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Consumers Energy Company:Optimizing logistics transportation routing and scheduling
Salim Al-Shatel, Jacob Magnusson, Madison Miller, Anthony Polinori, Ben SchultzMonday April 20, 2015
Project Recap● Consumers Energy Internal
Logistics System○ 40 Company Customer Service
Centers (CSCs)○ 3 Material Distribution Centers
(MDCs)■ Currently do not have a standard
transportation routing system.○ Goal:
■ Find the transportation routes that can provide the highest level of service and cost efficiency
■ Maximize efficiency in Total Miles, Overall Cost, and Fuel Consumption.
Approach
Current Plan Overview● No Standardized
Operating Procedure● Jackson - HV, Gas,
Electric● Saginaw - Gas, Electric● Grand Rapids - Electric● Drop and Ship non-stock
items● Drivers load and unload
trucks
Plan 1 Overview● 3 MDC
○ 4 Days a Week ○ 10 Hour Days○ 1 Route per Day
Comparison Plan-1
Total Weekly Miles 6,499.90
Estimated Weekly Gas Expenses $1,639.42
FLEX Routes 2
Weekly Customer Service Center Visits 75
Total Weekly Routes 77
Flex Route Percentage 2.60%
Average Gas Cost Per Trip $21.29
Scheduled Driving hours 360
Plan 2 Overview● 3 MDC
○ 4 Days a Week ○ 10 Hour Days○ 2 Routes per Day
Comparison Plan-2
Total Weekly Miles 12,967.50
Estimated Weekly Gas Expenses $3,270.69
FLEX Routes 18
Weekly Customer Service Center Visits 119
Total Weekly Routes 137
Flex Route Percentage 13.14%
Average Gas Cost Per Trip $23.87
Scheduled Driving hours 720
Plan 3 Overview
Comparison Plan-3
Total Weekly Miles 8,119.90
Estimated Weekly Gas Expenses $2,048.02
FLEX Routes 11
Weekly Customer Service Center Visits 75
Total Weekly Routes 86
Flex Route Percentage 12.79%
Average Gas Cost Per Trip $23.81
Scheduled Driving hours 360
● 3 MDC ○ 5 Days a Week ○ 8 Hour Days○ 1 Route per Day
Plan 4 Overview● 3 MDC
○ 4 Days a Week ○ 10 Hour Days○ 1 Route per Day○ 1 New Truck for more deliveries
Comparison Plan-4
Total Weekly Miles 7,219.90
Estimated Weekly Gas Expenses $1,821.02
FLEX Routes 6
Weekly Customer Service Center Visits 75
Total Weekly Routes 81
Flex Route Percentage 7.41%
Average Gas Cost Per Trip $22.48
Scheduled Driving hours 400
Plan 5 Overview● 1 MDC
○ 4 Days a Week ○ 10 Hour Days○ 1 Route per Day
Comparison Plan-5
Total Weekly Miles 8,578.60
Estimated Weekly Gas Expenses $2,163.71
FLEX Routes 4
Weekly Customer Service Center Visits 64
Total Weekly Routes 68
Flex Route Percentage 5.88%
Average Gas Cost Per Trip $31.82
Scheduled Driving hours 360
Plan 6 Overview● 1 MDC
○ 5 Days a Week ○ 8 Hour Days○ 1 Route per Day
Comparison Plan-6
Total Weekly Miles 10,720.60
Estimated Weekly Gas Expenses $2,703.97
FLEX Routes 13
Weekly Customer Service Center Visits 64
Total Weekly Routes 77
Flex Route Percentage 16.88%
Average Gas Cost Per Trip $35.12
Scheduled Driving hours 360
Total Weekly Miles Analysis
Total Weekly Miles Analysis● Plan 1 is simple and is similar
representation of current situation.
● Plan 2 has increased miles from increasing service levels.
● Plan 3 adds an extra delivery day
● Plan 4 adds truck to mix for greater service levels.
