Case Study - Simulating Barge Shifting and Fleeting OperationsA large inland barge company, built through a series of mergers and acquisitions, was considering options for rationalizing the number of shore facilities (a.k.a. "fleets") it operated. While in some cases there was an obvious opportunity for fleet closure due to proximity to another fleet, most options were not so clear cut, and the seasonal peaks in the industry still demanded a large amount of fleeting capacity at certain times of the year. Could we close a fleet and still handle the peak volume? Would it result in incremental "shifting" costs -- the cost of delivering barges from a fleet to a customer for loading or unloading? If we were to consider closing one or more fleets which ones would they be? Would we need more boats if we changed the fleet configuration? Would they be small tugs or larger shuttle boats?
ApproachWe originally set out to do a quick spreadsheet model, but the team quickly became convinced that a more robust and detailed approach was needed. A discrete event simulation model was created that allowed us to trace the movement of each barge through the system, both with the current fleet configuration and with alternative potential groupings. This allowed us to examine demands on fleet capacity day-by-day in the peak season, and create projections showing number of days per month exceeding working capacity in various scenarios. We were also able to examine the cost impact of different boat deployment strategies -- e.g., turning line boats earlier and employing a larger number of shuttle boats to push barges back and forth amongst the fleets.
Value AddedThe client was able to move forward with fleet configuration decisions more confidently as a result of the modeling effort. In addition, part way through the project timeframe, a decision was made by the client to purchase another barge company. This opened a second phase of work that entailed estimating the barge movement patterns of the acquired company, and adding their fleets into the mix to be considered for closure or expansion. The client was then able to rapidly arrive at a operating plan with the new mix of fleets and volume prior to the onset of the next peak season.