Planning and managing the movement of people and goods is a demanding business operation. Whether applied to public transit, private automotive travel, or logistics of supply chains, geospatial analysis optimizes routing, conserves resources (time, fuel, package handling), improves cost effectiveness, or identifies new opportunities to expand business and regional growth.

In this lesson, we will learn how large transportation operators such as UPS use GIS and mobile networking to drive efficiencies into their massive fleets of local delivery trucks. Then we will simulate similar operations with a local business that is ready to expand but must make critical transportation decisions that will affect its growth and profitability. Fortunately, as we will discover, there are GIS tools that can model alternative transportation schemes, and with methodical analysis provide the insights business managers need to make optimal decisions.

Global commerce introduced efficiencies into large-scale logistics and led to standardized protocols of electronics, transportation signage, shipping container dimensions, metal fabrication strengths, and classifications of business. To grasp the potential applications of location intelligence with new technologies and standards, it is important for us to examine business sectors and topics such as:

• Financial Services
• Retail
• Real Estate
• Insurance
• Location-Aware Mobile Messaging
• Customer Experiences
• Healthcare

What is due for Lesson 7?

Lesson 7 will take us one week to complete. There are a number of required activities in this lesson listed below. For assignment details, refer to the lesson page noted.

Note: Please refer to the Calendar in Canvas for specific time frames and due dates.

Requirements for Lesson 7

The geo-advantages which Ryerson and Aronoff describe in Why ‘Where’ Matters vary across sectors of an economy. Industries are the production of goods or services that contribute to a nation’s gross domestic product (GDP). Standard classification systems ensure clarity in describing industries and communicating the purpose, products, and sector of a business. There are differences in US and global classifications; but most share similar major sectors. NAICS was discussed in Lesson 4, matching the industry sectors published by the Bureau of Labor Statistics, U.S. Department of Labor.

The most general description of industry is into primary, secondary, and tertiary:

• Primary sectors, as transforming natural resources into primary products, e.g., agriculture, fishing, forestry, and mining.
• Secondary sectors, as finished products used by end consumers and businesses that have factories, use machinery, and consume energy; e.g., aerospace, automobile, apparel, chemical, textile, consumer electronics, energy, metals, industrial equipment, or shipbuilding.
• Tertiary, or the Services sectors, delivering intangible goods and services, e.g., banking, insurance, transportation, retail, education, tourism, news, hospitality, or consulting.

Financial Markets use the Global Industry Classification Standard (GICS), developed by MSCI & Standard and Poor’s:

• Energy
• Materials
• Industrials
• Consumer Discretionary
• Consumer Staples
• Health Care
• Financials
• Information Technology
• Telecommunication Services
• Utilities
• Real Estate

The Bureau of Labor Statistics organizes industry sectors into defined classes (Table 6.1):

• Goods Producing sectors, e.g., natural resources and mining, construction, manufacturing
• Service Providing sectors, e.g., trade, transportation, utilities, information, Financial activities, professional and business services, education and health services, leisure and hospitality, legal, healthcare, and entertainment
• Agriculture, forestry, fishing, and hunting

Similar classification schemes assist in standardizing the descriptions of global commerce.

• The Tokyo Stock Exchange (TSE/TYO), or Nikkei, references Japan Standard Industrial Classification for business activity census.
• The European Commission classifies economies by the International Standard Industrial Classification  (ISIC), common to United Nations standards.

Watch this video about the Geospatial Revolution (5:13 minutes):

Consider the following questions:

In the very last statement (in the Geospatial Revolutions video), the UPS manager describes the company as one that is “an information company that just happens to own trucks” rather than a trucking company that uses information.

1. Why do you think the UPS manager described the company in those terms?
2. Has technology and information become more important than physical assets?
3. Regarding the "Field Service Management..." and "Roadnet Technologies Inc." articles, briefly what process has improved dramatically between the articles written in 2005, 2011, and today?
4. What other industries utilize logistics?