● Plans 5 and 6 are 1 MDC systems which creates longer individual routes
Flex Route Analysis
Flex Route Analysis● Plan 1 is relatively static● Plan 2 offers most flexibility● Plan 3 offers increased flexibility with
additional day● Plan 4 adds truck to improve all 3
Distribution Centers flexibility● Plans 5 and 6 offer reduced problems
with having a single Distribution Center
Average Miles per trip Analysis
12 Month Average Fuel Price Chart
Weekly Fuel Cost Analysis
Weekly Fuel Cost Analysis
● Fuel costs are based on 12 month average retail price in Michigan
● Plan 1 offers lowest fuel cost
● Plan 2 is roughly double in Fuel costs
● 1 Distribution Center Plans have higher fuel costs
Average Fuel Cost per trip Analysis
Average Fuel Cost per trip Analysis
● The per trip averages are roughly the same for 3 Distribution Centers
● Per trip averages increase with having 1 Distribution Center
Scheduled Driving Hours Analysis
Scheduled Driving Hours Analysis
● Plan 2 has highest staff usage
● Plan 4 has slightly higher staff usage from additional truck
● Equal Inputs allows for better comparison
Summary of Solutions
ComparisonPlan-1 (3 MDC-4 days-10 hrs)
Plan-2 (3 MDC-4 days-10 hrs-2 routes a day)
Plan-3 (3 MDC-5 days-8 hrs)
Plan-4 (3 MDC-4 days-10 hrs-Additional Tractor)
Plan-5 (1 MDC-4 days-10 hrs)
Plan-6 (1 MDC-5 days-8 hrs) Plan-Current
Total Weekly Miles 6,499.90 12,967.50 8,119.90 7,219.90 8,578.60 10,720.60 8,263.00
Estimated Weekly Gas Expenses $1,639.42 $3,270.69 $2,048.02 $1,821.02 $2,163.71 $2,703.97 $2,084.11
FLEX Routes 2 18 11 6 4 13 0
Weekly Customer Service Center Visits 75 119 75 75 64 64 64
Total Weekly Routes 77 137 86 81 68 77 64
Flex Route Percentage 2.60% 13.14% 12.79% 7.41% 5.88% 16.88% 0.00%
Average Gas Cost Per Trip $21.29 $23.87 $23.81 $22.48 $31.82 $35.12 $32.56
Scheduled Driving hours 360 720 360 400 360 360 360
Average Miles/Trip 84.414 94.653 94.417 89.135 126.156 139.229 129.109
What is an AHP Analysis?● Analytic Hierarchy Process
○ a technique used to analyze complex decisions incorporating mathematics and psychology
● Developed by Thomas Saaty in the 1970’s
● Variables included○ Overall Cost○ Flexibility○ Mileage○ Service○ Staffing
● Ex. How much more important is overall cost compared to flexibility?
AHP Analysis
Recommendation - Plan 3● Based on the AHP Analysis, we
recommend Plan 3● Increases site visits by 34%
compared to current plan● Allows 11 flex routes / week● Decreases miles traveled ● Adds a 5th delivery day to
handle emergencies● Keeps driving hours at the
minimum of 360 hours per week● With current weighting of
variables Plan 3 is the best choice
ComparisonPlan-3 (3 MDC-5 days-8 hrs) Plan-Current
Total Miles 405,995.00 413,150.00
Estimated Gas Expenses $102,400.96 $104,205.61
Total Routes 4300 3200
Flex Route Percentage 12.79% 0.00%
Scheduled Driving hours 18000 18000
Comparison ImprovementTotal Miles 7,155 Mile Reduction
Estimated Gas Expenses Save $1,804.65 in Fuel costs alone
Total Routes Increase visits by 1,100
Flex Route Percentage Additional 12.79% Flexibility
Scheduled Driving hours Equal Staffing Hours
Recommendation - Plan 1● Based on overall cost
savings, we recommend Plan 1
● Most efficient in terms of miles driven and driving hours
● This leads to the greatest cost savings
● Reduction in fuel costs● Reduction in driver hours
ComparisonPlan-1 (3 MDC-4 days-10 hrs) Plan-Current
Total Miles 324,995 413,150Estimated Gas Expenses $81,971 $104,200Average Gas Cost Per Trip $21.29 $32.56Scheduled Driving hours 18,000 18,000Average Miles/Trip 84.41 129.11
Comparison ImprovementTotal Miles 88,155 Mile Reduction
Estimated Gas ExpensesSave $22,234.65 in fuel costs alone
Average Gas Cost Per Trip Save $11.27 in fuel per tripScheduled Driving hours Equal Staffing Hours
Average Miles/TripReduced on average 44.7 miles per trip
Recommendation - Plan 2● Based on flex route percentage,
we recommend Plan 2● Has the largest total number of
weekly visits● More than double current plan● Will allow Jackson highest
degree of flexibility in dealing with emergency situations
● Also, allows for highest degree of communication with CSCs because of increased site visits
ComparisonPlan-2 (3 MDC-4 days-10 hrs-2 routes a day) Plan-Current
FLEX Routes 18 0
Weekly Customer Service Center Visits 119 64
Total Weekly Routes 137 64
Flex Route Percentage 13.14% 0.00%
Comparison ImprovementFLEX Routes Additional 18 per weekWeekly Customer Service Center Visits Increase Service 55 stops per weekTotal Weekly Routes Additional 73 route per weekFlex Route Percentage 13.14% Flex Route improvement
Questions?