffing and weather exceptions. Managers and analysts include those at a typical dispatch office. Here, dispatch offices rely heavily on truck tracking systems to gather the real-time data for responding to maintenance failures, other critical exceptions or to ensure plan-vs-actual attainment.

Visibility of Transportation Problem Type 2

Operational - Fixed or Dynamic Model

Fixed routing is a loose industry term that applies to companies that create route packages that do not change from day to day or week to week. This includes business models where customers need to plan around deliveries. These include retail deliveries, food service deliveries, and grocery store deliveries. The data schema requirements for fixed routing is typically more demanding than that of the dynamic delivery models due to ERP requirements: Users and analysts need to match an existing transportation answer based on historical or pre-defined parameters. Moreover, the transportation problem moves from a “what are we going to do” to answer demand to a “how are we going to meet” demand of customers due to the fixed nature of the problem set.

Dynamic routing problems are typically more streamlined from a data management perspective when defined from the ERP, but can be incredibly complex when it comes to finding an optimal, stable solution. In dynamic routing, demand planning, geography, customer expectations and even freight class or types can vary so greatly that clear-cut answers are few and far between. More complex and demanding algorithm sets with powerful hardware may need to be applied to this problem set in order to work through the best possible scenario while meeting transportation requirements. Dynamic routing requires reliance more heavily on route tracking systems to ensure service standards.

Visibility of Transportation Problem Type 3

Operational - Orders vs. Non-Order Model

This problem bucket sounds almost like a non-issue. What should transportation care if the problem set users an “orders” convention or not? The answer is a little less obvious than anticipated as it again deals with data schema and requirements. Typically, ERP or back office systems that require an “order” to be created are more well-defined than ERPs or back office systems that do not require orders. “Orders” data can creates a grounding or leveling to even potentially complex data schema by requiring specific relational data elements to be defined. Typically, these data elements are very friendly to transportation problems and allow for easy analysis of the problem-type and solution set.

Now, how can anyone get anything done without an ‘order’ for tracking? Isn’t everything an order? Well, yes and no. Service industries such as lawn service, pest control or waste management companies do not require order data for servicing your account. To them, customers are static, requiring services on a recurring basis. These service frequencies can vary widely, from daily to yearly, and ERP data can be sparse in terms of defining the transportation problem. In these cases, algorithm sets designed to manage service frequencies without ‘orders’ are required to properly define the problem-space for solution generation. These algorithms take basic data elements and extrapolate additional transportation detail to create a working model or solution.

Often I am surprised to find the service companies do not employ fleet tracking software within their operations. Failing to adopt current route tracking technology creates a data or information gap that can directly impact customers, drivers, and an enterprises operating revenue.

Visibility of Transportation Problem Type 4

Operational - Known vs. Changing Customer Model

Knowing your destination is something we all take for granted. Surprisingly, determining the destination can be a difficult exercise in the transportation space. Companies that have well-defined destinations, such as the USPS in terms of home addresses, have a very straightforward process to work from transportation problem to transportation plan. Typically, geocoding has been pre-batched and destinations are predefined.

Freight companies have a less than straight-forward time with discerning destinations. Here, defining shipper, consignee, freight-forwarder, cross-dock or ship-to all have the potential to disrupt operations. Why is it difficult to define a destination? For one, requests come into freight companies across various service-request methods and each method could potentially be missing key detail or have incorrect information for a destination. Furthermore, addresses may be new to the freight company, requiring geocoding or reverse-geocoding, potentially of each request. Without a known customer landscape, freight companies have to continually be mindful of inaccuracies in requests and respond real-time to minimize costly disruption to service.

As you can imagine, truck tracking software is much more critical for the changing customer model as it provides a system-of-record to apply to future transactions or to scrub for data previously unknown.

The Take-Away

No matter the transportation model, understanding problem types as well as utilizing route tracking software will aid fleets to analyze performance, ensuring the highest level of customer service, all the while reducing cost to attain margin goals. At TMW, we’re ready to help you. Speak with a TMW representative this week.