Title: OPTIMIZATION OF PARCEL LOGISTICS
1OPTIMIZATION OF PARCEL LOGISTICS
- ANDREJ LISEC
- University of Maribor
- Faculty of Logistics
- Email andrej.lisec_at_uni-mb.si
- ISEP 2007
2INTRODUCTION
- The Post of Slovenia has a leading position in
providing parcel services in Slovenia. The volume
of parcel flows between Posts is increasing
rapidly and it requires a new construction of the
postal network. A case for the area covered by
Ljubljana Postal Logistics Center is given, which
takes into consideration the sorting out and the
retaining of parcels in the Posts, Parcel Posts
and Regional Parcel Centers within their
individual areas.
3BASIC POSTAL PROBLEMS
- At companies, which are dealing with parcels, the
basic problem is - to determine the optimal number of Posts as hubs
patronizing separate areas (Regional Parcel
Centers), and to determine the location and the
size of hubs - to determine optimal fixed locations of Postal
Logistics Centers, patronizing Regional Parcel
Centers, location of Regional Parcel Centers,
patronizing Parcel Posts and Parcel Posts
patronizing area of inhabitants.
4IN ALL POSTS WE NEED TO ACHIEVE
- An effective collection and sorting of parcels
- A reliable delivery
- An effective transport.
5POSTAL HUB
- Postal hub is a special type of central facility,
which can act as transshipment point in postal
transportation systems with many origins and
destinations.
6INCREASING THE NUMBER OF PARCELS
- E-commerce influences the increase of parcel
services all over the world. How to satisfy this
demand properly? New technologies and modern
organization in postal services could improve a
design of postal systems and especially the
logistics of these systems.
7CASE OF INCREASING THE NUMBER OF PARCELS IN
SLOVENIA
8PRESENT AND FUTURE ORGANISATION OF SPATIAL POSTAL
HIERARCHY
- Central European regions are improving their
postal services. Also Post of Slovenia would like
to follow these efforts. The paper presents an
approach to the spatial optimization of postal
services, particularly as applicable to the Post
of Slovenia. - In Slovenia up to now two Postal Logistics
Centers (PLC) have been opened in last nine
years. We have made the evaluation of logistics
costs considering two instead of one PLC. - According to our research results proper capacity
and allocation of Regional Parcel Centers and
Parcel Posts should be carried out. In this case
the hierarchy would be the following - one or
two Postal Logistics Centers, - five or less
Regional Parcel Centers, each of them having
three to twelve Parcel Posts, the Parcel Posts
are patronizing twenty or less posts.
9MODELS FOR SOLVING POSTAL PROBLEMS
- The paper considers an optimal allocation of
modern Postal Logistics Centers in given spatial
structure of regional central places in Slovenia,
where the model of Bruns, A., presented in the
paper Restructuring of Swiss Parcel Delivery
Services, OR Spektrum, (2000), developed for
Post of Switzerland, has been applied and
extended to evaluate the second PLC in Maribor. - Ebery described the capacitated multiple
allocation for hub location problem. We are
upgrading his approach to evaluate the flows
between PLCs and Regional Parcel Centers (RPC)
patronizing given set of Parcel Posts (PP). In
our approach the number of chosen PPs can be
changed step by step, which depends on volume of
parcels coming from or going to a certain RPC per
day.
10APPLICATION OF THE BRUNS MODEL TO THE POST OF
SLOVENIA
- We have evaluated (the previously realized
decision) whether the second Postal Logistics
Center allocated in Maribor had been economically
justified in the chosen past moment. - The results are the Postal Logistics Center in
Maribor as an addition to the Ljubljana Postal
Logistics Center is acceptable if the fixed costs
of services at the Postal Logistics Center in
Maribor do not exceed a certain critical value
(2,78 times of fixed costs in PLC Ljubljana).