Glossary of Transportation and Logistics Terms

If you are not familiar with logistics, supply chain, or transportation terminology, a quick internet search of federal or state Department of Transportation sites provides definitions and context.

Just-in-Time

Supply chains rely on a system where components or assembled products must be delivered to a destination at the exact time needed. The container or vehicle transporting the goods is the movable warehouse.

Route

The manner or track that a shipment moves; including the carriers handling it and the points where carriers transfer responsibility for delivering the goods.

Routing

An optimized delivery plan to coordinate multiple destinations, products, and customers. The process calculates the most cost-effective geographic routes for delivering goods to multiple stops (nodes) by minimizing the distance and/or time elapsed. Routing maps are provided to drivers in electronic, audible, and dynamic navigation systems with options of integrated GPS, fuel efficiency measurements, and traffic analysis. Also known as route planning.

Supply chains

The logistical management system which integrates a sequence of activities; starting with delivery of raw materials to the manufacturer along a system of nodes and chains to delivery of the finished product to a customer.

Telematics

Networked electronic sensors and component computers which are integrated in an information technology system to transmit real-time data. Telematics connect vehicles on the move, road safety systems, logistics networks for asset management, electrical engineering, and company computer enterprise systems. Modern technologies create the networked environment using global satellite navigation systems (GPS, GNSS, GLONASS), cellular and wireless data transmission, IoT, and intelligent vehicle technologies.

Case Study, Part 1: Delivering the "Goods"

You have been hired as a consultant to help "Sweet Nothin's Tasty Muffins" to understand their delivery needs and suggest a solution for their business. Please review the Scenario below and identify the following:

1. How will geospatial thinking and technologies help the business?
2. Is their problem just a routing problem, or is there more to the story?
3. What "free" or "very low-cost"  online applications will help Sweet Nothin's address their needs?
   • RouteXL (RouteXL 20 - Free)
   • PC*MILER by Trimble MAPS
   • MyRouteOnline
   • Route4Me
   • Mapbox

Your challenge is to identify the best and lowest cost solution for Sweet Nothin's Tasty Muffins. There is a rumor that they may be acquired by a very large bakery and will need a full time consultant to help manage their growth. In some sense, this is a full-time job opportunity.

Scenario:

The bakery, "Sweet Nothin's Tasty Muffins," (located at 100 West College Ave, State College, PA, 16801) has built a good reputation over the last two years for high quality baked goods. The business has grown from delivery of muffins out of your home kitchen to the great downtown State College bakery location.

Recently, Sweet Nothin's been contacted by Starbucks' district manager for the Centre region and a couple of additional local coffee houses in nearby towns to provide all of their muffins, scones, and coffee cakes. This opportunity could provide a chance for real growth—Sweet Nothin's knows their baking staff can handle the increased demand, but they need to ascertain whether you can handle the delivery logistics associated with this sudden growth.

Currently, they deliver all of the goods to the handful of shops they do business with. They know they are going to have to hire drivers and secure delivery vehicles but they are not sure if they need 1, 2, or 3 drivers to handle the increased business. Their good friend, a local florist, tells them he uses a routing application to help with planning his deliveries—they want to try a software package to see if it will help with their dilemma. Starbucks and the other potential customers would like to make the switch to Sweet Nothin's baked goods soon, so they had better get started planning!

At least two of their bakers, Barb and Johan, are interested in picking up some additional hours, and, lucky Sweet Nothin's, they both have minivans with roomy cargo areas! Until Sweet Nothin's is reaping the rewards of the continuous increased business, they decide Barb and Johan are the perfect solution to their near-term plans.

