Table Of ContentOptimization Tools for Logistics
Series Editor
Jean-Paul Bourrières
Optimization Tools
for Logistics
Jean-Michel Réveillac
First published 2015 in Great Britain and the United States by ISTE Press Ltd and Elsevier Ltd
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Foreword
In a society, where the fundamental role played by transport only occurs
to ordinary people when it does not work or works poorly, logistics is not
subject to prejudice. Citizens do not know the ins and outs of how it works
and in most cases barely know anything about it, understanding it to be
something vaguely related to the transportation and movement of goods.
Constituting a social representation about logistics would require developing
not only a view about the geographic division of work, but also creating an
awareness about the infinite consequences of the mass consumer system,
described by E. Durkheim1 as a total social phenomenon.
The term “logistics” covers the three fundamental dimensions of the flow
of goods encountered by all companies involved with goods manufacturing:
supply, flows within the enterprise – known as production management –
and distribution. Any movement – near or far – of people or goods requires
the consumption of space, time and energy. Understood as a general
discipline for the management of flows, logistics is strange in that its
effectiveness is inversely proportional to its visibility. The better it performs,
the less it is seen with both local and global economy players only becoming
interested in it when, for various reasons, it is unable to respond to the
complex problems it is asked to solve.
1 Emile Durkheim, 1858–1917, French professor of philosophy, considered to be the
founding father of modern sociology.
xiv Optimization Tools for Logistics
“Thought stems from action before becoming action once again,”2 stated
H. Wallon. If there is any universe where this quote is true, this is certainly
logistics. Logistics is to transportation and movement what thought is to
action. Though, as the section on the history of logistics in this book
demonstrates, militaries have for centuries thought about displacing their
armed corps, it was not until the second half of the last century and the
banalization – in Western societies – of movement, the advent of a global
division of work and a globalized mass consumer society that the
rationalized organization of flows was imposed as a discipline vital for the
productivity of firms. Named in accounts as an expense, most enterprises
involved in providing goods still equate it with loss. It is high time that it
becomes an asset.
Logistics is constituted from empirical knowledge which is modeled to
offer tools to rationalize movement. Each logistics concept or model is
immediately faced with the reality of being effective: change the shape of
the packaging of your product and we immediately change the
characteristics of the transportation. Change suppliers and we change supply
chain and storage techniques. Create a new product and we have to remodel
our own production chain.
We may face the task of delivering four packages to two different points.
Easy! But we may face the task of organizing the rounds of 140 drivers each of
whom have in their vehicle (some of which belong to our enterprise, some of
which are rented and some of which are subcontracted) over 10 tons of goods
divided into over 250 packages that are to be delivered to 50 different points.
Some of these delivery points may belong to the same client and be several tens
or hundreds of kilometers apart. And so we find ourselves confronted with a
puzzle with over a million options. Cartesians would take the straight line and
lose time, space and money. Adopting the view of Pascal and modeling
management on uncertainty would be better. However, developing a systematic
and complex vision of the reality of flows and of their necessity to be really
effective requires going beyond the triviality of common sense.
Until the oil crises in 1970s, the demand for transport was increasing daily.
Consequently, there was little concern about vehicle fill rate, the pollution
caused, the global cost of stocks as long as the “trip” was profitable.
2 Henri Wallon, 1879–1962, French philosopher, psychologist and politician, “De l’acte à la
pensée”, 1942.
Foreword xv
At the beginning of the 21st Century conditions changed. In the
international context of sustainable transport, for reasons of productivity,
traceability, quality etc., it is no longer possible to ignore flow optimization,
to be unaware of logistics. Knowledge accumulated by logisticians has to be
shared, distributed, made common knowledge so that transport can be seen
as a fundamental part of sustainable development and an inescapable
dimension of the profitability of production. A product can only be called
complete when it is available to who needs it: making this product available,
logistics is an integral and inescapable part of the industry.
Each and every trade of goods requires information to be exchanged
between the players concerned. Nowadays, industry players have to find the
best match between geospace – territories and infrastructure – and
cyberspace – the virtual word of data exchange.
Logistics is everywhere all the time. Certainly not everything is logistics
but there is logistics in everything. However, knowledge about logistics is
currently only shared between specialists. The aim of this book is to give
meaning to, explain the modeling that is the result of the knowledge
accumulated by logisticians and to find real applications for it. Containing
countless graphs and images, this book is not merely a collection of decision
support techniques: its aim is to bring the knowledge to a wider audience, an
audience beyond the experts. My friend Jean Michel RÉVEILLAC has in this
book purposefully reduced the number of long mathematical demonstrations
to make flow management modeling understandable and favor operational
research.
