Comment by yorak
5 months ago
Geoffrey, thanks for sharing your story with us. OR sure is a weird niche. Good enough algorithms for solving these problems have existed for decades1, but we still see low adoption and your 95% estimate of the companies not optimizing their operations rings true.
Similarly to you, I spent a short while trying to sell VRP optimization with an API business model, and what dawned on me was that most companies do not have the necessary in-house expertise to integrate optimization into their existing tools even if the API is well-designed. There also really seems not to be any urgency to do that and most logistics companies just offload their inefficiencies onto their customers. Your routes are not effective? No problem, just bill more.
Some years ago I heard about a Swedish team of optimization experts who got so fed up with selling optimization to unwilling transportation companies that they founded their own—just to mop the floor with their ineffective competition. :D
I agree that ease of use is key here. In my PhD dissertation, I tried to address the issue by adding self-adaptivity within transportation management systems, mostly through automatic parameter tuning and algorithm selection. Such approaches remove some amount of fiddling when the optimization tool is adapted to a new optimization problem. Worth a look, perhaps, if you're interested.
Many thanks again for the interesting article and all the best with Timefold.
1) E.g., already by the '90s, we had quite capable algorithms for the VRP. I have open-sourced a library of classical VRP algorithms called VeRyPy, containing simple and not-so-simple heuristic algorithms. It has enjoyed modest success among VRP researchers and practitioners. Nowhere near the success of OptaPlanner, but also, the purpose is different—OptaPlanner is production-ready, whereas VeRyPy is more geared towards education and research purposes.
If nobody does something in a whole industry perhaps it's because it's not a differentiating factor. Do you have a link to the Swedish company? It just sounds like typical "software engineers know better" story where they go bankrupt after a few years because turns out the important bits are in other parts of the business.
I am interested in that company as well.
A recent example of "knowing better optimisation experts" I know of in my local area are with garbage trucks. A expensive company was hired to optimize - yet they apparently forgot some real world factors, like with snow and ice not all the trucks can go everywhere, some roads too narrow, etc. with the result of chaos and the workers fighting succesfully to be allowed to continue influence their working schedule, they sucesfully managed without the external experts.
People do inefficient things. And they also do it for years, thinking it is a universal law. But usually an expert from the outside will still not know better how to do things.
The company would probably be Airmee, they have a scheduled delivery at my door in an hour.
https://www.kth.se/en/om/innovation/alumner/airmee-levererar...
https://www.airmee.com/en/
Yes, this story is far too soothing to the software engineering ego to be actually true! Generally real world problems are messy, hard, and full of human problems. It's a little aggravating when 'software engineers know everything' stories like this are taken at face value and reinforce that mistaken idea.
True stories like this happen, but generally only when a domain expert on the business side was incorporated from the beginning—and that may not be mentioned by the software side.
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Sorry to dissapoint you and the few other curious ones, this was some 10 years ago and such details such as name of the company have fell of from my overfilled brain long ago. While the person who told me the story is a reputable fellow I must admit they still are a secondhand source. Being a finn I tend to trust people and take their word on it and, hence, do not recall doing my research to factcheck.
Still, it _is_ a good story, and plausible based on what I saw to be the state of the industry back then. Your run of the mill last-mile courier services were really badly organized, from the mathematics and optimization side as simple as they get, and ability to build a robust optimization transportation management system would've given serious competitive edge.
(edit: removed repeated words)
I, too, would like the reference.
However I can tell you that this kind of thing really does happen. One of the injection molding conferences I attended had several presentations where companies were contemplating building more injection molding lines, but instead hired consultants (of course rolls eyes) to re-optimize their injection mold programs. After tweaking all the parameters in to speed up injection rates, it turned out the company had about 50% more capacity than they thought.
Now, I suspect this was shit management more than anything. I strongly suspect that the people on the line told their superiors that they needed to fix the programs and got ignored.
However, you couldn't sell anything to the management chain until they were staring at having to spend cash. Selling people on "saving money" is always super difficult as it requires them to change something that is nominally "working". Selling people on "not having to spend money they are staring at imminently" is always way easier. Obviously the easiest sell is "spend money to make a lot more money", but that doesn't happen all that often.
I always assumed it was due to (a lack of) scale for most companies? 1% improvement in container planning for Maersk is hundreds of millions of dollars per year, so they can have an entire team dedicated to that. Meanwhile at the other end of the scale, 1% improvement of job scheduling at $DAYJOB probably wouldn't even pay for its own ongoing costs, let alone the costs of setting it up.
A 10% productivity gain is a lot for any company, regardless if they are operating a fleet of 50 or 50 000 vehicles.
However, the cost and risk to achieve that productivity gain is typically huge. Many Operations Research projects fail. And when they do, they are very expensive failures. "Managers getting fired" expensive.
With our technology, we're making OR projects easy and quick to put into production.
I did OR in my Bachelor thesis, and then at my first project at my first job. It worked like magic, and business was sure it wouldn't work. Still one of the projects I always talk about. It was for organizing screens unto pallets unto trucks. Then I never anything with OR ever since. Even for a few early AI products 8 years ago, in the end they didn't go for it. I think you are spot on with the expertise. Even though quite a lot of businesspeople heard about it in university.
Thanks for sharing your story too, Yorak.
Yes, having in-house expertise to integration optimization into their existing tools is hard. Especially if they use low level solver APIs (especially if it's math equations).
We're working making that easier with high-level REST APIs (Timefold Field Service Routing, etc). And with education (Timefold Academy) by creating videos and articles on how to integrate real-time planning, continuous planning, labor law constraints, fairness, cost reduction, etc
See https://www.youtube.com/@timefold/videos
Symbolic math equations isn't a low level solver API. That's the high level interface. A low level interface expects you to provide the optimization problems as raw matrices.
What you're talking about is known as a problem reduction.
I would argue that inputting a loadBalance(sum(shift.duration)) function per employee is a higher level abstraction than inputting a quadratic math equation to accomplish the same thing.
Think Java/C++/Python vs Assembly.
Ironically, talking about problem reduction... most math equation based solver can't scale quadratic equations, so users "relax" the business constraints (to the point that projects fail in production).
I like anecdote about the Swedish team of optimization experts! Did they succeed with their transportation company?
Edit: vasco was faster with their question haha