Archive for April, 2010

RFID and nanotechnology

Today we had a lecture about RFID. We were discussing difficulties that this technology is having to be widely spread. Many things were related with the necessity to attach the chip, the quality of the chip, where to locate the chip, etc. But, what happen if, for example, the whole box thanks to nanotechnology is covered with chips? What if you could print chips and antennas using nanotechnology? Thinking on that I’ve found interesting things related with nanosensors, nanotechnology ink that contains whole chips and antennas on it that can be used to print chips and antennas on boxes, products or whatever thing?

Categories: Uncategorized

CHEP equipement pooling system

CHEP stands for Commonwealth Handling Equipment Pool.

CHEP is the owner of every pallet. You save a lot of money of fuel because you don’t have to transport empty pallet. Instead of moving pallets they save the moving empty pallets. They are using RFID to check where the pallets are.

Here there is an interesting video from CHEP explaining how they are using radiofrequency in their own pallets:

Codification and communication

The reason for coding is to identify and to communicate. Communication can be made on different ways:

  • People with people
  • People with macines
  • Machines with machines
  • Products with products
  • Products with machines

The point is that barcodes permits communication between products and people, but RFID does not, they need additional information that can be read by a person.

Categories: Definitions

Fleet management

Sina and Janina made a presentation about fleet management. Fleet management comprises the target oriented, optimal planning, supervision and control of the fleet operations based on the availabe resources, considering internal and external influencing factors. A special focus is on the integration of organizational processes with modern information systems.

Fields of application:

  • Obcject tracking (vehicle tracking): where are they, are they moving…
  • Health and safety tracking: special important for police or ambulances.
  • Fuel and speed management: Can be controlled from a center.
  • Sales order transmission
  • Route planning
  • Driver management
  • Vehicle diagnostics


Route planning:

Serves to arrange different transport orders to tours of a vehicle fleet. There are different standard problems like:

  • Travelling salesman problem: Find the shortest way of a circular tour (starting point till end point) that is as cost effective as possible that visits a certain amount of customers exactly once.
  • Vehicle routing problem: is an extension of the travelling salesman problem which various vehicles are available at a depot.
  • Pickup and delivery problem: consignments are picked up at one place and transported to their destination.. Pick up locations and the destinations have to be in the same tour and a full truckload PDP is supposed. It’s similar to what some low cost airlines do like Ryan Air.

In route planning there are 2 approaches:

  • Dynamic route planning.
  • Static route planning.

Location tracking:

Controls supply chains and move products to the market faster. It is also necessary to monitor assets, prevent inventory loss and track vehicle fleets.

Companies must consider how to track inventory an a smaller area or across a wide area.

Related to tracking technologies there are different alternatives:

  • RFID: Local area and indoor tracking.
  • GPS: Signals received from satellites to track movements of objects moving great distances. A very interesting video about GPS can be found by clicking here.


  • Improve efficiency and productivity
  • Reduce operating costs
  • Speed up logistics activities
  • Transparency of all the transport events.
  • Automatical data transfer from the order entry system.
  • Optimal order distribution to the tours (cost, time and customer optimal).

This is a nice video about RFID:


Sonia Martín gave us an interesting presentation about Incoterms. First thing is that Incoterms is an abbrevaiation for International Commercial Terms, so it’s related with international transportation. The transaction agreement has to follow some rules that you should know and that are defined by the Incoterms.

Transportation is about you won something and give it to a third party on certain conditions. It takes some time and many things can happen during that period of time, for example, a change on price conditions. It’s also interesting to know that it also defines who is the owner of the product during the transport.

There are many different alternatives. It’s main characteristics are:

  • Does not cover transfer of ownership and property rights. It’s only about risk.
  • With international transaction its compulsory. Otherwise you will not be covered.
  • Define key elements of international contracts of sale.
  • Reflect the parties’ agreement to divide costs and risks between parties
  • Provide the buyer and seller instructions regarding the carriage and delivery of goods.
  • Can be used for purchasing parts both within the EU and outside the EU.

The following picture shows a transportation chain from moving the goods from a factory to another market.

Categories: Uncategorized

Using Kanban in Spanish Chemistries

The chemistry is fulled of products with a high value to weight (very expensive and low weight). They also have a large variety so the holding cost is terrible high: Low demand and high holding costs means that EOQ is low so you order one by one.

So chemistries needed a system to control their inventory and to accurately get provided. Then they decided to use Kanban. It consists on a set of cards related to each product. There was a card at the end of each stock there was a card at the end of each product. They get the cards and send it to the warehouse and move it back to the pharmacy. The card identifies both the medicament and the chemistry. Each product has its own card on the place where it is. With the card you do 2 things:

  • You communicate: You give it to your supplier
  • You control your inventory: You know when you need to reorder

The chemistry is visited every 4 hours by the supplier, getting the quantity of each product needed (according to the number of cards).

Nowadays the movement of the card is not necessary because of the use of the bar codes and internet. The system automatically knows what the chemistry sells and directly communicates with the warehouse.

Categories: Inventory control Tags:

Routing problems in transportation

April 10, 2010 2 comments

What is a routing problem?

According to Ann Campbell from University of Iowa, the objective of routing problems in transportation is “to minimize the distribution costs during the planning period without causing stockouts at any of the customers”.

The most general case can be modelized by the Vehicle routing problem that broadly speaking consists on:

  • Service a number of customers.
  • Fleet of vehicles
  • Looking for an optimal solution

It can be applied to several fields. In logistics, for instance, we could use it on invenvtory routing. This is an interesting case study of inventory routing:

“The Inventory Routing Problem (IRP) is concerned with the repeated distribution of a set of products from several facilities to a set of customers over a given planning horizon. The facilities produce these products at given rates and have ample storage capabilities for the products. The customers consume products at a given rate and have limited storage capabilities. A fleet of vehicles is available at each of the facilities as well as a set of drivers. The objective is to minimize the overall costs during the planning period.”

You can get the full case study including some data sheets by clicking here.

How can we solve a routing problem?

There are different ways to solve a routing problem, like:

Using graphs:

Using a graph is a very good way to represent this type of problems. Besides representing it graphically, there are other 2 interesting representations (Introduction to Algorithms Thomas H. Cormen, Charles E. Leiserson and Ronald L. Rivest):

  • As a collection of adjacency lists: It provides a compact way to represent sparse graphs (|E| is much less than |V|^2).
  • Adjacency matrix: It’s use when the graph is dense (|E| is close to |V|^2).

There is open source software to represent graphs. I like quite a lot one called Grafos. Regardless the webpage is in Spanish,  it’s quite good and simply to use. You can download it by clicking here.

General cases:

Routing vehicles:

Travel salesman problem:

Travel salesman with m routes:

Specific cases of the routing problem:

There are other interesting specific cases, like when you don’t know with certainty when planning customers loads demands. That one is called vehicle routing problem with stochastic demand. Here you can find some articles about this topic:

Read more…

Categories: Distribution Tags: , ,