About
Starting Semester: Fall 2024Assigned: Yes
Location: Atlanta
Arauco North America
Client Profile
ARAUCO is a global manufacturer of sustainably-produced forest product solutions for construction, industrial, and retail markets. With over 120 facilities worldwide, we manufacture and distribute the industry’s most-comprehensive selection of wood composite panels, premium plywood, millwork, lumber, and FSC-certified wood pulp. From its mills in South America, ARAUCO ships over 18,000 containers to the United States and Canada annually through 21 ports of entry (including 11 inland ramps) and uses a network of third party run port warehouse operations located in strategic ports around the United States to serve its customers. Arauco’s corporate headquarters is located in Santiago, Chile, and Arauco North America’s headquarters is located in Atlanta, Georgia.Project Description
Problem/Need:Due to variability in ocean services for container shipments from South America and port terminal operations in North America plus the different service capabilities of our 3PL drayage & warehouse partners, Arauco North America’s ability to consistently provide inbound logistics services that exceed customer expectations in a cost effective manner is challenging.
Arauco would like to develop a simulation model that can be used to understand the effects that container shipment and port terminal variability and 3PL partner service capabilities have on service level and logistic service costs.
Overview:
For an individual port that could contain multiple container shipping companies and drayage/warehouse operations, Arauco would like to do the following:
- Determine the impact to service level and logistic costs when evaluating new 3PL partners based on historical/actual container shipment/port terminal data and 3PL partner service capabilities.
- For existing 3PL partner(s), use the model to compare actual service level and logistical cost performance compared to simulated expectations.
- Conduct what-if analysis based on changing one or more variables and determine the impact to service level and logistic costs.
Service Level KPI’s include:
- Dock to stock (time between container discharge and product received into warehouse inventory)
- Inside the Port (time between container discharge and container pulled from port)
- Outside the Port (time between container pulled from port and empty container returned)
Logistic Service Costs include:
- Demurrage and detention fees for containers used beyond their free days
- Drayage costs (including drayage, chassis charges, wait times, yard stop-off, yard storage, and other accessorial fees)
- Warehouse handling costs (includes stripping containers and receiving products into warehouse)