SL. No.

: To Be Assigned by ISCEA

2018 ISCEA
PTAK PRIZE
TEAM: BUET-0115-18

Team Member-1 Team Member-2

Name: Muhammad Abrar Islam Name: MD. Mahmudul Hassan

Signature: Signature:

Team Member-3 Team Member-4

Name: Sourajit Majumder Name: Raashiq Ishraaq

Signature: Signature:

Last Date of Submission: June 08, 2018

 INTRODUCTION AND OVERVIEW

Urbanization is a global phenomenon. It is taking place at a faster pace in the least

developed Countries of the world like Bangladesh. Increasing urbanization has
turned transporting freight from, to, and within urban areas into a major challenge.
Rapid and ongoing urbanization in Bangladesh has resulted in extreme levels of
traffic congestion. Bangladesh is the world’s most densely populated country with
993 people per square kilometer (Bangladesh Economic Review 2011). Like other
countries in the world, Bangladesh has also been experiencing intense traffic
problem which is increasing day by day. It is becoming one of the most intolerable
and burning issues for the country. Limited resources invested for the development
of transport facilities, the rapid population growth together with limited space
available for new roads, coupled with the rapid rise in transport demand, existence
of a huge number of non-motorized vehicles on roads, lack of application of
adequate and proper traffic management schemes are producing severe transport
problems in almost all the urban areas of Bangladesh. Below chart shows the loss
of working hour against years and average speed reduction of transport.

12 6
Average Speed of Transport(kmph)

Loss of working hour (million)

10 5

4
8

3
6
2
4
1
2
0
Year
0

2014 2015 2016 2017 2018 2015 2016 2017 2018

These graphs actually visualize the scenario of losing our productive time on traffic
congestion. The study of 2018 shows that Bangladesh is losing around 11% of
National Budget due to the traffic congestion.
 REDEFINING FUTURE & HORIZONTAL COLLABORATION

Road transportation is the predominant way of transporting goods in Bangladesh.

Other than traffic congestion, other problems include low load factors, empty
trips, long dwell times at loading and unloading points, large numbers of
deliveries to individual customers, longer lead times etc. The key challenge for the
future is rethinking the way existing infrastructure is used and how new
infrastructure is built, so that it is fully utilized and negative externalities are
minimized. One strategy that Industries can follow to reduce traffic burden is to
collaborate with other similar companies (horizontal cooperation). City logistics
initiatives have long suggested the need for collaborative and environmentally
friendly urban transportation that could alleviate the negative impacts of urban
transportation, but these face organizational and technological challenges of
collaboration. Given technological advancements and innovative business models,
concepts of collaborative urban transportation could contribute to a future
paradigm of more sustainable and customer-friendly urban transportation. The
European Union (2001) defines horizontal cooperation as “Concerted practices
among companies operating at the same level(s) in the market.” These companies
can either be competing or unrelated suppliers, manufacturers, retailers, receivers,
or logistic service providers that share information, facilities, or resources with the
goal of reducing costs and/or improving service. The main goals of horizontal
cooperation here are to reduce shipping costs and also to provide a faster
distribution service to customers.
Figure 1 shows a typical non-cooperative scenario, where each service provider
(square node) designs its own set of routes to deliver its own customers (set of
nodes represented by a common symbol).

In contrast, Figure 2 shows the same routing problem in a cooperative scenario,

where each customer is delivered by its closest provider. Comparison of both
figures provides a first intuitive idea regarding the benefits, in terms of routing
distances and times that can be achieved through horizontal cooperation.

By working together, multiple actors or stakeholders increase their efficiency

through sharing resources, such as vehicles, cargo consolidation or distribution
centers, or last mile delivery services.

Rise of “The New Asian Tigers” depends heavily on the existence of efficient supply
chain. And an efficient supply chain depends on how efficiently freight transports
are done. Road transportation there rose from 10% in 1980 to about 30% in 2013.
Overall, it is estimated that world freight transportation will raise about 50%
between 2000 and 2020. Co-operation is an efficient way to increase load factors,
thus avoiding lack of efficiency in transport activities. Horizontal collaboration (HC)
approaches can help raise these load factors in several ways.

