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Reducing Logistics Costs at General Motors

Author

Listed:
  • Dennis E. Blumenfeld

    (Operating Systems Research Department, General Motors Research Laboratories, Warren, Michigan 48090)

  • Lawrence D. Burns

    (Operating Systems Research Department, General Motors Research Laboratories, Warren, Michigan 48090)

  • Carlos F. Daganzo

    (Department of Civil Engineering, University of California, Berkeley, California 94720)

  • Michael C. Frick

    (Operating Systems Research Department, General Motors Research Laboratories, Warren, Michigan 48090)

  • Randolph W. Hall

    (Department of Industrial Engineering and Operations Research, University of California, Berkeley, California 94720)

Abstract

Automobile and truck production at General Motors involves shipping a broad variety of materials, parts, and components from 20,000 supplier plants to over 160 GM plants. To help reduce logistics costs at GM, the decision tool TRANSPART was developed. In its initial application for GM's Delco Electronics Division, TRANSPART identified a 26 percent logistics cost savings opportunity ($2.9 million per year). Today, TRANSPART II---a commercial version of the tool---is being used in more than 40 GM plants.

Suggested Citation

  • Dennis E. Blumenfeld & Lawrence D. Burns & Carlos F. Daganzo & Michael C. Frick & Randolph W. Hall, 1987. "Reducing Logistics Costs at General Motors," Interfaces, INFORMS, vol. 17(1), pages 26-47, February.
    • Handle: RePEc:inm:orinte:v:17:y:1987:i:1:p:26-47
    DOI: 10.1287/inte.17.1.26
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    Citations

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    Cited by:

