Funartech, optimizing logistics with artificial intelligence

Série – Histoires à succès

Founded in Montreal in 2017 by Dr. Nikolaj Van Omme and Dr. Dania El-Khechen, Funartech combines machine learning and operations research to help companies solve their industrial problems. We previously covered the company in 2019, then in its very early years. Since then, they’ve successfully answered Aisin Group’s logistics challenge. 

Aisin Group’s challenge

The Aisin Group is a major Japanese supplier of automotive parts and systems that is part of the Toyota Group. With an estimated value of US$35 billion, the Fortune Global 500 company has more than 200 consolidated companies and employs approximately 120,000 people, including 14,000 employees in America. The Aisin Group was looking to solve its Vehicle Routing Problems and optimize delivery routes from warehouse to factory. 

Every day, tens of thousands of vehicle parts are delivered from their suppliers to their warehouse and then transferred to various factories across Japan using cross-docking. All the routes were done manually by specialists who ensured that each part was transferred using the optimal route. This manual route planning poses several challenges to the speed, accuracy and predictability of our logistics – creating inefficiencies in key business areas. The volume of part deliveries changes regularly on a daily basis and therefore requires frequent optimization of route planning, which is currently difficult given the manual effort required. In addition, manual route planning is time consuming and does not guarantee the most optimal route.

Funartech’s solution

After a thorough review, prioritization and several meetings, Montreal-based startup Funartech was selected to develop a proof of concept with the Japanese automotive components supplier. 

After six months of collaboration, a first prototype was able to reduce the number of trucks needed to deliver parts between Aisin Group warehouses by 30%. The optimization of this first prototype, on a huge instance of real data, relies in particular on operational research. To achieve this, Funartech collaborated with Professor Michel Gendreau of the Ecole Polytechnique de Montréal, a world-renowned expert in this field who was a key player in developing the solution.

“Among about 30 entries, we saw a high potential in Funartech and decided to collaborate with them. We needed a cross-cultural collaboration between Japan and Canada and a solution to the problem in a short period of time. They overcame this challenge with hard work and came up with an excellent solution.”

– Dr. Takanori Ide, Aisin Group.

Next steps in the collaboration

Aisin was the 8th project, but also the 8th success for Funartech. For a start-up company, this is a significant success rate that allows it to continue to pursue more deals with other major companies.

Since the initial collaboration was completed, Funartech has maintained a business relationship with the Aisin Group that allows them to continue for a second collaboration.

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