Archive for the ‘Transportation’ Category

Value to weight ratio

This ratio determines parts of the distribution network. It is possible to have a centralized system (in case there is a low value to weight) and a decentralized system (in case there is a low value to weight).

The furniture is a product with a value to volume ratio terribly low and transporting its really expensive. Then suppliers use to install close to their customers. If you manage to increase the value to volume ratio you will be able to design centralized warehousing.


On this product there are full of empty spaces, so it was really expensive to transport (this is not square):


But the new one is different and it is possible to disassemble the hypopotamus. So transportation costs reduce a lot.


Categories: Transportation

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:

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: