On Demand Solutions: US Cold Storage
The Company
US Cold Storage is a leading North American public refrigerated warehouse operator with 34 facilities located in 12 states, and offers over 194 million cubic feet of temperature-controlled warehouse and distribution space. USCS is among the top five largest public refrigerated warehouse companies in the USA.
Goals and Issues
With the ongoing growth of their business operations and network comes the need to evaluate new business opportunities and their impact at both the strategic and tactical/routing levels. In order to quote a price to a potential new client, they needed to quickly analyze historical data in often non-standard formats and then make a proposal that would result in a win-win situation for both the new client and USCS.
Implementation and Results
Instead of acquiring optimization tools and technology and building and maintaining in-house expertise, the organization chose to ‘outsource’ the task, and USCS contracted TechnoLogix to provide the analysis and optimization required. To do this, we had to develop a robust framework of programs that could analyze diverse customer shipping patterns. Our partnership has been going strong for over a decade and more than 100 different projects and studies.
Routing algorithms have been developed to estimate the cost of trips that would combine both potential and existing customer shipments in a pattern that would minimize travel and drop costs and satisfy the constraints of number of drops per load, maximum weight and volume and feasible routes. In addition, what if scenarios are analyzed to compare the best mix of warehouses to minimize overall costs and maximize customer service.
The cache of information that TechnoLogix retains for USCS is also used to help customers refine their networks. It is often used as a resource for logistics professionals to demonstrate that existing programs are appropriate and products are positioned properly. USCS is able to benchmark its own programs to ensure service offerings and costs are on target.
Based on the analysis and results generated by TechnoLogix, USCS has convinced numerous new clients and their product business to switch to using USCS for their cold storage needs.
Our Tools
To support USCS in its ongoing review and analysis of new business opportunities we make use of our Opti-Net network optimization engine for strategic issues and customized routing algorithms for more detailed routing and costing issues. Mileages from USCS warehouses to customer destinations and from customer manufacturing facilities are generated in batch mode using PC Miler, www.alk.com and stored in a database that currently contains over 4 million unique zip code to zip code combinations.