Guidelines:

In addition to your own assessment of the situation and conversations with the coffee shop managers, the following are guidelines for solving their delivery dilemma:

• Barb and Johan will each drive their own minivans. Sweet Nothin's want to provide them roughly the same extra income, so they plan to have 2 drivers with approximately the same availability.
• Sweet Nothin's current baking schedule allows for the vans to be packed and ready to start delivering at 4 am. You would like to pay Barb and Johan roughly two extra hours wage, so Sweet Nothin's initial plan calls for deliveries to be completed by 6am.
• Starbucks has insisted that its deliveries arrive no later than 5:30 am to be in the counter cases when their stores open.
• It takes approximately 10 minutes for each delivery (to park, take the trays in and hand over the invoices). Sweet Nothin's will use a 10 minute service time to start their planning.
• Each driver can handle 10 orders in his/her minivan. (At this point, Sweet Nothin's is only planning 10 total "orders"—this should be more than enough, as combined, Barb and Johan can handle a total of 20 "orders".)

Key Consulting Steps in Selecting a Solution:

Step 1. "Drivers" You will need to create a driver record for Barb and one for Johan.

Make sure you include:

• Starting location (the routes will be roundtrip to/from Sweet Nothin's Tasty Muffins downtown bakery).
• Start and Finish times.
• Load Capacity.

Step 2. "Add Orders" listing all of the addresses of Sweet Nothin's potential customers.

Note: You may find problems with geocoding, based upon the data you got from your customers. (HINT: The airport is in the 16823 ZIP code. And while the Starbucks on N. Atherton has a mailing address in State College, it is technically located in Park Forest Village, PA.) You need to be able to correct addresses and geocoding when update your orders.

Also, you will need to provide the ability to adjust the orders to meet any special customer requirements.

Step 3. "Plan Optimal Routes" Once you've set all of the driver and order criteria to meet the guidelines, you can plan your routes! You may find it necessary to adjust certain elements to develop a desirable routing plan—remember, Sweet Nothin's is counting on you to spend their dollars wisely to efficiently plan their routing. (Hence, you may find it necessary to adjust your or your customers' expectations.)

Step 4. Once you have a route plan with which you're comfortable, save this route plan so you can return to it later.

Now, with this route plan established, move on to part 2:

Case Study, Part 2: Growing Pains

Congratulations—Sweet Nothin's Tasty Muffins continues to grow and experience success! But with all growth comes growing pains—consider variations in this section (Part 2) on your current routing solution for Sweet Nothin's.

Perhaps Sweet Nothin's should call their business Sweet Nothin's Tasty Muffins and Such? Starbucks has asked them to supply ALL of its local baked goods. It's time to revisit your routing solution—you're going to need to allocate their drivers differently to accommodate the growth at Starbucks.

Are you able to do the following with one solution and not another?

Step 1. Open your saved routing plan.

Step 2. Increase the "Load Units" for the three Starbucks locations from "1" to "3" to accommodate space in the vehicle for the additional delivery goods.

Step 3. Better increase the "Service Time" too—it won't take three times as much to unload, but perhaps you need 15-20 minutes at each location?

Step 4. Barb really prefers to drive in and near State College (where all three Starbucks are located)—assign Barb to the Starbucks locations.

Step 5. How do these changes affect your routing solution? What other accommodations will you need to make?

Skim any of the following material that interests you about Location Intelligence applications. While reading, think about the applications and the possibilities for other sectors.

Insurance

Breading, Mark. 2023. Powerful Use Cases Driven by New Geospatial Insights. Strategy Meets Action. Presentation (web).

Breading, Mark. 2018. The Most Important (and Overlooked) Tech. Location Intelligence Archives – Insurance Thought Leadership. Blog (web). 24 Jul 2018.

Insurers should consider an enterprise location strategy which improves the use of GIS to store georeferenced demographic and connected sensors data, new spatial technologies for indoor and 3D mapping, and open platforms to gain improvements through collaboration. The data scientist role is emerging in insurance with significant access to open source and third-party data on weather events and forecasts, geographic location attributes, and consumer behavior. 

Healthcare

Murray, Peter. 2018. Meet the growing demand for senior care facilities with a modern site planning approach. CARTO. Blog. 13 Jun 2018.

