Operational research applied to shipment consolidation: literature review and a real case study

• Grant number: 21/13433-9
• Support Opportunities: Scholarships in Brazil - Scientific Initiation
• Start date: April 01, 2022
• End date: March 31, 2023
• Field of knowledge: Engineering - Production Engineering - Operational Research
• Principal Investigator: Pedro Augusto Munari Junior
• Grantee: Mariana Michetti Pereira Jeronymo
• Host Institution: Centro de Ciências Exatas e de Tecnologia (CCET). Universidade Federal de São Carlos (UFSCAR). São Carlos , SP, Brazil

Abstract

A logistics system that runs well can bring significant cost reductions and strengthen the strategic positioning of a company. Shipment consolidation is one of the main activities in this context and is defined as the strategy that groups shipments with a common destination, to be transported in the same vehicle, in order to reduce transport costs, better organize deliveries, and reduce breakdowns for the customer, among other advantages. However, deploying and managing a shipment consolidation program is not an easy task. In particular, the occurrence of the pandemic of COVID-19 shifted consumer behavior towards online shopping and home delivery services, further overloading the logistics sector and reinforcing the importance of consolidation. Operations Research (OR) has a fundamental role in optimizing shipment consolidation, as it allows us to enhance the consolidation performance in practice, using mathematical models and algorithms that help in the decision-making process. Although the importance of shipment consolidation is recognized worldwide, the current literature is still scarce regarding the presentation of consolidation strategies available in a unified way, their suitability to different situations, and a comparison of their performances. Given this research gap, the objective of this project is to review and categorize the different ways and means of consolidation in the literature, as well as empirically compare the main techniques through computational experiments, using instances from literature and real data provided by a manufacturer, in which consolidation is a fundamental activity for the efficient dispatch of its products. We intend to consider the main approaches, from simple consolidation policies to more sophisticated models and algorithms described in the literature, to identify the main advantages and disadvantages of these approaches.(AU)