Logistics seeks the best match between all the coercive systems involved
with movement so as to transform it into accessibility. And this must no
longer be improvised because ultimately, in enterprises, it is humans who
decide the actions of other humans.
Pascal MAUNY
Director of the IUT of Chalon sur Saône
University of Burgundy
August 2015
About This Book
Countless books have been written about logistics, operational research,
decision support, graph theory, dynamic programming and so on, but very
few have brought together all these domains to present a synthetic view
which distances itself from aspects of pure mathematics, though without
neglecting it completely, while offering lots of practical exercises.
The majority of the tasks presented in this book can be worked out with a
simple calculator, a sheet of paper and a pen or with classic bureaucratic
tools such as spreadsheets, or more specialist tools such as project managers
and flow simulators.
The techniques presented and their domains of use are many and I am
sure that a student, logistician, developer, technician, engineer, computer
scientist, decision maker and you, dear reader, will find unexpected practical
applications for them in your professional and even personal life.
Target audience
This book is aimed at anyone facing logistical problems related to flow
management, decision-making, route or round optimization, meeting an
objective when faced with multiple constraints, the creation of dashboards
and relevant simulations, etc.
The tasks in this book require a minimum level of mathematical
knowledge: a second year student reading science or economics should not
encounter any major difficulties. I have tried to keep things simple and get
xviii Optimization Tools for Logistics
straight to the point when it comes to theory and not concern myself with
long, seemingly unnecessary demonstrations.
For the practical exercises, on a microcomputer, a good knowledge of the
operating system (path, folders and directories, files, names, extensions,
copy, displacement, etc.) is essential.
Lots of the tasks use a spreadsheet and so you will need to be able to use
the basic features of this type of software competently. A basic knowledge of
how to use pivot table type data handling tools is also beneficial.
If you are a follower of the visual basic application (VBA) language or
one of its equivalents, you will be able to fully understand, improve, enrich
and create new solutions to certain problems.
Finally, if you know the foundations of database management systems
and relational algebra then you will be completely at ease in all the domains
we will cover.
The organization and content of the book
This book is divided into two broad parts which have different aims.
The introduction and Chapters 1–8 discuss theory.
They present in turn:
– an approach to logistics;
– an overview of operational research;
– the foundations of graph theory;
– calculating optimal routes;
– dynamic programming;
– planning and scheduling with PERT and MPM;
– calculating flows in a network;
– spanning trees and rounds;
– linear programming.
About This Book xix
This first part contains the fundamental concepts required to understand
the remaining chapters in the book. Countless examples are presented
alongside the theory and each chapter closes with a series of exercises and
their solutions.
Chapters 9–13 focus on calculating different exercises using different
software, respectively:
– a presentation of the different software for O.R. and logistics;
– operational research with a spreadsheet;
– dashboards with a spreadsheet and pivot tables;
– scheduling and planning with a project manager;
– simulating computer flows.
Each chapter centers around a number of examples built using classic
(such as spreadsheets) or more specific software.
The conclusion, as its name suggests, attempts to assess the current state
of logistics, its tools and future development.
Appendices 1 and 2 provide some additional information. They detail, in
turn:
– installing a solver in Microsoft Excel;
– the table of the normal centered reduced law.
To follow up what was presented above, the bibliography contains a list
of internet sites.
There is also a glossary to explain certain acronyms and terminology
specific to logistics and operational research.
Conventions
This book uses the following typographic conventions:
– italics is used for quotations, mathematical terms, comments, equations,
expressions or variables or theorems presented in the theoretical and
practical chapters in the examples and exercises;
xx Optimization Tools for Logistics
– (italics) are terms in a foreign language;
– CAPITALS are used for names of windows, icons, buttons, folders or
directories, menus or sub-menus. They are also used for the elements,
options or commands in the window of a program.
– bold is used for important terms the first time they are used in the text.
These terms are generally found in the glossary at the end of the book.
– The notes are indicated by the keyword: NOTE. They are used for
important comments to add to the explanations already provided.
– courier font is used for lines of VBA code. These lines may end in
the symbol ↵, which indicates a soft return.
All the figures and tables have a key to help readers interpret them.
Vocabulary and definitions
As is the case for all techniques, optimization tools for logistics have
their own vocabulary. These words, acronyms, abbreviations and proper
nouns may not always be familiar to readers. Please refer to the
aforementioned glossary.
Thanks
I would like to particularly thank the team at ISTE Press and my editor
Chantal Ménascé who trusted me. I extend my thanks to my very dear friend,
Pascal Mauny, Director of the IUT of Chalon en Saône and Lecturer at the
University of Bourgogne, for his time, attention and listening skills and for
writing the Foreword to the book.
I would finally like to thank my wife, Vanna, who has supported me
throughout the time I was writing this book.
