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SAS optimization software saves Hub Group $11 million – 2200% ROI

Hub’s system is 2010 Wagner Award finalist for excellence in operations research

CARY, NC  (Jun. 01, 2010)  –  Fierce competition drives Hub Group to continually improve efficiency. To quickly resolve complex planning problems, the intermodal freight rail transportation company selected SAS, the leader in business analytics. Powerful SAS Analytics software, SAS/OR, simplifies even the toughest decisions for customer service representatives and dispatchers. Planning, managing and tracking intermodal resources through a new integrated system have made Hub more effective and profitable.

Hub’s SAS-powered production decision-support system paid for itself through performance improvements in three months. SAS/OR’s benefits were particularly impressive in yield management and container allocation. In the first full year using the system, revenue per load rose 3 percent and container velocity jumped 5 percent. The net return was $11 million in savings – 22 times its initial investment. 

Executives are pleased with the result. “The system enables Hub to make more accurate decisions because it gives staff a clearer and broader picture of the network’s current and future conditions,” Gregg Grabijas, Assistant Vice President, Hub Group. 

Hub’s system is a 2010 Wagner Award finalist for excellence in operations research. Using SAS/OR, the system incorporates optimization, scheduling, and simulation modeling and solution capabilities in one adaptable environment. Supply-and-demand forecasts project container capacity excesses and shortfalls. Forecast error distributions and load profitability predict the value of regional container capacity. Ultimately, Hub Group can accept or reject tendered loads to maximize container yield and allocate containers of different cost structures among accepted loads to minimize short-term costs and maximize profitability. 

“To limit risk, disruption and cost during implementation, we matched Hub’s new production decision support system with the existing organization and process,” said Michael Gorman, Associate Professor at the University of Dayton School of Business and President of MFG Consulting Inc., who developed Hub’s decision support system. “The transition was smooth. SAS/OR guides daily decision making of Hub’s frontline employees. The increased operational efficiency supports Hub’s growth goals.” 

Determining “the best”

SAS/OR software provides a powerful array of optimization, project scheduling and simulation techniques to identify the actions that will produce the best results, while operating within resource limitations and tight restrictions. SAS Analytics are backed by the industry’s most comprehensive consulting, training and support services to provide significant return from IT investments.

About SAS

SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know® .

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