Optimization of transport and logistics

Transport optimization is a broad term used to describe all of the processes aimed at improving the situation of parties involved in transportation (i.e. senders, recipients, and workers). When talking about the optimization of transport and forwarding, one often assumes that it is about minimizing transportation costs, and – sometimes – about the optimization of delivery time. But in reality, it is a multi-criteria problem that also includes less popular criteria such as comfort, satisfaction of the recipients of goods, the quality of transport services, as well as ecology and road wear. Most, however, focus on the two most obvious factors, namely cost and time.

The logistics processes can be seen from the strategic and operational perspectives. In the first case, we think about a long-term plan and a forward-looking vision of the company, while the operational perspective focuses on the current situation, and possibly on the state of transportation in the near future. Both aspects of optimization should be supported by a system that aids in the management of logistics.

Talking about optimizing logistics – and even limiting ourselves to the minimization of costs – we mean a whole range of activities involving a complete supply chain. Above all, the key is to build an efficient distribution network. This includes identifying the location of customers and their needs (possibly changing over time), and the optimal placement of distribution centers, distribution terminals and warehouses. Equally important is the selection of the appropriate fleet (the balance between one's own and external fleet, the size of the vehicles and their capabilities, such as cargo space, additional equipment: hoists, cranes, refrigerators), because an improperly adjusted fleet can significantly reduce the potential of a transport company. During the optimization of logistics, it is also possible to analyze various scenarios of product flow and the global identification of bottlenecks and factors limiting the profit of the company.

Basic steps mentioned in the paragraph above allow one to reduce costs of aggregated storage and transport (though not necessarily both of these factors at the same time). These steps are important elements of logistics optimization, but do not contain the element which is commonly associated first with the optimization of transport – namely the optimization of routes. This shows that route optimization is not the only part of the optimization of transportation, but it is so important that it will be described in a separate article.

The advantage of using systems that optimize transport and logistics such as OptiFacility is that the use of computational methods and artificial intelligence techniques enables an objective, global view of the problem and the simultaneous optimization of all dependencies, where a human usually fails. The advantage is also the formalization of relationships, organization of data, data conversion and storage in a digital form, as well as standardization of logistics processes and the associated consolidation of transport (combining small shipments into larger portions, pallets, containers). Standardization of logistics processes can reduce the cost of both small and large orders, and often helps increase the reliability of the supply, the flexibility of the distribution system, the quality of customer service and therefore increases the competitiveness of a company on the market.