Towards an IT-based Planning Process Alignment: Integrated Route and Location Planning for Small Package Shippers

To increase the efficiency of delivery operations in small package shipping (SPS), numerous optimization models for route and location planning decisions have been proposed. This "operations research view" of defining independent problems has two major shortcomings: First, most models from literature neglect crucial real-world characteristics, thus making them useless for small package shippers. Second, business processes for strategic decision making are not well-structured in most SPS companies and significant cost savings could be generated by an IT-based support infrastructure integrating decision making and planning across the mutually dependent layers of strategic, tactical and operational planning. We present an integrated planning framework that combines an intelligent data analysis tool, which identifies delivery patterns and changes in customer demand, with location and route planning tools. Our planning approaches extend standard Location Routing and Vehicle Routing models by crucial, practically relevant characteristics like the existence of subcontractors on both decision levels and the implicit consideration of driver familiarity in route planning.