Procter & Gamble is a global consumer products company. It has more than 20 global brands with annual sales of US$1 billion to more than US$10 billion and many more with sales of $500 million to $1 billion. It operates on a massive global scale manufacturing, distributing and marketing a wide variety of different product types – most of them well known in the home.
Since our formation, Orbit Systems has been working with our US partner Transportation | Warehouse Optimization to develop intelligent systems. Together we help P&G find innovative ways to deal with challenging business issues and solve complex operational problems to reduce costs and improve efficiencies. In this case study P&G asked Orbit Systems to develop software to allocate palletised items to semi-trailers for road transport.
Another complex problem – and another Orbit solution – AutoO2.
P&G has many different types of products and factories. On one side of town might be a factory which produces shampoos and on the other a factory that makes nappies (diapers). Each of those factories will have its own warehouse.
A supermarket customer may order products from both factories. For a company the size of P&G the way that semi-trailers are loaded with different products for distribution could make a difference of millions of dollars a year in cost efficiencies.
Consider a trailer that is loaded only with pallets of shampoo – this trailer might reach its legal axle weight limit before the total space available can be filled up. In this case the trailer has ‘weighed out’ and can’t take any more freight even although there is still space available.
Now consider another trailer loaded only with pallets of nappies. In this case the total space in the trailer will be filled up well before the legal axle weight limit has been reached – the trailer has ‘cubed out’ and can’t fit any more freight even although it could legally carry a heavier load.
The question for P&G was how to make sure that the load for every semi-trailer was configured to reduce the number of truck movements required to move the same amount of goods.
So what is a full load? For Orbit Systems a semi-trailer is only full when it is BOTH ‘cubed out’ AND ‘weighed out’.
To develop a model capable of calculating the configuration for every truck every day involves a number of complex factors including different trailer sizes and types, axle weight limits, priority items, item crush limits and item groupings, locations and destinations.
Our objective was to solve the maximum load for each trailer. Because of the wide range of conditions (priority items, different trailers, different products, load out dates, pallet size, crushability, load stability, etc) the complexity was too great to come up with a mathematical solution. So we based our approach on knowing the weight and volume of everything that needed to be loaded. With that knowledge we could calculate a theoretical solution for the minimum number of trailers required.
The methods we used to solve the problem were:
The final solution was the development of a software package called AutoO2.
AutoO2 saves millions of dollars a year. It does so by optimising trailer load-outs to mix heavy items with light and big items with small. It calculates the number of trailers needed each day to dispatch all ‘must-go that day’ items and then fills the available load space with other consignments.
Other systems that Orbit Systems has developed for Procter & Gamble include:
In a publicity statement P&G estimated savings from AutoScheduler of US$4 million per year at one site alone. AutoScheduler is currently installed in over 20 sites in the USA, Canada, Asia, the UK and mainland Europe.
SpaceSaver typically frees up between 5% and 10% of warehouse space when it is first run, though we have seen results of over 15% in some warehouses.