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Cruise Control

03.02.2003
Von Richard Pastore

No, John's already short of drivers for Cincinnati. Robinson could keep checking, but he can't afford the time. He eats the empty miles and shifts his attention North, to Chicago.

Actually, Con-Way's line-haul dispatch job is even more complicated than the image drawn so far. For example, Robinson's working with only 85 percent of the day's freight orders. The rest come seeping in while he's wrangling his route plan. And an ice storm he hasn't yet heard about may shut down one of his cities, throwing another monkey wrench into his plans.

This complexity is the primary reason Enterprise Value Award winner Con-Way Transportation Services, which operates Con-Way Central, Western, Southern and Canada Express, decided back in 1996 that it needed to automate Robinson's job. The result of this decision, coming after two years of painful development and another two years of deliberately slow deployment, is the line-haul automation system. Each afternoon, this expert system dutifully digests on average 80,000 customer pickup orders and change requests. Its optimization model plots delivery across all the service centers and determines which shipments should be loaded on which truck - all this in seven minutes flat. The incremental efficiencies generated have repaid the $3 million investment within the first two years.

Even without that kind of hard-dollar return, Con-Way would have funded the project simply because it could not sustain the status quote stressful dispatch position was difficult to fill and had a learning curve as long as 18 months. The procedures and business rules the dispatchers followed were undocumented, making the company uncomfortably dependent on the knowledge in the dispatchers' heads. A line-haul automation system with an optimization model at its heart would get the job done faster and more consistently, letting dispatchers use their time to troubleshoot problems that could jeopardize on-time delivery. And Con-Way would be able to extend its cutoff time for overnight shipment requests, letting customers submit orders, when necessary, right up until the end of the business day - a competitive advantage, since businesses would rather not have to arrange their activities around shippers' schedules.

Adapting a System, Not a Business Model

In 1996, Con-Way Central's then Line-haul Director John Labrie contacted a University of Michigan academic consulting group to explore the possibilities of an expert system. While FedEx and other companies have had route optimization models for overnight flights, the kind of technology that applied to less-than-full-truckload line-haul was still largely the stuff of university labs. Con-Way quickly discovered that the university group and other outside developers would require the company to modify its fairly unusual business model to suit the system. Con-Way plans all delivery routes from the origin site of the shipment, rather than using a hub-and-spoke model, and all its drivers go home at the end of their daily shift. "The alternatives all required us to change, and we knew our model worked very well and was critical to our competitiveness," says Douglas W. Stotlar, Con-Way Transportation's executive vice president and COO.

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