Impact on industry

CASTLE Lab prides itself on its ability to have an impact on industry. We do this in several ways. Most important is our direct participation in the development of systems to be used by our corporate sponsors. This work is done completely through Princeton University by research staff working in the department of Operations Research and Financial Engineering. These projects range from real-time optimization, short-term tactical planning and strategic simulators for analyzing the dynamics of operations. While the details of these projects are often confidential, we do our best to write papers summarizing this work. Over $24 million in research funding (since the founding of CASTLE Lab) is testament to the faith that our sponsors have put into our efforts.

Consulting firms started
Strategic and tactical optimization of locomotives for Norfolk Southern
Changing the LTL trucking industry
Real time optimization and strategic planning for truckload trucking
Awards and testimonials
Major projects:
Strategic fleet simulator for Schneider National
Locomotive optimization for Norfolk Southern Railroad
Tactical and strategic fleet planning for Netjets
Spare parts management for Embraer
Strategic and operational planning at Yellow Freight System
Real-time dispatching for truckload trucking
Freight car distribution for Norfolk Southern Railroad
The multilayered-resource scheduling problem for Air Products and Chemicals
Interactive network optimization for LTL trucking

Other projects (not listed below)
Ryder Truck Lines - This was the first LTL carrier we worked with, which produced the predecessor of SuperSPIN
North American Van Lines - High Value Product division - Optimization model for LTL network
North American Van Lines - Commercial Transportation Division - Developed LoadMAP (predecessor of MicroMAP) - Second place in Edelman competition in 1987.
Burlington Motor Carriers - Implemented real-time dispatch system in 1993-1994. System was commercialized by Transport Dynamics
Triple Crown Services - First real-time implementation of a routing and scheduling tool for short-haul drayage

 


Consulting firms started:

Two consulting firms have been started by students who worked under the supervision of Warren Powell. These include

Princeton Transportation Consulting Group, Inc. - Founded in 1988, PTCG was started with two models developed at Princeton University. The first was SuperSPIN, an interactive optimization model for planning networks for less-than-truckload motor carriers. The second was MicroMAP, the first commercially successful model for real-time load matching for truckload motor carriers. The first management team consisted of David Cape '87 as president, and Ken Nickerson '84 who was the lead software engineer.

PTCG is now a subdivision of Manhattan Associates.

As of 2011, Manhattan Associates is still selling "MicroMAP" (as "Drivers and Loads") and SUPERSPIN. MicroMAP is used by 20 of the largest truckload carriers where it is being used to dispatch over 66,000 drivers, while SUPERSPIN is used by 20 of the largest LTL carriers.

Transport Dynamics, Inc.- TDI was founded in 1995 by Derek Gittoes who received his MSE while working in CASTLE Lab. TDI undertook a number of projects with major freight transportation companies, primarily under the leadership of Paul Stephens who came to us from BNSF Rail (and formerly Sabre). TDI was taken over in 2004 by Princeton Consultants, Inc.

 

Strategic and tactical optimization of locomotives for Norfolk Southern:

PLASMA (Princeton Locomotive and Shop Management System) is the first production optimization model for locomotives for freight railroads in the U.S. Developed for Norfolk Southern Railroad, PLASMA is based on the modeling and algorithmic technology of approximate dynamic programming. It is used for strategic planning (primarily fleet size and mix) and short-term operational planning.

Click here for a complete description

 

Changing the LTL trucking industry:

It is not often that a model has the effect of actually restructuring an industry. SuperSPIN was such a model. SuperSPIN was developed in the 1980's, as the LTL trucking industry was undergoing rapid change as a result of deregulation. Developed initially for Ryder Truck Lines (where it was called "APOLLO"), it matured at Yellow Freight under the guidance of John Braklow (where it was known as "SYSNET"). Under John Braklow's leadership, "SYSNET" was used to completely restructure Yellow's network, in addition to providing a steady series of operational improvements. The project at Yellow was recognized as a finalist by the prestigious Edelman competition:

J.B. Braklow, W. Graham, K. Peck, S. Hassler, and W.B. Powell, "Interactive Optimization Improves Service and Performance for Yellow Freight System," Interfaces, Vol. 22, No. 1, 1992, pp. 147-172.

An article in CIO Insight on Yellow Freight noted

But the crown jewel of [CEO] Zollars' and [CIO] Caddell's technology overhaul has been SYSNET, a state-of-the-art computer system designed jointly by Yellow and CASTLE Lab, an engineering, operations and finance research center at Princeton University. SYSNET is the central nervous system of Yellow Transportation. Click here for a copy of the article from CIO Insight.

SuperSPIN was marketed by the Princeton Transportation Consulting Group to the rest of the LTL industry. It was used in the early planning of Roadway Package System, which would later become FedEx Ground, as well as the LTL carriers that would later become Fedex Freight (the LTL division of FedEx). SuperSPIN was used at Overnight Transportation, which is now UPS Freight. PTCG was eventually bought out by Manhattan Associates. For a description of how the model changed the industry, click here.

