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Logistics in the Economist

Brian Borchers of New Mexico Tech sent me an alert that the Economist magazine of June 15, 2006 has a number of articles on the changing face of logistics. One article is on eCourier, a London based courier service. The heart of the system is operations research in the form of algorithms for courier scheduling:

The key to the service is picking the right courier, says Mr Allason[one of the founders of eCourier]. The one whom the GPS system shows to be nearest to the job may not necessarily be the most appropriate. For instance, a courier in London may be only a few hundred yards away from a collection address, but if he is on the other side of the Thames it could take him 15 minutes just to cross the river. Other information, such as traffic problems and the performance of individual couriers, also needs to be taken into account.

This is a mathematical problem, and eCourier spent some time hunting around for someone able to solve it. Eventually it found a team led by Cynthia Barnhard [sic], a logistics expert at America’s Massachusetts Institute of Technology, which devised an elaborate algorithm that is now at the heart of eCourier’s business, in much the same way that a mathematical formula drives Google’s search engine. What Mr Allason particularly likes about his internet-based courier system is that it is easily “scaleable”: more couriers and markets can be added without having to hire many more dispatchers or people to run a call-centre.

The “Cynthia Barnhard” referred to is Cynthia Barnhart of MIT who among about 40 other jobs is co-director of their Center for Transportation and Logistics. Perhaps when the magazine corrects her name, they might also mention the phrase “operations (or operational) research” to describe her field!

This is a good example of one of the growth areas in operations research: OR applied to “smaller” problems. While 10 or 20 years ago, OR needed an airline or other huge organization to justify its use, the easier accessibility to software and more routine use of models allows it to be used in smaller organizations. This is also a great example of how an entrepreneurial company can use OR to gain tremendous competitive advantage.

Update June 29, 2006

There is an interesting article from eCourier about how “Cynthia Barnhard” helped out in this project.  It does appear an “italian team” did most of the implementation. I hope some day some company tries to woo me with fruit baskets!

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