Maersk makes an investment in optimization. He invests millions of dollars in a company developing optimization software to manage drayage at ports better.

We all know the problems:

• Long lines
• Insufficient truck use – too few daily turns
• Upset contractors

These problems stem from the inefficient matching of containers with dray operators. For example, a truck gets assigned a container at the bottom of a stack rather than a similarly suitable container at the top. LoadSmart claims to match carriers with containers based on various factors = faster turns, fewer touches, and less congestion.

It drives a broader question: why aren’t more companies using optimization to get better results? I think the reasons are:

• Some optimization tools, for example, SAP APO, are hard to understand, virtually impossible to configure, and wildly expensive (other than that, they are great!)
• The concept advanced by Dan Gilmore at Supply Chain Digest is that most companies think they are doing better than they are:  “Generally, in my experience, a huge percentage of companies believe they are in the top quintile (20%) of supply chain performance.  But 75 or 80 percent of them are wrong.
• Optimization is part of the software, and most IT groups are perceived as “blockers.”