Presentation on theme: "M2M in the Supply Chain Mitigating Risk, Improving Process Chris McLoughlin C.H. Robinson Worldwide Ray Flemming Flemming Cargo Securement Nikki Cuban."— Presentation transcript:
M2M in the Supply Chain Mitigating Risk, Improving Process Chris McLoughlin C.H. Robinson Worldwide Ray Flemming Flemming Cargo Securement Nikki Cuban OnAsset Intelligence CARGO x
C.H. Robinson and the growth of the 3PL Market M2M enhancing C.H. Robinson’s solution portfolio Mitigating risk in the supply chain by understanding the criminal process Overcoming application development challenges Session Topics 3PL Services Security M2M
One of the world’s largest third party logistics (3PL) providers: Freight and transportation logistics Outsource solutions Fresh produce sourcing Information services Publically owned and traded on NASDAQ (Symbol: CHRW) $7.6 billion in 2009 gross revenue 47,000 transportation providers under contract globally 35,000 customers worldwide 7.5 million shipments handled in 2009 * C.H. Robinson: Who we are.
U.S. transportation and logistics spend = approximately $1 trillion U.S. for-hire truckload market = approximately $350 billion Estimates vary but we believe approximately 10-15% goes through brokers/3PL Industry is highly fragmented – 500,000+ registered motor carriers – 96% of motor carriers have 20 or fewer trucks – Approximately 10,000 registered brokers 3PL market share is growing Technology increasingly essential to competitiveness Transportation Market: Competition is increasing
Supply chains are more competitive and a differentiator Globalization, volatility and reduced inventories have increased need for: – Technology – Flexibility – Visibility – Strategic resources Economic pressures to reduce overall supply chain costs Large 3PLs can offer leveraged economies of scale 3PL: Growth of the 3 rd Party Logistics Provider
U.S. Dept of Justice approximates cargo theft at $30B annually Industry experts measure year over year increases in theft activity FBI categorizes cargo theft as a “gateway” crime Insurance underwriters estimate economic impact at 10X retail value – Supply Chain interruption – Vendor dissatisfaction – Branding & warranty issues – Product safety concerns Market Driver for M2M: Supply Chain Risk, Cargo Theft
Customer Specific Cargo Security Program Risk profile analysis Carrier selection Carrier validation Covert cargo tracking Modal management Carrier education Shipper education Site security audits In-transit protocols Alter networks Risk financing In-transit Visibility M2M Applied to 3PL Market: Cargo Security Solutions Situational Awareness
Focus on the cargo – Intelligent warning system – Integrated Security services – Flexibility to meeting customer-specific cargo needs – Broad capability to address global presence Must be easy to manage – Easy to implement program amongst diverse carrier network – Low training costs – Smooth procedure for reverse logistics Must support compliment operating procedures The M2M Application: Requirements for a solution in 3PL Market
Device – SENTRY Predictive event intelligence Multi-function sensor capabilities Multi-modal capabilities including Air Multi-mode communication and location technology Global service area Covert placement Cargo tracking Extended battery life Software – Vision Platform Real time visibility EDI /Ecommerce capable External data feed integration Device specific sensor setting rules engine Enhanced geofencing Customizable alert and notification management Industry leading mapping and location display Monitoring – FCS Inc. 24/7/365 monitoring Staffed with trans industry professionals Redundant monitoring centers Proven alert and recovery management Reverse logistics services Integrated Security Solution Proactive cargo security measure Enhanced capacity sourcing In-transit supply chain visibility Supply chain integrity assurance Process efficiency through system automation Real time situational analysis Supported by supply chain professional with logistics and transportation specialization 3PL Services Machine-to-Machine Services Transportation Industry Security Enhanced Solution Portfolio: Integrated Transportation Services
24 x 7 Monitoring Platform Investigations Claims Processing Carrier Driver Solutions Policy & Procedure Solutions Legal Solutions Recovery Services Develop in-depth understanding of cargo theft activities and apply monitoring to reduce visibility gaps during the transportation process Our Goal: Proactive Intervention of the Cargo Theft “Market” FLEMMING CARGO SECUREMENT
