O.R./Analytics at Work Blog

The scene: April 16th, Regency Hyatt Grand Ballroom in Huntington Beach, California. INFORMS President Terry Harrison walks towards the podium on the stage and says: “And now the moment of truth. Srinivas, may I have the judges’ decision please? Ladies and gentlemen, please welcome to the stage to receive the first place 2012 Franz Edelman Award for outstanding achievement in Operations Research, the team representing……..TNT Express". At table 23 there is excitement and cheers. We did it! We won the Franz Edelman Award 2012!

Winning the Franz Edelman award really is amazing. I know the work of previous Edelman Award winners like Sloan-Kettering, Hewlett Packard, the Netherlands Railways and Midwest ISO. Being ranked among these top OR accomplishments is a great honour to me. The Edelman rewards outstanding examples of applied Operations Research. It’s the Super Bowl of OR, and I’m very proud that this year the team of TNT Express was selected first place. It’s not what we set off to accomplish when we started our first project at TNT Express back in 2005. That first project didn’t even contain much OR.
The first time we considered applying for the Franz Edelman Award was at the beginning of 2011. Several of Hein Fleuren’s colleagues at Tilburg University and some of my colleagues at ORTEC had suggested that we should submit our work with TNT Express for the Edelman Award competition. At first we had our doubts. Did the OR we had used at TNT Express match the level of sophistication of past Edelman Award winners? Were the accomplished savings significant enough? However, what appealed to us is that the Edelman Award rewards implemented work. After seven years of hard work on different levels of decision making within TNT Express a lot had been accomplished. After discussing it with TNT Express and thinking about it, we decided to go for it.

Applying for the Edelman Award gave us the opportunity to share TNT’s approach in applying OR and why it was successful. Of course it requires sound OR. As an OR consultant you have to construct the right model at the right level of detail to support the business decision at hand, an art in itself. However, that’s not the complete story. A key aspect of TNT’s success in my opinion is that from the start TNT had a strong focus on the organisational embedment of the programme, a reason for many projects (not only OR projects) to fail when that’s not taken care of. This embedment was accomplished by not just focussing on tools and technology (the OR) but also with strong project- and change management principles in place and a focus on the development of analytical skills and supply chain thinking. Marco Hendriks, Hein Fleuren and Jan Salomons developed a special training programme together with Tias Nimbas Business School to achieve that, the GO-Academy.
When we started the Global Optimisation (GO) programme in 2005, TNT Express wasn’t accustomed to using mathematical models or formal methods to support decision making. Based on our experience with other customers we started with easy to understand analysis tools that supported the visual identification of bottlenecks and provided suggestions to resolve them. As the awareness and understanding of optimisation methods increased at TNT Express, we also increased the level of sophistication of the models, making sure to keep pace with the decision making maturity level of the TNT operating units. That way, decision making quality improved and OR models and tools became standard equipment for decision making. One of our biggest challenges was in 2008 when TNT Express faced major challenges as a result of the financial crisis. Shipping volumes had gone down drastically which required immediate action. Being aware of the GO accomplishments thus far, Marie-Christine Lombard asked Hein Fleuren to work on this challenge. Supported by OR modelling and analysis, TNT Express was able to counter the challenges of 2008 and reduced costs significantly with minimal impact in service. With this success, OR modelling became a key asset for senior management decision making. Today, fact-based decision making capabilities have become available at the core of TNT’s business, the primary objective of GO.

In preparing for the Edelman competition, we worked as a team, as we did in the GO projects. Winning the award strengthens our bonds even more. Standing on the stage, receiving the cheers and applause really does something to you. Not to mention all the emails, text messages and tweets with congratulations. It proves that the GO programme really is special. Reading the takeaways from the conference on the internet, one appealed to me very much. Rob Ende states: “My biggest takeaway from their (TNT Express) presentation had nothing to do with their network optimization models. Rather, it was how they built an entire optimization “ecosystem” centred on their GO (Global Optimisation) Academy.” I guess that is what it takes to win a Super bowl, you have to live what you want to accomplish. With GO-Academy and Communities of Practice, we were able to build an ecosystem that allowed optimisation to flourish within TNT.