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The Indispensable Role of Management Science in Centralizing Freight Operations at Reynolds Metals Company

Author

Listed:
  • E. William Moore

    (Management Sciences, Reynolds Metals Company, 6601 W. Broad Street, Richmond, Virginia 23261-7003)

  • Janice M. Warmke

    (Management Sciences, Reynolds Metals Company, 6601 W. Broad Street, Richmond, Virginia 23261-7003)

  • Lonny R. Gorban

    (Management Sciences, Reynolds Metals Company, 6601 W. Broad Street, Richmond, Virginia 23261-7003)

Abstract

In October 1988, the Reynolds Metals Company centralized interstate truckload freight operations. Reynolds' over-200 plants, warehouses, and suppliers no longer dispatch their own shipments to some 200 van and flatbed carriers of their choosing. Instead, they communicate daily shipments to central dispatch at the company's headquarters in Richmond, Virginia. There shipments are assigned to one of 14 premium-quality carriers through a comprehensive automated dispatching system. The Reynolds management sciences department built mixed integer programming and simulation models of central dispatch operations that transportation used to select and deploy carriers. To support daily freight operations, it built on-line dispatching models to help dispatchers route freight by the best service alternative at the lowest cost. Central dispatch has improved on-time delivery of shipments and reduced annual freight costs by over $7 million.

Suggested Citation

  • E. William Moore & Janice M. Warmke & Lonny R. Gorban, 1991. "The Indispensable Role of Management Science in Centralizing Freight Operations at Reynolds Metals Company," Interfaces, INFORMS, vol. 21(1), pages 107-129, February.
    • Handle: RePEc:inm:orinte:v:21:y:1991:i:1:p:107-129
    DOI: 10.1287/inte.21.1.107
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    Cited by:

    1. Waiman Cheung & Lawrence C. Leung & Y. M. Wong, 2001. "Strategic Service Network Design for DHL Hong Kong," Interfaces, INFORMS, vol. 31(4), pages 1-14, August.
    2. Agrell, Per J. & Lundin, Johan & Norrman, Andreas, 2017. "Supply Chain Management: Horizontal carrier coordination through cooperative governance structures," International Journal of Production Economics, Elsevier, vol. 194(C), pages 59-72.
    3. Elendner, Thomas & Femerling, R., 2003. "Allocation of in-house services: Experimental comparison of allocation mechanisms," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 577, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    4. Klose, Andreas & Drexl, Andreas, 2001. "Combinatorial optimisation problems of the assignment type and a partitioning approach," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 545, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    5. Peter C. Bell & Chris K. Anderson & Stephen P. Kaiser, 2003. "Strategic Operations Research and the Edelman Prize Finalist Applications 1989--1998," Operations Research, INFORMS, vol. 51(1), pages 17-31, February.
    6. Yossi Sheffi, 2004. "Combinatorial Auctions in the Procurement of Transportation Services," Interfaces, INFORMS, vol. 34(4), pages 245-252, August.
    7. Peter C. Bell & Chris K. Anderson, 2002. "In Search of Strategic Operations Research/Management Science," Interfaces, INFORMS, vol. 32(2), pages 28-40, April.
    8. Ozlem Ergun & Gultekin Kuyzu & Martin Savelsbergh, 2007. "Reducing Truckload Transportation Costs Through Collaboration," Transportation Science, INFORMS, vol. 41(2), pages 206-221, May.
    9. Dellbrügge, Marius & Brilka, Tim & Kreuz, Felix & Clausen, Uwe, 2022. "Auction design in strategic freight procurement," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Jahn, Carlos & Blecker, Thorsten & Ringle, Christian M. (ed.), Changing Tides: The New Role of Resilience and Sustainability in Logistics and Supply Chain Management – Innovative Approaches for the Shift to a New , volume 33, pages 295-325, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    10. Alex Scott & Chris Parker & Christopher W. Craighead, 2017. "Service Refusals in Supply Chains: Drivers and Deterrents of Freight Rejection," Transportation Science, INFORMS, vol. 51(4), pages 1086-1101, November.
    11. Y Guo & A Lim & B Rodrigues & Y Zhu, 2006. "Carrier assignment models in transportation procurement," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(12), pages 1472-1481, December.
    12. Elendner, Thomas, 2003. "Scheduling and combinatorial auctions: Lagrangean relaxation-based bonds for the WJISP," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 570, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    13. Mesa-Arango, Rodrigo & Ukkusuri, Satish V., 2013. "Benefits of in-vehicle consolidation in less than truckload freight transportation operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 60(C), pages 113-125.
    14. Okan Örsan Özener & Özlem Ergun & Martin Savelsbergh, 2011. "Lane-Exchange Mechanisms for Truckload Carrier Collaboration," Transportation Science, INFORMS, vol. 45(1), pages 1-17, February.
    15. Okan Örsan Özener & Özlem Ergun, 2008. "Allocating Costs in a Collaborative Transportation Procurement Network," Transportation Science, INFORMS, vol. 42(2), pages 146-165, May.
    16. Mesa-Arango, Rodrigo & Ukkusuri, Satish V., 2014. "Attributes driving the selection of trucking services and the quantification of the shipper’s willingness to pay," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 142-158.

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