The Optimization Edge

Following is an excerpt from Steve’s 3/31 presentation to transportation and logistics executives, hosted by Stifel’s equity research group.

There are rail executives who talk about disruption because, starting around 2011, the railroads started to lose massive market share to trucking. The gap is presently widening. If rail transportation costs less and improves supply chain resiliency versus a truck-only strategy, and if it is more energy efficient and emits lower greenhouse gases than trucking does, why is it losing share?

On April 6, Steve Sashihara returned to Road Dog Trucking Radio to discuss trucking and emerging technology. Following are excerpts of his conversation with host Mark Willis.

Princeton Consultants Optimization Principal Dr. Irv Lustig has been nominated for the position of Vice President of Marketing, Communications, and Outreach (VPMCO) for INFORMS. The election will take place this summer. The volunteer role includes serving as an advocate for INFORMS and as a trusted O.R. and Analytics subject matter expert, as well as speaking about INFORMS and technical subject matters with external audiences, including decision-makers in government and other organizations and businesses.

Irv said, “I’m honored to be nominated for VP of Marketing, Communications and Outreach for INFORMS in the next election cycle. I look forward to sharing my views on how INFORMS can achieve its strategic goal of how we can best champion our profession and our brand.”

In November, Steve, as a guest speaker at Gurobi Days in New York City, presented a project risk management framework. Following is a lightly edited excerpt from Q&A with practitioners in the audience.

Audience Member: You said a consulting group is brought in when things are not going well. Isn’t there another situation where things are actually going OK? The organization is doing fine but executives are convinced that they can get that two‑percent improvement and millions or billions of dollars in savings and benefits.

This post is adapted from Irv’s appearance on the Alldus “AI in Action” podcast series.

These are truly exciting times for advanced analytics practitioners, whether you are launching your career or continuing to develop and implement solutions.

At the recent INFORMS Annual Meeting, I had the great pleasure to be a judge for “Doing Good with Good OR,” https://www.informs.org/Recognizing-Excellence/INFORMS-Prizes/Doing-Good-with-Good-OR-Student-Paper-Competition, the student competition that honors projects that greatly impact society. I joined the competition committee this year and will be the co-chair with Dr. Justin Boutilier in 2023.

Every year Princeton Consultants surveys executives about digital disruption and its impact on freight transportation and supply chains. In 2022, as with previous years, the largest segment of survey responders, 58 percent, were executives at transportation carriers. The other segments were: Finance, Media and Government executives, 19 percent; Shippers executives, 15 percent; and Suppliers executives, 8 percent.

The AI solution development life cycle requires very different activities. INFORMS created a Job Task Analysis through surveys of practitioners for its Certified Analytics Professional (CAP) program. The result of this study defined seven performance domains for analytics practitioners, which I view as key components of the AI solution development life cycle. In the diagram below, I group the seven domains into three groups, based on what I believe is the kind of expertise required to perform tasks in that domain.

At an e-commerce giant, customer orders are assigned throughout the day to fulfillment centers and third parties across the United States while minimizing shipment costs, observing limits on inventory, reducing split orders, and balancing workload across the fulfillment centers. The company’s data science team created an order fulfillment optimization proof of concept in Python that would significantly improve the operation. To prepare for deployment, the company’s software engineering team converted the code into Java, leveraging the Gurobi Optimizer, and created a solution that integrated with real-time data. Because of the critical nature of the operation, company leaders sought assurance that the solution would be successfully implemented and maintained 24 hours a day, 7 days a week, and yield the desired results.

The metaverse buzz has begun and Transportation and Logistics executives should pay attention. In fact, we think it is inevitable that the metaverse—Virtual Reality (VR) and Augmented Reality (AR)—will impact the industry in a variety of ways.