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Michael Wolfe 1.212, Introduction to ITS, Lecture 11 Massachusetts Institute of Technology March 17, 2003 CVO & Intermodal Freight: ITS Benefits for Business.

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Presentation on theme: "Michael Wolfe 1.212, Introduction to ITS, Lecture 11 Massachusetts Institute of Technology March 17, 2003 CVO & Intermodal Freight: ITS Benefits for Business."— Presentation transcript:

1 Michael Wolfe 1.212, Introduction to ITS, Lecture 11 Massachusetts Institute of Technology March 17, 2003 CVO & Intermodal Freight: ITS Benefits for Business Courtesy of Michael Wolfe. Used with permission.

2 Making Sense at the Intersection of Supply Chain Systems Freight Operations Tracking & Monitoring Technologies Business Economics Security

3 Objectives and Outline u Put CVO in context u Major challenge of Intransit Visibility u Key technologies u Business benefits for freight operations u Intermodal freight security u Technology trend that will change best practices u Looking ahead to Dynamic Flow Control

4 Putting CVO in Context

5 The Big Picture on CVO & Freight CVO Technologies Supply Chain Integration Intermodal Freight Efficiency & Effectiveness Enhance Enables

6 Evolution of CVO u Traditional ITSA approach –Emphasis on public-private interfaces »Electronic credentialing »Regional automated oversize/overweight permitting u Transitional IFTWG approach –Emphasis on intermodal freight »Enhance fleet operations »Improve customer service u Emerging CWG approach –Emphasis on security balanced with efficiency

7 Supply Chain Integration u Major trend knits together shipper, carrier, and receiver information systems & business processes –Competition & financial incentives drive it –New information & communication technologies make it feasible Inefficiency anywhere in the supply chain affects everyone in the supply chain Try replacing inefficiency with vulnerability

8 The Really Big Picture CVO Technologies Supply Chain Integration Intermodal Freight Efficiency & Effectiveness Enhance Enables Deregulation set the stage to exploit IT

9 CVO Also Feeds Intransit Visibility CVO Technologies Supply Chain Integration Intermodal Freight Efficiency & Effectiveness Enhance Enables ITV Quality data on status of goods & equipment in trans. pipeline Accuracy Timeliness Completeness Security

10 The ITV Challenge

11 ITV is a Long-term Challenge u Laments and complaints –Operators: Wheres my equipment? –Customers: Wheres my stuff? u Nested freight relationships hinder data quality –Every shipment is a chain of transactions

12 Nested Freight Relationships Conveyance Container Pallet Multipack Part Every shipment is a chain of nested transactions that should be transparent All rights reserved. May be reproduced with credit to the North River Consulting Group. (Courtesy of Michael Wolfe.)

13 Modern Stack Train Loader (Courtesy of Michael Wolfe.)

14 Clifford Maersk 6600 TEU, 24.5 Knots, 1999 (Courtesy of Michael Wolfe.)

15 Loading Chassis for Drayage and Linehaul (Courtesy of Michael Wolfe.)

16 The Dromedary Drayman (Courtesy of Michael Wolfe.)

17 Focus on Automatic Identification Technologies (AIT)

18 CVO-Related Technologies u AIT –Source data automation u Data exchange –EDI and Internet u Data integration

19 Automated Identification Technologies –Bar code »Linear and 2D –Contact technologies »E.g., Smart cards, mag stripes, laser optical –Non-contact technologies »E.g., Radio frequency, digital video

20 The Macro Trend in Freight ID is Towards Automatic Surveillance RFID tag readers, 1995 Location tracking, 1988 Two-way digital comm., 1988 Cell phones, >1985 Pay phones, ~1930s Telegraphs, >1844

21 Auto ID Technologies Conveyance Bar code & 2D labels RF tags, DSRC GPS capability Container Bar code & 2D labels Optical cards, tags, labels RF tags Pallet Bar code & 2D labels Optical cards, tags RF tags Multipack Bar code, 2D labels Optical cards, tags Embedded RF tags Part Bar code, 2D label Inscribed part # Embedded RF tags (Courtesy of Michael Wolfe.)