    1. Bertazzi, Luca & Moezi, Sarem Deilami & Maggioni, Francesca, 2021. "The value of integration of full container load, less than container load and air freight shipments in vendor–managed inventory systems," International Journal of Production Economics, Elsevier, vol. 241(C).
    2. Tobias Harks & Felix G. König & Jannik Matuschke & Alexander T. Richter & Jens Schulz, 2016. "An Integrated Approach to Tactical Transportation Planning in Logistics Networks," Transportation Science, INFORMS, vol. 50(2), pages 439-460, May.
    3. Eskigun, Erdem & Uzsoy, Reha & Preckel, Paul V. & Beaujon, George & Krishnan, Subramanian & Tew, Jeffrey D., 2005. "Outbound supply chain network design with mode selection, lead times and capacitated vehicle distribution centers," European Journal of Operational Research, Elsevier, vol. 165(1), pages 182-206, August.
    4. Cruijssen, F., 2006. "Horizontal cooperation in transport and logistics," Other publications TiSEM ab6dbe68-aebc-4b03-8eea-d, Tilburg University, School of Economics and Management.
    5. Baita, Flavio & Ukovich, Walter & Pesenti, Raffaele & Favaretto, Daniela, 1998. "Dynamic routing-and-inventory problems: a review," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(8), pages 585-598, November.
    6. Swenseth, Scott R. & Godfrey, Michael R., 2002. "Incorporating transportation costs into inventory replenishment decisions," International Journal of Production Economics, Elsevier, vol. 77(2), pages 113-130, May.
    7. Chen, Jing & Dong, Ming & Xu, Lei, 2018. "A perishable product shipment consolidation model considering freshness-keeping effort," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 56-86.
    8. Belieres, Simon & Hewitt, Mike & Jozefowiez, Nicolas & Semet, Frédéric, 2021. "A time-expanded network reduction matheuristic for the logistics service network design problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    9. Anna Franceschetti & Ola Jabali & Gilbert Laporte, 2017. "Continuous approximation models in freight distribution management," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(3), pages 413-433, October.
    10. Oded Berman & Qian Wang, 2006. "Inbound Logistic Planning: Minimizing Transportation and Inventory Cost," Transportation Science, INFORMS, vol. 40(3), pages 287-299, August.
    11. Chitsaz, Masoud & Cordeau, Jean-François & Jans, Raf, 2020. "A branch-and-cut algorithm for an assembly routing problem," European Journal of Operational Research, Elsevier, vol. 282(3), pages 896-910.
    12. Luca Bertazzi & Lap Mui Ann Chan, 2014. "Analysis of the Best Double Frequency Policy in the Single Link Problem with Discrete Shipping Times," Journal of Optimization Theory and Applications, Springer, vol. 163(1), pages 286-309, October.
    13. Larry J. LeBlanc & James A. Hill & Gregory W. Greenwell & Alexandre O. Czesnat, 2004. "Nu-kote’s Spreadsheet Linear-Programming Models for Optimizing Transportation," Interfaces, INFORMS, vol. 34(2), pages 139-146, April.
    14. Herer, Yale T. & Levy, Roberto, 1997. "The Metered Inventory Routing Problem, an integrative heuristic algorithm," International Journal of Production Economics, Elsevier, vol. 51(1-2), pages 69-81, August.
    15. Souraj Salah & Abdur Rahim & Juan A. Carretero, 2011. "Implementation of Lean Six Sigma (LSS) in supply chain management (SCM): an integrated management philosophy," International Journal of Transitions and Innovation Systems, Inderscience Enterprises Ltd, vol. 1(2), pages 138-162.
    16. J. Behnamian & S. M. T. Fatemi Ghomi, 2016. "A survey of multi-factory scheduling," Journal of Intelligent Manufacturing, Springer, vol. 27(1), pages 231-249, February.
    17. Bredström, David & Rönnqvist, Mikael, 2006. "Supply Chain Optimization in Pulp Distribution using a Rolling Horizon Solution Approach," Discussion Papers 2006/17, Norwegian School of Economics, Department of Business and Management Science.
    18. Luis Aguilera Enriquez & Octavio Hernandez Castorena & Oscar Perez Veyna, 2015. "RELATIONSHIP SUPPLY CHAIN MANAGEMENT AND INFORMATION TECHNOLOGY AND COMMUNICATION IN PRODUCTION PROCESSES TO IMPROVE COMPETITIVENESS OF MANUFACTURING SMEs IN AGUASCALIENTES,LA RELACION DE LA GESTION D," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 8(1), pages 79-91.
    19. le Blanc, H.M. & Cruijssen, F. & Fleuren, H.A. & de Koster, M.B.M., 2006. "Factory gate pricing: An analysis of the Dutch retail distribution," European Journal of Operational Research, Elsevier, vol. 174(3), pages 1950-1967, November.
    20. Yao, Ming-Jong & Lin, Jen-Yen & Lin, Yu-Liang & Fang, Shu-Cherng, 2020. "An integrated algorithm for solving multi-customer joint replenishment problem with districting consideration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 138(C).
    21. Luca Bertazzi & Simona Cherubini, 2013. "An inventory-transportation system with stochastic demand," Computational Management Science, Springer, vol. 10(1), pages 1-20, February.
    22. Sonntag, Danja R. & Schrotenboer, Albert H. & Kiesmüller, Gudrun P., 2023. "Stochastic inventory routing with time-based shipment consolidation," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1186-1201.
    23. Masoud Chitsaz & Jean-François Cordeau & Raf Jans, 2019. "A Unified Decomposition Matheuristic for Assembly, Production, and Inventory Routing," INFORMS Journal on Computing, INFORMS, vol. 31(1), pages 134-152, February.
    24. Langevin, André & Mbaraga, Pontien & Campbell, James F., 1996. "Continuous approximation models in freight distribution: An overview," Transportation Research Part B: Methodological, Elsevier, vol. 30(3), pages 163-188, June.
    25. Leandro C. Coelho & Jean-François Cordeau & Gilbert Laporte, 2014. "Thirty Years of Inventory Routing," Transportation Science, INFORMS, vol. 48(1), pages 1-19, February.

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