11POSTAL MODEL OF EBERY
- Ebery, J. et al. (2000) in the paper The
capacitated multiple allocation hub location
problem Formulations and algorithms in European
Journal of Operational Research, 120, have
formulated capacitated multiple allocation hub
location problem as -
- Here wij is the volume of the associated
traffic stream, cijkm is the cost of sending one
unit of traffic from i to j, via hubs k and m,
xijkm denotes the fraction of flow that is
directed from node i to j via hubs located at k
and m. fk is the fixed cost associated with the
open hub at node k. yk is defined by
12CONSTRAINTS OF EBERYS MODEL
- Equation ensures that the total flow from node i
to j is transferred - Intensity of flow from i to j through node k
does not exceed capacity of node k - (the same equation is valid also for
m) - Transfers only occur via hubs
-
and - is 0 or 1
- The variable has values between 0
and 1
13POSTS IN SLOVENIA
- In Slovenia there are
- now 557 posts. The
- flows of parcels are
- directed from post to
- post until the truck is fully
- loaded and then sent
- to PLC Ljubljana or PLC
- Maribor and back.
- Potential RPCs are not open yet, but could appear
in Regional Business - Units. They will patronize PP. Extended Eberys
model will allow direct - flows between RPCs in some cases.
- In all presented Regional Centers up to now only
regional administration is - located.
- The analysis shows that 4 level spatial hierarchy
would reduce the daily - logistics costs substantially.
14TEMPORARY FLOWS OF PARCELS IN SLOVENIA
15PROPOSED TRANSPORTATION NETWORK IN SLOVENIA AS
EXTENSION OF EBERYS MODEL
- With using the statistics of parcels in year
2003, 2004 and flows between posts in year 2005
we developed the new transportation network for
Post of Slovenia with Regional Parcel Centers and
Parcel Posts with criteria of 24 hour time window
delivery.
16AVERAGE DAILY NUMBER OF PARCELS COLLECTED INSIDE
THE REGIONS
17AVERAGE DAILY NUMBER OF PARCELS DELIVERED INSIDE
THE REGIONS
18EXTENSION OF EBERYS MODEL
- A short mathematical formalization of the problem
is as follows - There is only one-way.
- The intensity of the flow does not exceed the
capacity of nodes.
19DECISION VARIABLES
20OPTIMAL STRUCTURE OF REGIONAL PARCEL CENTERS
- 1002 Ljubljana and the Parcel Posts 1380
Cerknica, 1230 Domale, 1290 Grosuplje, 1241
Kamnik, 1330 Kocevje, 1270 Litija, 1370 Logatec,
1215 Medvode, 1310 Ribnica, 1420 Trbovlje, 1360
Vrhnika, 1410 Zagorje ob Savi - 4101 Kranj and the Parcel Posts 4270 Jesenice,
4240 Radovljica, 4220 kofja Loka, 4290 Tric - 5102 Nova Gorica and the Parcel Posts 5270
Ajdovcina, 5280 Idrija, 5220 Tolmin - 6104 Koper and Parcel Posts 6251 Ilirska
Bistrica, 6320 Portoro, 6230 Postojna, 6210
Seana and - 8101 Novo mesto and the Parcel Posts 8250
Breice, 8340 Crnomelj 8270 Krko, 8290 Sevnica
and 8210 Trebnje.
21FLOW OF PARCELS
22RESULTS
- The results show that the travelling distance has
been reduced by 32 per cent for the area that
covers 70 per cent of Slovenia, patronized by PLC
Ljubljana. - With a new transportation structure of sorting
out and the retaining of parcels in the Posts,
Parcel Posts and Regional Parcel Centres within
their individual areas, the transportation costs
can be reduced by 20 per cent.
23CONCLUSION
- We have evaluated whether the two existing Postal
Logistics Centers in Slovenia are optimally
located and have assessed the new transportation
structure of Regional Parcel Centers and Parcel
Posts. - The results show that the total transportation
costs could be reduced by 943.224,00 per year.