22 u License plate identifiers on the freight linked in multiple data bases –Customer data bases hold contents information –Carriers track equipment location –Transaction confirmations passed via EDI or internet Best Practices in Freight ID Today

23 u Specifics vary by market niche –Barcodes-and-databases »Retail and resupply –Dumb RFID tags and smart networks »Railroads, few container operators –Satellite transponders and smart networks »Long haul truckers Best Practices by Niche Retail and resupply Railroads, few container operators Long-haul truckers

24 Approaches to Location Tracking u Choke point or signpost reports –Fixed readers –Short range communications –Tag must pass close to a reader u Mobile reporting –Long-range communications –Location identification –Can include 2 way digital communications

25 Tagging vs. Tracking Conveyance Bar code & 2D labels RF tags, DSRC GPS capability Container Bar code & 2D labels Optical cards, tags, labels RF tags Pallet Bar code & 2D labels Optical cards, tags RF tags Multipack Bar code, 2D labels Optical cards, tags Embedded RF tags Part Bar code, 2D label Inscribed part # Embedded RF tags (Courtesy of Michael Wolfe.)

26 Benefits of Real-Time Location Tracking and Status Reporting

27 Approaches to Location Tracking u Choke point or signpost reports –Fixed readers –Short range communications –Tag must pass close to a reader u Mobile reporting –Long-range communications –Location identification –Can include 2 way digital communications

28 Uses of Real -Time Location Tracking u Role Play: –Youre the chief planner in a major transportation company –The CEO has to give a speech about real-time location tracking u Your job is to outline the key benefits –Notes

29 Value of Real -Time Location Tracking 1. Efficiency and productivity 2. Service quality 3. Shipment and service integrity

30 1. Efficiency and Productivity u Reduce errors, wasted effort, and re-work –Save process and cycle time –Save labor hours u Optimize assignment of equipment and people –Improve quality of life for operators u Optimize across functional areas –Operations, maintenance, labor relations u Reduce slack capacity and inventory

31 2. Service Quality u Improve reliability –Better schedule adherence u Increase operational flexibility –Advance warning of disruptions –More ability to respond to priority changes –Ability to divert shipments en route u Improve user and customer confidence

32 3. Shipment and Service Integrity u Better cargo security u Less theft of services u Mitigate some losses in progress u Enhance safety u Reduce insurance premiums

33 More Excerpts from the AIT Business Benefits Model

34 AIT Capabilities, Benefits, and Users u AIT capabilities, properly implemented, yield business benefits u Benefit matrices vary among classes of users –What does the benefit matrix look like for major sets of AIT users? Types of Users Capabilities Benefits –What specific capabilities drive the realization of benefits?

35 AIT Capabilities, Benefits, and Users The North River AIT Business Benefit Model includes all three dimensions Types of Users Capabilities Benefits

36 Dimension 1: Five Capabilities Produce Benefits 1. Read an RFID tag--or other device –recording an implicit transaction 2. Carry detailed data on a read/write tag 3. Record sensor input data on the r/w tag –such as temperature, load/empty,door open 4. Mobile location determination 5. Long range communication

37 Dimension 2: Three Types of Business Benefits 1. Efficiency and productivity 2. Service quality 3. Shipment and service integrity

38 The North River AIT Business Benefit Matrix The North River AIT Business Benefit Matrix

39 AIT Benefits Vary by User u AIT benefits are not uniform across types of industries, nor within industries u There are typical patterns within industries, especially within segments –Sophisticated vs. less sophisticated firms

40 Applying the Model to Different Types of Industry –Shippers »Manufacturers, distributors, retailers –Transportation carriers »Container operators, air freight, railroads, truckers –Transportation-based service providers include »Refuse haulers, cement delivery, package delivery

41 Dimension 3: The Type or Class of User

42 Intermodal Freight and Security

43 Three Views of Supply Chain Security u Containerization magnifies security risks u Security measures threaten efficiency u Supply chain tools can improve security while improving efficiency Technology can support both goals when well conceived and well executed!