Healthcare site planning now considers population behavioral patterns and human geography. The author indicates a trend where more seniors are moving to cities and metro areas to retire close to adult children. Location intelligence provides decision makers criteria, optimal sites, and recommendations to locate new healthcare and assisted living centers to meet future senior needs.

Fradelos, E, et al. 2014. Health Based Geographic Information Systems (GIS) and their Applications. Acta Inform Med. 19 Dec 2014; 22(6):402-405. DOI: 10.5455/aim.2014.22.402-405

World Health Organization. 2024. WHO GIS Centre for Health: Timely and reliable decisions save lives. WHO, website.

Banking

Voorhees, John. 2018. Secrets to Successful Branch Distribution. Peak Performance consulting Group. 23 Aug 2018. Webinar.

Banks consider both location and site to grow and/or consolidate their branch banking operations. Locations and trade areas optimize where people shop, live, and commute; sites attract customers and align with local businesses. The financial intuition which creates the most convenient network will gain a greater share of customers and deposits.

Futurism Technologies. 2024. How Location Intelligence is Revolutionizing BFSI: 6 Must-Know Benefits. Futurism Technologies, blog. 22 Jul 2024.

Sustainability

Denchak, Melissa (2018). Flint Water Crisis: Everything You Need to Know. Natural Resources Defense Council (NRDC). 8 Nov 2018.

U.S. Geological Survey (USGS). (2020). New Report Presents a Framework for Assessing the Sustainability of Monitored Natural Attenuation. USGS: Environmental Health – Toxic Substances Hydrology Program. Online

Wiitala, S.W., Vanlier, K.E., & Krieger, R.A. (1963). Water Resources of the Flint Area Michigan. Department of the Interior, USGS: Geological Survey Water-Supply Paper 1499-E. The preservation of natural resources is not just a 21st-Century concern.

The U.S. Geological Survey (USGS) monitors water quality in surface waters and groundwater aquifers to study the availability, use, and quality of water for residential, business, industry, agriculture, energy production, and recreation access. Water is critical to balancing sustainable development and societal-environmental interdependence. Businesses and communities share a responsibility for the appropriate use of natural resources—to include water—without damaging the environment, conducting illegal activities, or drawing an unfair share of resources from society and nature. The Flint River crisis in Flint, Michigan highlights a recent example of harmful lead contamination in the public water sources impacting the health of citizens relying on their community.

Murphy reinforces tracing the connections of human-environment dynamics and understanding that what happens in one place affects or is affected by activities elsewhere (2018: pp.102-103). Geospatial analysis is central to modeling and confronting environmental sustainabilty challenges.

"Consider the local organic foods movement that has taken root in the United States and Europe over the past couple of decades. The movement was driven by a desire to promote sustainable local farms, undermine the power of corporate agriculture, and reduce the environmental impacts of the long-distance transport of consumables."

Utilities

Emison, Bill. 2018. myWorld: A radical approach to location intelligence for non-GIS users in utilities. SPAR3D. 1 Nov 2018.

The Utility sector includes facilities management, power generation and distribution, utility companies, and municipalities controlling infrastructure operations. The entire concept of Smart Cities highlights the connection of utilities, sensors, location intelligence, mobile communications, enterprise and cloud computing, and the ability for field workers to access accurate geospatial data.

Crawford, Jamie. 2022. The Era of Location Intelligence for Utilities. POWER Magazine. 2 May 2022.

Wachal, Dave. The Utility of Location: How Spatial Analytics Saved a Water Company Thousands. Water Online, Case Study.

Similar to Week 5, there is no specific deliverable required this week for your term project, but you really should be aiming to make some progress on your project this week!

Don't forget to allocate time this week to work on data gathering/research for your term project.

For the remainder of the term, if you have questions about your term project from which your classmates would benefit, please use the Term Project Discussion Forum - Questions, Answers & Advice. We will provide a link to the forum in the rest of the modules in Canvas. We will keep a running thread of project related questions, answers, and advice there through the rest of the course.