Falsification of credentials Trailer Decoys Trailer Theft Off-route, unauthorized unloading of cargo Before Applying a Solution: First, Understand the Problem The bad guys are creative too! Common Themes in the Criminal Process
Bad guy scenario: Falsification of Records
The license plate on the tractor, used by the suspects, was reported stolen from Ontario on October 24, The missing trailer has the numbers “411772” marked across the rear exterior doors. Bad boys bad boys what you going to do when they come for you bad boys bad boys Bad guy scenario: Trailer Theft
Customer Theft Successes: 1 st Load Stolen $162,356.00, 2 nd Load Stolen $185, and 3 rd Load Stolen $252, Total Claims Paid Out???? Bad guy scenario: Hook and Unhook, Stealing Cargo
ShipperSENTRY™ DevicePackagingStagingLoading Transportation Monitoring ConsigneeUnloading Return Charging Theft Early Warning Package Open Warning Dwell Time On Time Delivery Charge Reminders Excessive Shock Warning Return Reminders Proactive Recovery In-Transit Visibility Process: Mitigating Risk
Step 1: SecurityStep 3: Continuous Improvement Business Intelligence Step 2: Situational Awareness When did it leave? Where is it now? How long has it been there? What route is it on? Is it on the right route? When did it arrive? Was receiving ready for it? Did it break? Is it the right temperature? Was there excessive humidity? Is it moving? Was it broken into? How fast was it going? Performance Analytics Customs Notifications Condition Reports Route Optimization Insurance Reductions Improved Claims Processing Invoice and Audit Savings Chain of Custody Management Security and Supply Chain: M2M Should Enhance the Complete Process
Monitoring Priorities: Our expectations Is the cargo being stolen? What is the next stage in the supply chain?
The Challenge: Detecting a Process and Optimizing a Workflow M2M Application Requirements Theft Event Detection Supply Chain Management Visibility Optimized End User Workflow Security Monitoring User Supply Chain Visibility System User
Challenge: Theft is not an event, it’s a process.
Sensor Awareness: How to “process” theft Fork lifts Palette Jacks Dock bumps Hook / Unhook Events Locations Sensors readings mean different things based on where they are and what’s going on.
Shipment Diversion Rule: Processing Potential Theft And reduces time to data interpretation Shock sequence G-force Location Time-based analysis Increasing remote awareness and monitoring efficiencies by developing application and location specific algorithms
Challenge: Integrity of Data Collection What is the orientation and packaging of the device? Bubble Wrap ?Cardboard ?Masonite ? How is it being returned? Reverse Logistics ?
Challenge: There is a lot of cargo on the road, which means a lot of data to monitor - Tens of millions of cargo shipments daily. 100 – 600 motion notifications per hour 700 shock alarms per day Goal: Eliminate excessive alerting procedures to optimize monitoring process, and catch suspect situations Now only 15 notifications per trip to highlight operator awareness of possible shipment diversions Previous experience After the new rule:
Staging Events Loading Events Loading Events Handling Events Trip Events Arrival Events Arrival Events Reverse Logistics Events Location Temperature Pressure Light Motion Shock Vibration Speed Humidity Process Monitoring Cargo Life-Cycle Management in the Supply Chain
Staging Events Loading Events Loading Events Handling Events Trip Events Arrival Events Arrival Events Reverse Logistics Events Location Temperature Pressure Light Motion Shock Vibration Speed Humidity Process Monitoring Transportation Mode Monitoring Air Land Sea Transportation Mode Monitoring Air Land Sea
Lessons Learned: Supply Chain and M2M Must Work Together Theft is a process, not an event. M2M isn’t everything, packaging matters too. The time it takes to interpret data must be reduced. Extending M2M in 3PL requires the application to understand the entire journey of the cargo. Optimizing the application experience requires partners to work together. 3PL Services Security M2M
Thank you! Chris McLoughlin C.H. Robinson Worldwide Ray Flemming Flemming Cargo Securement Nikki Cuban OnAsset Intelligence CARGO x