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GIS and Location Planning

Submitted To:
Prof. Manimay Ghosh
By:
Sreechand Nambiar 2010230
P N V Sriram 2010231
Sugandha Kumari 2010232
Sumeet Gupta 2010233
Sumir Josan 2010234
For
Operations Management I
PGDM 1st Year, 2nd Trimester
Project
2010-12

The project deals with GIS and how DHL solved its problems with the help of GIS systems
Operations Management Project

Table of Contents
Geographic Information Systems ........................................................................................................... 3
Introduction: ....................................................................................................................................... 3
Philosophy of GIS ................................................................................................................................ 3
Advantages of GIS: .............................................................................................................................. 3
Planning Of Project: ............................................................................................................................ 4
Making Decisions: ............................................................................................................................... 4
Visual Analysis: .................................................................................................................................... 4
Improving Organizational Integration:................................................................................................ 4
Case Study: DHL Express Europe ................................................................................................................. 5
Challenge............................................................................................................................................. 5
Solution ............................................................................................................................................... 5
Results ................................................................................................................................................. 6
References .............................................................................................................................................. 6

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Operations Management Project

Geographic Information Systems


Introduction:
A common definition of Geographical Information Systems (GIS) found in literature relates
this technology with a tool that associates databases and digitalized maps. GIS is a
computerized system that combines physical geography with cultural geography. Geography
fundamentally influences and connects culture, business, society, and lifestyle. Geography
answers many business and marketing queries. Therefore, the tools that leverage
geography, such as GIS, are very useful for business and bring value to organization and
improve their bottom line.

A computer-based GIS provides an electronic process for managing, integrating, and


analyzing massive amounts of geographic information by combining location features with
descriptive data in a relational database management system. According to Environmental
System Research Institute (ESRI), “A GIS is an organized collection of computer hardware,
software, geographic data, and personnel designed to efficiently capture, store, update,
manipulate, analyze, and display all forms of geographically referenced information.”

Philosophy of GIS
The proliferation of GIS is explained by its unique ability to assimilate data from widely
divergent sources, to analyses trends over time, and to spatially evaluate impacts caused by
development. For an experienced analyst, GIS is an extension one's own analytical thinking.
The system has no in-built solutions for any spatial problems; it depends upon the analyst.
Thus, a complete GIS consists of at least five components: software, hardware,
geographical data, people and the organization. If a system is implemented in a company,
only the software is not enough to work with the database and the digitalized map, is
important that exists: qualified personal, an objective in the use of the system and the
interaction with other areas inside of the organization. Therefore, GIS is a collection of
software, hardware, geographical data and people to facilitate the process of decision
taking into consideration that involves the use of geo-referencing information in the
organization.
It digitized mapping with key location data to graphically depict trading-area characteristics
such as population demographics, data on customer purchases, listings of current,
proposed, and competitor locations.GIS mapping has evolved out of a long tradition of map
making. Earlier all spatial analysis were done by manual processing procedures but now with
the development of GIS, efficient handling of voluminous data and effective spatial analysis
is possible. GIS mapping have emerged as very powerful technology because it allows
geographers to integrate their data and methods in ways that support traditional forms of
geographical analysis, such as map overlay analysis as well as new types of analysis and
modeling that are beyond the capability of manual methods.

Advantages of GIS:
The Geographic Information System has been an effective tool for implementation and
monitoring of municipal infrastructure. The use of GIS has been in vogue primarily due to
the advantage mentioned below:
 Planning of project
 Make better decisions
 Visual Analysis
 Improve Organizational Integration

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Planning Of Project:
Advantage of GIS is often found in detailed planning of project having a large spatial
component, where analysis of the problem is a pre requisite at the start of the project.
Thematic maps generation is possible on one or more than one base maps, example: the
generation of a land use map on the basis of a soil composition, vegetation and topography.
The unique combination of certain features facilitates the creation of such thematic maps.
With the various modules within GIS it is possible to calculate surface, length, width and
distance.

Making Decisions:
The adage "better information leads to better decisions" is as true for GIS as it is for other
information systems. A GIS, however, is not an automated decision making system but a
tool to query, analyze, and map data in support of the decision making process. GIS
technology has been used to assist in tasks such as presenting information at planning
inquiries, helping resolve territorial disputes, and siting pylons in such a way as to minimize
visual intrusion.