 

Real-time optimization and strategic planning for truckload trucking

We have also worked extensively in the area of real-time driver scheduling for the truckload industry. MicroMAP was the first real-time model which would handle driver assignments at a very high level of detail, but which was also able to capture the impact of decisions now on the future. This system was installed at 20 of the nation's largest truckload carriers, including J.B. Hunt and Swift. As of 2011, MicroMAP (now marketed as "Drivers and Loads" by Manhattan Associates), is being used to dispatch over 66,000 drivers. A technical research paper describing this work can be downloaded from:

Powell, W.B. "A Stochastic Formulation of the Dynamic Assignment Problem, with an Application to Truckload Motor Carriers," Transportation Science. Vol. 30, No. 3, pp. 195-219 (1996). (c) Informs.

A more readable summary, including a case study with some behind-the-scenes insights, is given in

Powell, W.B., “Real-time dispatching for truckload motor carriers,” in Logistics Engineering Handbook (G. Don Taylor, ed.), CRC Press, 2007, pp. 15-1 – 15-30. (c) CRC Press.

We recently completed a detailed strategic fleet planning system for Schneider National that has allowed Schneider to save tens of millions of dollars by allowing it to model, at a high level of detail, the operations of its fleet. The model allows Schneider to understand the impact of policies before trying them in the field. As of this writing, Swift, Schneider and Hunt are the three largest truckload carriers in the U.S. Click here for more information.

 

Awards and testimonials:

But the crown jewel of [CEO] Zollars' and [CIO] Caddell's technology overhaul has been SYSNET, a state-of-the-art computer system designed jointly by Yellow and CASTLE Lab, an engineering, operations and finance research center at Princeton University. SYSNET is the central nervous system of Yellow Transportation.

Click here for the complete article (or here for a pdf copy from CIO Insight).

Yellow system network experts used a network optimization model - a collaboration between Yellow and Princeton University - to simulate and analyze traffic flow on thousands of virtual shipment lanes. They created the most efficient relay and team network to move shipments faster, with reduced handling.

 

Major projects:

All of the projects below were undertaken at CASTLE Laboratory, and produced systems that were delivered to the sponsor and put into production.

Strategic fleet simulator for Schneider National

Using the techniques of approximate dynamic programming, we have developed the first production-quality fleet simulator for truckload trucking. Funded by Schneider National, the system handles the high level of detail required to accurately simulate the physics of drivers with the ability of ADP to optimize over time. This capability was critical in order to match the performance of their dispatchers and planners. In one project, the simulator was credited with savings of over $20 million annually. A summary of the methodology and the project is given in

Simao, H. P., J. Day, A. George, T. Gifford, W. B. Powell, “An Approximate Dynamic Programming Algorithm for Large-Scale Fleet Management: A Case Application,” Transportation Science, Vol. 43, No. 2, pp. 178-197 (2009). doi 10.1287/trsc.1080.0238 (c) Informs

Locomotive optimization for Norfolk Southern Railroad

Sponsored by the Norfolk Southern and Burlington Northern Sante Fe Railroads, we solved the problem of assigning locomotives to trains over a planning horizon (a week for real-time applications, and a month for strategic planning applications) using approximate dynamic programming. ADP allowed us to assign locomotives to trains "here and now" capturing a high level of detail about both locomotives and trains, as well as a variety of complex business rules. ADP allowed us to optimize over time (approximately) while providing very high-quality solutions at a point in time. The system simultaneously handled the problem of routing locomotives to shop locations. As of this writing (2007), this system is still in develoment with Norfolk Southern.

Click here for a complete description

Tactical and strategic fleet planning for Netjets

Netjets operates over 500 jets, consisting of approximately 15 different types of jets. We have developed two models used by Netjets. The first is a very detailed optimization model that "simulates" (through optimization) the assignment of pilots to aircraft to serve customers. This model is able to handle work rules and operating policies at a very high level of detail, allowing Netjets to understand how changes in policies affect operations.

The second model focuses on fleet size and mix, capturing daily assignments of aircraft to customers over 10 years or more. This model is able to predict the substitution of different types of aircraft among customers, while modeling the daily, weekly and seasonal variations in demands.

Managing high value spare parts for Embraer

Embraer faced the problem of designing an inventory policy for its high value spare parts for a new line of aircraft. Using approximate dynamic programming, the model was able to capture tradeoffs between placing parts in field locations which provide fast, but limited, response times, versus keeping parts in distribution centers while incurring high transportation costs to respond to last minute demands. For this reason, the model used daily time increments, yet could handle lead times of six to nine months. It can produce a plan for over 1,000 spare parts, recommending the spatial allocation of inventories (which might involve allocating, say, six engines over 20 locations) while observing budget constraints and level of service targets at an aggregate level.

