Supply Chain Rounding to Efficient Transportation Quantities
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Solution Overview
Problem
Current supply chain management methods often result in inefficient transportation costs due to the shipment of individual pieces or smaller lots, which are more costly per unit, as they typically round net demands to the nearest whole unit without considering more efficient packaging quantities.
Innovation Solution
A method is introduced to calculate a tolerance interval around requested quantities for each target location, allowing for rounding to efficient transportation quantities by utilizing higher pack stages, thereby reducing handling and transportation costs. This involves defining a tolerance interval that permits overshipping or undershipping within specified percentage or absolute limits, ensuring that shipping quantities align with available pack stages for efficient distribution.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If net demand is rounded to the nearest whole unit, then deployment decisions are simple to make, but transportation costs increase due to smaller shipment lots
Solution Approach 1:
The patent changes the rounding parameter from 'nearest whole unit' to 'efficient transportation quantity' which is determined by pack stage multiples. This parameter change allows shipments to be rounded to quantities that optimize transportation efficiency (such as pallet loads or container capacities) while still maintaining simple automated deployment decisions through computer-based calculation.
Solution Approach 2:
The system dynamically determines rounding quantities based on available pack stages and transportation requirements rather than using a fixed rounding rule. The computer calculates optimal rounded quantities that adapt to different product types, transportation modes, and pack stage configurations, making the system flexible while maintaining operational simplicity.
2Measurement precision
If individual pieces or smaller lots are shipped, then precise demand fulfillment is achieved, but per unit transportation costs increase
Solution Approach 1:
The patent applies partial rounding where quantities are rounded to efficient pack stage multiples when this reduces transportation costs, while still fulfilling demand within acceptable parameters. The system may occasionally ship slightly more than precisely calculated demand (excessive action) when it allows consolidation into efficient shipment lots, accepting minor over-shipment as a trade-off for significant transportation cost reductions.
3Productivity
If higher pack stages are used for rounding, then transportation efficiency improves, but flexibility in meeting exact demand decreases
Solution Approach 1:
The patent segments the demand fulfillment process into multiple levels: exact demand calculation, tolerance interval determination, and pack stage-based rounding. This segmentation allows the system to maintain flexibility in the calculation phase while achieving efficiency in the execution phase through standardized pack stage multiples, effectively separating the adaptive planning from the standardized execution.
Data Source
AI summary
A method and apparatus to efficiently round requested quantities to efficient transportation quantities in the supply chain. Target locations are organized in a sequence. A tolerance interval around the requested quantity is calculated for each target location. The requested value is then rounded to an efficient transportation quantity for each target location in its sequential order.