GENERATING POTENTIAL SOLUTION

FORMATION OF MINISTRY CONCERNED WITH SUPPLY
CHAIN

To meet resolution to become "Dark Horse" in industrial sector, a potential

solution can be, redefining the contribution of ministries of Bangladesh
Government. A Ministry of Supply Chain can be formed. It will be a collaborative
platform of ministries under Bangladesh Government. It will incorporate all the
other ministries in formulation and administration of rules, regulations and laws
regarding trade and commerce in order to optimize the whole supply chain
process in Bangladesh.
The actions of this ministry in the collaborative process will be-

 Innovating new strategies, plans to overcome the traffic burden

 Focusing on renovation and development of infrastructures to gear up the
supply chain capabilities
 To bring the minister, secretaries of related ministry, and industry owners
in a round table discussion on a regular basis
 To accelerate the bill process timing in the cabinet to reduce traffic
congestion for the welfare of upcoming resolution of becoming “New Asian
Tiger”
 PROPOSED FUNCTIONS OF SUPPLY CHAIN MINISTRY

Generating new dimensions in Freight Transport by

motivating Business Organizations:
Bangladesh consists of many business organizations namely, ‘The Federation of
Bangladesh Chambers of Commerce and Industry(FBCCI)’, ’Bangladesh Garment
Manufacturers and Exporters Association(BGMEA)’, ‘Bangladesh Knitwear
Manufacturers and Exporters Association(BKMEA)’, ‘Bangladesh Association of
Pharmaceutical Industry(BAPI)’ etc. The "Supply Chain" Ministry will motivate
Industry owners via these organizations to cooperate and also facilitate the
increase of horizontal collaboration needed to fight traffic burden.

We propose a set of measures that can be taken by industries via The Ministry of
Supply Chain and related business organizations. These are as follows:

1. Multi Depot Vehicle Routing

Most of the companies in Bangladesh operate individually in case of freight
transport. But this makes the supply chain inefficient as vehicles travel long
distances and during return journey, has to return without loads. Suppliers and
manufacturers find their paths overlap, elimination of which will result in better
efficiency in logistics. The following figures depict the problems faced.

Figure 3: Uncooperative transportation leads to large distance travelling

 Figure 4: Individual Inefficient Efforts for freight transport

These Multi Depot Vehicle Routing Problems (MDVRP) can be overcome by

sharing the fixed assets such as warehouses and distribution centers in order to
consolidate production from several manufactures, thus reducing the number of
long-trip deliveries required. By sharing depot, less time is needed for L&T as the
transport vehicles would then have to travel shorter distance from their shared
depot. The steps needed to alleviate MDVRP's can be as follows,

Plan-1: Collaboration to share existing depots

Companies can share their existing warehouses and distribution centers

through collaboration to reduce transportation time. One company can easily
distribute to its remote center by using other company’s warehouse and
distribution center as shown;

Figure 5: Sharing depot leading to shorter travels and efficient L&T

 Plan-2: Collaboration to build new shared warehouses

Companies with close market areas can build warehouse and share space
and maintenance labor according to their needs to reduce the idle time of the
transport and minimize losses.

Figure 6: Distribution before building

shared warehouse

Figure 7: Distribution before building

shared warehouse
 2. Reduction of Empty Backhauls and Use of Rerouting
In Bangladesh 20-30% transport vehicle backhauls with no loads (Sudhir, Sameera).
This increases idle time and lowers efficiency. But by collaboration and
synchronization among the industries the empty loads can be filled to reroute to
work for partner organization to go from depot to depot without idle time. As
described by the steps,
 Collaboration of Transportation Fleet:
Industries interested in HC need to share their fleet of freight
transport among them. The vehicles will route among the depots
routinely. As an example, one company’s load has high volume and
low weight & another company’s load has low volume and high
weight. If they transport separately they will have to bear the
increasing cost fuel burnt due to traffic jam. If they use same
transportation system and sign a contract between them about
mobility sharing, the traffic burden will reduce. This process actually
will utilize the full space and weight capacity of transport which will
efficiently reduce traffic congestion.