Visual Analysis:
Digital Terrain Modeling (DTM) is an important utility of GIS. Using DTM/3D modeling,
landscape can be better visualized, leading to a better understanding of certain relations in
the landscape. Many relevant calculations, such as (potential) lakes and water volumes, soil
erosion volume (Example: landslides), quantities of earth to be moved (channels, dams,
roads, embankments, land levelling) and hydrological modeling becomes easier. Not only in
the previously mentioned fields but also in the social sciences GIS can prove extremely
useful. Besides the process of formulating scenarios for an Environmental Impact
Assessment, GIS can be a valuable tool for sociologists to analyze administrative data such
as population distribution, market localization and other related features.

Improving Organizational Integration:


Many organizations that have implemented a GIS have found that one of its main benefits is
improved management of their own organization and resources. Because GIS has the ability
to link data sets together by geography, it facilitates interdepartmental information sharing
and communication. By creating a shared database one department can benefit from the
work of another--data can be collected once and used many times. As communication
increases among individuals and departments, redundancy is reduced, productivity is
enhanced, and overall organizational efficiency is improved. Thus, in a utility company the
customer and infrastructure databases can be integrated so that when there is planned
maintenance, affected people can be informed by computer-generated letters.

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Case Study: DHL Express Europe

Challenge

DHL has been an innovative leader in the worldwide shipping business for more than 35
years. DHL is always on the lookout for improving how it does business. In 2002, as part of a
test project, the company tackled the challenge of streamlining its pickup and delivery (PuD)
system in Sweden, where DHL operates 1,400 vehicles. PuD represents 40 percent of the
total cost of the company’s daily operations.

Solution
With this in mind, DHL looked at several solutions to help improve sorting and logistics. They
chose ESRI® geographic information system (GIS) software to improve the sorting and
sequencing in the loading area. Using a mainframe environment, DHL is able to allocate
resources, using ArcGIS® Server software, through the Web to each terminal. This allows
staff members to use ArcGIS Server to manage routes and stops, as well as edit geographic
data when necessary. Using GIS as part of the overall operation, all sequencing is now done
at night. “The core of this solution is the geo-coding,” elaborates Dahlin. “Without it, the
whole system wouldn’t work.”

First, data entry staff enters the information for the next day’s deliveries into the main
computer system. The information is automatically loaded into ArcGIS Server, where
shipment addresses are geo-coded and checked against a map to determine the zone to
which each shipment belongs. The zones are created based on routes and drivers. These
zones are then clustered and optimized into tours based on allocation rules and driver input.
All data is accessible to staff via handheld computers and LAN radio at any time and across
the whole facility. Once the tour plans are created, delivery notes and sort code files are
synchronized with shipments. As a result of the new system, deliveries are now placed at
the correct gates by the time drivers arrive at the terminal. Even after double-checking and
loading, the drivers are out of the terminal in half the time it took before the system was
implemented.

Being able to optimize the number of tours per terminal helps DHL minimize its fleet and
the driving distances of each vehicle. Routes can be optimized daily, which greatly reduces
the effort and resources needed during peak shipment periods such as the winter holiday
season. The system was up and running in a short time, with parameters set up and fail-safe
measures in place. “The system has to work,” Dahlin stresses. “We rely on it and can’t afford
for it to not function.”

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Results
Before using ArcGIS Server, DHL could only sort to a group of vehicles, leaving a lot of room
for error and taking too much time at the terminal. After implementing ArcGIS Server, the
logistics giant is able to sort to each particular tour instead of a larger, less specific postal
code. This reduced the time spent and manpower needed to sort, search, and sequence the
loading area by 50 percent. The time savings are equivalent to 30 minutes per tour per day.
Currently, DHL Express operates 1,200 tours per day from the terminals.
Creating an optimum network configuration means a lower total transportation cost and
minimizes the distance driven by each vehicle. “This has improved our competitive position
in the marketplace, leading to higher package turnover rates and better margins,” says
Dahlin.
Optimized tours result in lowered PuD and fleet costs. Correct prices and delivery time
windows can be given to clients, which increases their satisfaction and fosters customer
loyalty.DHL Express has found ArcGIS Server improves operations threefold: the bottom line
results are increased; service to customers is improved; and, through accurate drive times,
the company’s impact on the environment is lessened.

References
1. Bolstad, P. (2005) GIS Fundamentals: A first text on Geographic Information Systems,
Second Edition.
2. http://en.wikipedia.org/wiki/Geographic_information_system
3. http://advanced.jhu.edu/media/images/environmental/map_dem_gis_3d_b.jpg
4. http://www.esri.com/industries/logistics/index.html
5. http://www.esri.com
6. http://www.esri.com/industries/facilities-management/index.html

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