1 of 38

��Location Optimization in the Construction Supply Chain� ��CSU-Pueblo�Justin Holman, PhD�02-24-17�

Copyright 2017 TerraSeer, Inc. All rights reserved.

2 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

​

Mapping Exercise

3 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

​

Mapping Exercise

4 of 38

Background

  • Education
    • Centennial High School
      • Diploma, 1986
    • Claremont McKenna College
      • B.A., Philosophy and Mathematics, 1990
    • University of Oregon
      • Geography, GIS, Spatial Statistics, Cartographic Visualization
      • M.S., 1996
      • Ph.D., 2004
    • Northwestern University - Kellogg School of Management
      • Certificate, Designing and Managing the Supply Chain, 1998

​

[Pro Tip: If you go to grad school, choose a degree that won’t require massive debt; i.e., after a Bachelor’s get paid, even if it’s not much, to learn.]

​

5 of 38

Background

  • Professional Experience
    • Dynamix Inc.
      • Software Development
    • LogicTools, Inc.
      • Software Development, Supply Chain, Network Optimization, Map UI
      • Acquired by IBM
    • US Geological Survey
      • Data Visualization, Spatial Statistics, Environmental Modeling; completed Ph.D.
    • MapInfo
      • Retail Location Research, Applied Statistical Modeling, Custom Software Development, Business Consulting, Sales
    • TerraSeer
      • Entrepreneurship, SaaS Development, Business Management, Virtual Office
      • Automotive Aftermarket, Construction Supply Industry

[Pro Tip: Choose jobs where you get paid to learn.]

6 of 38

Background: Select Clients

7 of 38

Background

  • Combination of Skills-Interests
    • Data Analysis and Visualization
    • Retail Demand Forecasting
    • Supply Chain Optimization
    • Software Development
    • Industry Insight via client projects

​

    • “Big Data” Analytics Opportunity
      • Automotive Aftermarket
      • Construction Supply
      • Hard goods distribution

​

[Pro Tip: Planning ahead for specific career? Not always effective. A unique set of skills and perspective may become more valuable than mainstream training.]

8 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

​

Mapping Exercise

9 of 38

Overview of Construction Supply Chain

10 of 38

Overview of Construction Supply Chain

Raw Materials

Manufacturing

Assembly

Engineering

Distribution

11 of 38

Overview of Construction Supply Chain

12 of 38

Overview of Construction Supply Chain

13 of 38

Overview of Construction Supply Chain

14 of 38

Overview of Construction Supply Chain

Types of Location Problems

​

Raw materials

Production/Plant location

Assembly/Kitting

Distribution Centers (DCs)

Cross docks

​

Branch

​

Retail Location

Showroom

Construction Site

15 of 38

Overview of Construction Supply Chain

Types of Location Problems

​

Raw materials

Production/Plant location

Assembly/Kitting

Distribution Centers (DCs)

Cross docks

​

Branch

​

Retail Location

Showroom

Construction Site

Min Cost

Max Revenue

16 of 38

Overview of Construction Supply Chain

Types of Location Problems

​

Raw materials

Production/Plant location

Assembly/Kitting

Distribution Centers (DCs)

Cross docks

​

Branch (Counter + Delivery)

​

Retail Location

Showroom

Construction Site

Min Cost

Max Revenue

17 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

​

Mapping Exercise

18 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

2 Competing Objectives

- Maximize Revenue

- Minimize Delivery Costs

​

Mapping Exercise

19 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

2 Competing Objectives

- Maximize Revenue

- Minimize Delivery Costs

​

Mapping Exercise

20 of 38

Sugar Land, TX Example

21 of 38

Sugar Land Model Trade Area

22 of 38

Disaggregate Trade Area Forecasting

Counter

$20,009

Delivery

$207,653

Total

$227,662

Model predicts anticipated counter sales and delivery sales originating within each trade area ZIP Code

23 of 38

Branch Sales Forecasting

Sugar Land

$18,500,000

Model calculates a branch sales forecast by summing ZIP forecasts and making adjustments (see below)

Adjustments: Beyond Sales (proportion of sales projected to come from beyond the trade area), Branch Size (model assumed an average branch size of 16,000 gsf), Region/DMA (White Cap achieves stronger performance in some markets than others), Contractor Density (markets with exceptionally high contractor counts achieve stronger sales)

24 of 38

Branch Sales Components

Sugar Land

$18,500,000

RES

38%

CAD

32%

IC

11%

GWP

5%

All Trade

14%

Model also provides anticipated sales distribution by customer category

25 of 38

Houston Market

Results suggest that 3 additional $10M+ branches can be supported in the Houston market

26 of 38

27 of 38

WINNERS

LOSERS

28 of 38

Houston Market

Results suggest that 3 additional $10M+ branches can be supported in the Houston market

29 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

2 Competing Objectives

- Maximize Revenue

- Minimize Delivery Costs

​

Role of Mapping and Visualization

30 of 38

31 of 38

32 of 38

Miami Baseline

Demand Met: $29.9 M

Delivery Cost: $1.6 M

Average Distance: 22 mi

33 of 38

Miami Optimized

Demand Met: $32.5 M

Delivery Cost: $1.5 M

Average Distance: 20 mi

34 of 38

Miami Optimized – Add 1

Demand Met: $32.5 M

Delivery Cost: $0.5 M

Average Distance: 7 mi

35 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

​

Mapping Exercise

36 of 38

Branch Location Problem:

What is the optimal construction supply branch deployment strategy in Denver Metro?

​

37 of 38

Overview

Background/Experience/Perspective

​

Overview of Construction Supply Chain

The Branch Location Problem

​

Mapping Exercise

​

Why should maps be used as often as spreadsheets?

​

Homework Assignment: Read blog post entitled “Geospatial Visualization in Business: Bringing John Snow into the Boardroom”

​

​

38 of 38

�Visit me at justinholman.com

Copyright 2013 TerraSeer, Inc. All rights reserved.