Company A Company B

Weight Volume Unfilled Weight and Volume Weight Volume Unfilled Weight and Volume

Figure 8: Transportation occupancy before Mobility Sharing

 Company A's Weight Company B's Weight
Company A's Volume Company B's Volume
Unfilled Weight And Volume

Figure 9: Transportation occupancy after Mobility Sharing

 Rerouting:
As seen in Figure 10 below, without collaboration the fleet would have
to return to their respective depots without any load. These empty
vehicles would use time and fuel without any work assigned to them.
But if the fleet is rerouted to the partner depot as shown in the second
image rather than returning, there would be less emission, fuel usage
and idle time. Thus, load factors can be easily improved by
collaboration to reduce empty back-hauls when companies share their
logistics operations. After completing its round, a vehicle may stay in
another depot.

Figure 10: Collaborating with other industries to reduce idle time of L&T
Implementation Steps:
An Iterated Local Search (ILS) algorithm is proposed to obtain high-quality
solutions for this collaborative scenario. One of the many aspects to analyze in
horizontal cooperation is trust between entities, as many of them are competitors
(O¨ zener, 2008). So, the best-known-solution (BKS) are within the algorithm itself.
For both less than truckload (LTL) and full truck load (FTL) situation the algorithm
is valid. It is as follows,

Setting Up New Dimensions in Logistic Framework:

In association with Ministry of Road, Transportation and Highways, Ministry of
Railways, Ministry of Shipping, the Supply Chain Ministry is going to segment the
logistics system throughout the country to reduce the lead time of products supply.
Because of scarcity of place in developing road infrastructure, alternative
transportation system should be incorporated and developed.

 Developing Railway Systems:

Since 32% of overall area in Bangladesh is covered with railway,
ministry would facilitate this development by:
1. Increasing locomotives, wagons
2. Establishing double line in most of the long distant
communication from Dhaka.
Wagons can be used by more than one company. Horizontal
collaboration (HC) will play a vital role in making this effective.
 Promoting Water Shipment:
There are 44 operational stations and "Ghats" under ‘The
Bangladesh Inland Water Transport Authority (BIWTA)’. To
promote the operation through waterways, Stations have to be
modernized. More and more cargo vessels should be
introduced which could be used through collaboration of the
companies to use the most effective transportation using rivers
and sea port.

Establishing a Cloud based Supply Chain for Beneficiaries:

A cloud-based database management system of supply chain has to be established

in order to keep things under control. Necessary information regarding Warehouse
Management Systems, Transportation Management Systems, Enterprise
Resource Planning (ERP) will be uploaded to the database management system to
be monitored by civil executives working in The Ministry of Supply Chain to
accelerate the information flow for Horizontal Collaboration. The database will also
contain all the rules and regulations regarding logistics and supply chain activities.
This way, the system will aid in the implementation and enforcement of laws
regarding supply chain, and thus help alleviate traffic burden. The acts that can be
taken by ministry of supply chain are-
1. Connecting all the beneficiaries in a common platform through a high-speed
internet connection
2. Ensuring the flow of necessary information to create a collaborative medium
among the Industries.
 FORECASTED IMPACT OF HORIZONTAL COLLABORATION
According to specialists, 220 billion Tk. out of 370 billion Tk. can be minimized by
taking adequate measures in reducing traffic congestion. This is actually 60% cost
reduction. For safety, we are planning for 50% reduction. So, after simulating
various data, we get the following output curves:

8
Loss of Working Hour/day(bn)

0
2014.5 2015 2015.5 2016 2016.5 2017 2017.5 2018 2018.5 2019 2019.5
Year

Figure 11: Before the implementation of our proposal

6
Loss of working hour/day(bn)

0
2014.5 2015 2015.5 2016 2016.5 2017 2017.5 2018 2018.5 2019 2019.5
Year

Figure 12: After the Implementation of our proposal

 Reduction of loss is around 42% (expected)
We are expecting the reduction of loss from the sectors shown in the below
chart-

Expected Contribution(Reduction of 42%)

15%
30%
20%

35%

Multi Depot Vehicle Routing Reduction in Backhauling & Use of Rerouting

Introducing Waterway Transportation Introducing Railway Transportation

Finally, we strongly believe that our proposal is a quite feasible one tailored
specifically for the traffic situations existing in Bangladesh, therefore,
implementing our proposals will not only reduce traffic burden to a large extent
but will also bring a lot of profits and harmony to existing businesses in our country,
which in turn will provide a large boost to our existing economy.