Strategic and operational planning at Yellow Freight System

Over a 15 year period, we developed a complete suite of models for strategic planning of the network (load planning) and operational planning for drivers. The operational planning system, which runs continuously during the day, was recognized in an article in CIO Insight, which included the quote:

But the crown jewel of [CEO] Zollars' and [CIO] Caddell's technology overhaul has been SYSNET, a state-of-the-art computer system designed jointly by Yellow and CASTLE Lab, an engineering, operations and finance research center at Princeton University. SYSNET is the central nervous system of Yellow Transportation.

Click here for the complete article (or here for a pdf copy from CIO Insight).

Real-time dispatching for truckload trucking

Triple Crown Services - Over the 1980's and 90's, we developed a number of technologies for optimizing the assignment of drivers to loads in real-time for a number of companies. In 1993-1995, we developed and implement a real-time driver scheduling system for Triple Crown Services, which needed a system for scheduling short-haul driver movements. This was the first system to solve, in real-time, the short-haul driver scheduling system, which required routing a driver (capturing full work rules and time windows) through multiple loads at the same time. The system responded to updates within a second. The system became the foundation of Transport Dynamics. Research based on this technology is summarized in:

Powell, W.B., W. Snow and R. K.-M. Cheung, "Adaptive Labeling Algorithms for the Dynamic Assignment Problem," Transportation Science, Vol. 34, No. 1, pp. 67-85 (2000) (c) Informs.

Burlington Motor Carriers - Over the 1994 -1996 time frame, we undertook an implementation of our system at Burlington Motor Carriers, a long-haul truckload motor carrier with approximately 300 trucks. The project is described in full in the paper below.

Powell, W.B., A. Marar, J. Gelfand, and S. Bowers, “Implementing Operational Planning Models: A Case Application from the Motor Carrier Industry,” Operations Research, Vol. 50, No. 4, (2002). (c) Informs

Roberts Express (now FedEx Custom Critical) - In 1995, Transport Dynamics, using software developed at CASTLE Lab, implemented a real-time driver assignment system for Roberts, which guaranteed immediate pickup and fast delivery of critical orders.

The multilayered-resource scheduling problem

Working with Air Products and Chemicals, we developed a system for simultaneously routing drivers, tractors, trailers and chemical product to serve customers. Known within the academic community as the inventory routing problem, we found that the real issue focused on the complex operations surrounding the detailed scheduling of individual drivers, tractors and trailers. A cornucopia of business rules govern what drivers can do on a particular day, which affected what product should be delivered and the equipment required to deliver it. Developed over an eight year period, the system produced schedules for every driver and piece of equipment, handling every conceivable business rule.

Freight car distribution for Norfolk Southern Railroad

Managing the flows of freight cars for railroads requires making decisions about where to move cars empty to handle demands that have not yet become known. More than just demands, this problem has to be solved in the presence of random travel times, uncertainty about customer acceptance of freight cars ("it is too dirty!") and equipment failures. Based on the Ph.D. dissertation of Huseyin Topaloglu using advances in approximate dynamic programming, this is the first production system (it has been adopted by the sponsor, Norfolk Southern Railroad) to explicitly solve a multistage stochastic optimization problem to manage its freight cars. The system is in production. A summary of the methodology is contained in

Powell, W.B. and H. Topaloglu, “Fleet Management,” in Applications of Stochastic Programming, (S. Wallace and W. Ziemba, eds.), Math Programming Society - SIAM Series in Optimization, Philadelphia,pp. 185-216, 2005.

Interactive network optimization for LTL trucking

In the 1980's, we created the first interactive-optimization model for designing service networks for less-than-truckload motor carriers. First funded by IU International (jointly at Princeton and MIT), the system evolved from APOLLO (Advanced Planner of LTL Operations), to SYSNET(r) (funded by Yellow Freight System), to SUPERSPIN which was marketed by the Princeton Transportation Consulting Group, founded in 1988 in Princeton NJ by two former undergraduates of Princeton University. The project at Yellow Freight was a finalist at the prestigious Franz Edelman competition sponsored by Informs:

J.B. Braklow, W. Graham, K. Peck, S. Hassler, and W.B. Powell, "Interactive Optimization Improves Service and Performance for Yellow Freight System," Interfaces, Vol. 22, No. 1, 1992, pp. 147-172. (c) Informs

This system allowed trucking companies, for the first time, to understand the tradeoff between the size of an end of line terminal and network costs. Prior to this system, major carriers such as Yellow had over 700 "end of line" terminals where freight originated and terminated. More end of line terminals were thought to be better because it reduced the expensive costs of deliving freight around the city. The system allowed companies to understand that with fewer, larger end of lines, it was possible to fill trucks to move destinations, reducing handling costs. For example, by the mid 1990's Yellow Freight had reduced its network to around 400 end of lines. The system is still marketed and maintained by Manhattan Associates, and is used throughout the LTL trucking industry.