USPS Capstone Project
USPS Capstone Project
Team Members: Dallas Kuchel, Efrain Reyes, Matthew Stirling
Dynamic Routing Model
The United States Postal Service (USPS) historically delivers mail and packages through over 200,000 nationwide static delivery routes. These routes are the same every day.
Competitors utilize a more dynamic routing method for their delivery drivers. They adopted technology to change each driver’s route daily to meet the delivery needs of that day while minimizing the cost of those routes through optimization. This technique is typically termed “dynamic routing”. These delivery companies have saved billions of dollars every year through their adoption of dynamic routing solutions.
The Postal Service has been privately pursuing methods to make these static delivery routes more dynamic for the last four years. Recently, the Postal Service issued an official ‘Request for Information’ regarding dynamic routing solutions. The Postal Service is considering dynamic delivery for a number of reasons. As listed in the request for information, the Postal Service could use dynamic routing to consider the following initiatives:
- Dynamic routing could allow cost effective delivery of only packages on Saturday. Since the 1980s, various Postmaster Generals have argued in favor of eliminating Saturday delivery. Recently, this proposal has gained more traction with policy decision makers. If Congressman Issa’s proposal to end Saturday delivery were to pass into law, the Postal Service would be required to deliver only packages and premium mail services on Saturday. In this case, dynamic delivery routes would be more cost effective than the traditional delivery routes.
- The Postal Service has recently teamed up with Amazon.com to offer Sunday delivery for Amazon orders in New York City and Los Angeles. These deliveries will rely on dynamic routing to allocate packages to trucks and determine routing for delivery. The same service will be expanding to other major cities as soon as next year. Dynamic routing will be essential for successful implementation of this effort.
- Dynamic routing could expand same-day delivery service. Many businesses, including Amazon, Google, and Walmart, are all experimenting with same day delivery service as Internet retail portals push to compete with the a competitive advantage “brick and mortar” stores offer - immediacy. The Postal Service has created a same-day delivery pilot called MetroPost. This pilot program currently uses very limited and basic heuristics to plan delivery routes that change daily. A more robust dynamic routing solution might gain efficiencies over the current routing tools and allow the Postal Service to roll out this service to additional major metropolitan areas.
- Dynamic routing could allow consideration for alternative delivery models with a pursuit of efficiency gains. For example, UPS currently loads its deliveries on trucks directly at the processing plants. The Postal Service sends all of its mail from each processing plant, unloads it at a delivery station, and then reloads it on delivery trucks again at those stations. Dynamic delivery might allow pursuit of alternative delivery models that increase efficiencies and reduce costs.
- Breakthrough technologies often permit the entrepreneurs and innovators to build new business models and services around the new technology. Similarly, dynamic delivery might permit other creative solutions that are currently unimaginable.
The Postal Service declares some other needs in its request for information. In particular, they are in pursuit of a web-based, national desktop tool that could provide turn-by-turn instructions to personnel. Additionally, they desire a single, internal corporate solution.
The Postal Service currently has one temporary solution from RouteSmart technologies. This solution is a desktop application, which uses solver algorithms to generate the turn-by-turn driving instructions. The Postal Service has expressed a need for fast solutions. Currently, their temporary RouteSmart solution generates results in 5 minutes. Although the results of a RouteSmart pilot program are successful, the costs of the system are prohibitive and the scope of solutions the system solves are very limited so the Postal Service is pursuing internal solutions for its long-term solution.
The Postal Service is seeking to gain efficiencies in delivery methods. Specifically they are interested in the potential of dynamic delivery solutions. USPS is seeking more efficient delivery routing methods and wants to better understand the requirements and process for implementing an internal dynamic delivery solution.
Given a localized delivery area, analyze the potential of dynamic routing for the Postal Service within the constraints of Saturday only package delivery. Determine heuristics to solve these localized problems and develop a model to optimize a dynamic routing solution. The following objectives focused the group’s efforts in solving the stated problem:
- Develop a Systems Requirements Specification that identifies key requirements for Saturday package delivery.
- Formulate an algorithm to minimize the time/cost to deliver parcels given a daily delivery list.
- Develop a CONOPS for implementing a Dynamic Routing Solution.
- Assess potential solutions and implementation strategies for nationwide dynamic routing.
- Develop a system prototype, which integrates the modeling product with other software and presents optimized route information.