Content area
Full text
Waste Management (WM) obtains one third of its revenue from landfill disposals and two-thirds from waste-collection services. As most of the revenue comes from collecting trash, improving efficiency in operating the fleet improves the bottom line. After a flurry of acquisitions and a merger with USA Waste, WM found itself with a large fleet of vehicles whose routing, dispatching, maintenance, and management were decentralized. WM recognized that it could reduce operating costs by improving its use of assets. It contracted with the Institute of Information Technology to develop WasteRoute, a comprehensive route-management system that took into account WM's specific routing concerns and provided broad benefits. Initially, the target audience of the system was the dispatchers and indirectly the drivers. Sales and customer service also benefited because WasteRoute integrated the sales, customer service, and operations departments. The system reduced operating costs, provided better customer service, and determined appropriate prices. WM deployed WasteRoute across the nation beginning in March 2003. By the end of 2003, WM had 984 fewer routes, saving $18 million. It estimated that its savings for 2004 due to the reduction will be $44 million. As it extends the system to additional areas, it expects additional route reductions.
Key words: industries: transportation, shipping; transportation: vehicle routing.
Most US residents consider garbage collection a required service. As a result, there are many waste collection companies in the United States that compete based on price. Waste Management, Inc. (WM) is unusual in focusing on improving customer service to distinguish itself in the market.
WM made an enterprise-level investment in improving service to address several operational inefficiencies. First, after a string of acquisitions in some areas of competing companies, WM had overlapping routes with two trucks serving customers on the same street. It was obvious it needed to improve routing in these areas. Second, route planners or drivers sequenced the stops on the routes. When they had enough experience, this method worked fairly well, but it led to a host of problems for Sales and Customer Service. For example, a salesman wanting to offer service to a prospect might have difficulty determining the optimal route for the customer to ensure the best service at the least cost. Drivers were not required to inform the route planners...