Experts not required: Optimization tool offers easy way to measure true cost of carbon footprint

Companies can use Transportation Analyst 2.0 to determine the optimal size of their fleets, find opportunities for combining forward and reverse logistics, or decide on how often they should schedule deliveries to certain locations or customers.
By Manufacturing Business Technology Staff January 20, 2009

For many manufacturers, optimizing transportation networks achieves the twin goals of lowering operating costs and reducing environmental impact.

Now supply chain optimization specialist ILOG has equipped the latest version of its transportation planning application with functionality for calculating the carbon footprint associated with various transportation strategies.

Companies can use this solution—called Transportation Analyst 2.0—to determine the optimal size of their fleets, find opportunities for combining forward and reverse logistics, or decide how often they should schedule deliveries to certain locations or customers.

Derek Nelson, an ILOG product manager, expects the solution to attract widespread interest partly because it doesn’t require an expert in optimization techniques—or even a professional transportation planner—to operate. “It allows the supply chain person or business professional to ask the kinds of questions they want to ask,” Nelson explains.

As the name implies, Transportation Analyst 2.0 is an upgraded version of an existing ILOG application. Nelson says this version allows companies to more than manage their own private transportation fleets.

Now users can analyze the trade-offs between using private fleets, commercial delivery services, and less-than-truckload shipping. They also can model consolidation and deconsolidation options to determine whether it’s more economical to go through a hub or to ship directly to a customer.

Transportation Analyst 2.0 also helps companies calculate their transportation-related carbon footprints. And as David Simchi-Levy, professor of engineering systems at Massachusetts Institute of Technology and chief science officer for ILOG, points out, carbon footprints and costs often go hand in hand.

“Why do we see more companies looking to reduce their carbon footprint?” Simchi-Levy asks. “In many cases, it’s driven by oil prices, which directly impact transportation costs. The point being that a high carbon footprint isn’t just a problem for the environment—it’s also a sign of an inefficient transportation system. So reducing your carbon footprint implies improving your transportation system—or vice versa. When you look at it this way, you realize there are specific benefits to be gained by focusing on reducing your carbon footprint.”