Research Of The Algorithm And Bid Optimization Sourcing System For Philips' Sea LCL Procurement Process

With the acceleration of globalization, the sea transportation is getting more and more important in the international logistics market. According to statistics, more than two-thirds of the total volume in international trade, and almost 90% of China's imports and exports were done by sea transportation. In Philips, one of the largest electronics company in the world, the situation is the same as that. The sea transportation plays a key role in Philips'logistics transportation.Due to the expertise and cost advantages, the third party logistics has increasingly occupied the logistics market. As an example, the LCL transportation procurement in Philips we described in this article is achieved by purchasing the third-party logistics. Before the deployment the system we designed in this paper, Philips had developed its own transportation procurement model and the method to select logistics service providers, which were completed by manual work. However, during the implementation, Philips was, from time to time, got in trouble with some time-consuming tasks or even some impossible issues for manual.According to the requirements from Philips, we designed and implemented a web-based optimization system to simulate the transportation procurement process for Philips'less container load, also the system provides the optimal allocation plan for Philips to make decision in order to minimize the logistics cost in this paper. This system was deployed and has used for Philips'less container load transportation procurement since then.At the beginning of this paper, we briefly described the background of the topic and the research situation at home and abroad about the service provider selection problem. In the second part, we focused on Philips'transportation procurement model and the design and implementation of this system which includes technology selection, database design and system module implementation. We also explained several scenarios which were using in Philips'LCL transportation procurement and their mathematical models in this paper. Finally, we gave out the benefits that this system brought:1) Efficiency and accuracy improvement. The system not only eliminated the need for large amounts of data validation and data calculation, but also greatly shorten the time to generate various reports and the allocation plan.2) Better collaboration among the departments in Philips. The system provides the possibility to cooperate more conveniently among the Forwarding & Distribution and different Product Divisions and Business Units during the transportation procurement process.3) Reduce cost. On the one hand, the system helps Philips to generate and find the optimal allocation plan to minimize the logistics cost under different kinds of constraints. On the other hand, the system saves the company's human resources costs by bringing the efficiency gains for Philips.