44 Requirements for Supply Chain Security u Assured integrity of conveyance loading and documentation u Significantly reduced risk of tampering in transit u Accurate, complete, and timely information about shipments

45 Improve Visibility and Control u This is the most common recommendation to improve both security and productivity u There are major institutional and technical challenges

46 Visibility Discussion is Confusing u Visibility of what? –Visibility of items and assets u By what means? –Event-driven data and integrated systems u In what timeframes? –Timeliness keyed to needs u From what sources? –Data from shippers, carriers, and third parties

47 Technology Developments That Will Change Best Business Practices

48 What Will Change the Business Model for Supply Chain Management? u Powerful, long-term trend in information technology will move us beyond license plate barcodes-and-databases Continuing improvement in form, function, integration, reliability, and cost of information technology components

49 Key Developments to Watch u Cheaper real-time ID and tracking u Auto-networking tags u Multi-mode readers u Productizing of system integration u Effective hybridization Cheaper real-time ID and tracking

50 Cheaper Real-Time Tracking u Better technology and growing volume produce dramatic cost improvements –GPS and other GLS –Low Earth Orbit satcom –Dual mode commo with satcom backup –Phone location technologies Prime new applications will start with tracking untethered trailers and chassis

51 Cost Trend in Real-time Transportation Monitoring -Qualcomm truck system, ~$2500 -Vantage trailer tracking, ~$700 -SkyBitz location monitor, ~$400 -E-911 cell phones, ? These are illustrative examples Costs are negotiable--volume is a big factor Monthly communication costs are also important The capabilities are very different

52 If Supply Chains are to be... u Speedy u Nimble u Precise u Secure...then cheaper real-time tracking and monitoring will play an increasingly important and-- eventually--ubiquitous role

53 Looking Ahead to Dynamic Flow Control

54 Looking Ahead u Exploiting multiple technologies for Dynamic Flow Control –ITS/CVO –Supply Chain Integration ITV is necessary but not sufficient

55 Moving Beyond ITV Carrier Mgrs Worldwide Transport Asset Status Inventory Mgrs Flow Control Processors Worldwide Stock Posture Visibility: - Assets -Capacity Thresholds -Performance Assess.

56 Moving Beyond ITV: Dynamic Distribution Flow Control Carrier Mgrs Worldwide Transport Asset Status Network Mgrs Transport Network Condition Inventory Mgrs Flow Control Processors Worldwide Stock Posture Visibility: - Assets -Capacity Thresholds -Performance Assess. Options: - Courses of Action -Feasibility Estimates Feedback Mechanisms

57 Five Elements of Dynamic Flow Control 1. Near real-time stock posture data 2. Near real-time transport asset status data 3. Near real-time transportation network condition data 4. Powerful analytic capabilities –Threshold capability monitors – Supply chain performance monitors – Near-optimal alternative generators – Course of action feasibility estimators 5. Timely ability to affect or control operation

58 For More Information u Papers by Mike Wolfe –Trends in Freight Identification Technology –Freight Transportation Security and Productivity* –Technology to Enhance Freight Transportation Security and Productivity* u www.itsa.org. –Jump to CVO and Intermodal Application pages –Links to other sites *www.ops.fhwa.dot.gov/freight/transportation_security.htm

59 Thank you for your attention Mike Wolfe

60 Backup Slides: -Capabilities That Produce Benefits -Benefit Matrices by Type of User

61 Capabilities that Produce Benefits 1. Read an RFID tag--or other device –recording an implicit transaction 2. Carry detailed data on a read/write tag 3. Record sensor input data on the r/w tag –such as temperature, load/empty,door open 4. Mobile location determination 5. Long range communication

62 Confirm the Passing of a Tag: The Simplest Application RFID Tags & Other AIT Readers Capture Event Data On Board User Sites Enterprise Systems Capability #1 Read a Tag Delivers Accurate & Timely Data!

63 Adding Detailed Shipment Data: The DoD Application Active Data-Rich RFID Readers Capture Event Data On Board User Sites Enterprise Systems Capability #2 Carry Data Details Available When Needed Shipment Specific Data

64 Collecting Data During Shipment: Adding Richness and Value Active Data-Rich Tags Sensor & Device DataGPS Location Data Readers Capture Event Data On Board User Sites Enterprise Systems Capability #3 Temp, Doors, More Capability #4 Record Lat/Long Data Sensor & Device Data Capability #3 Temp, Doors, More

65 Capturing the Data That was Collected During Shipment Active Data-Rich Tags GPS Location Data Sensors & Devices Audit Trails for Users On Board User Sites Event Data from Readers Store on Board, Download at Destination A Classic Analytic Tool

66 Long Range Communication: Access Anywhere, Any Time Optional Active Data-Rich Tags Location Data Sensors & Devices On Board Event Data from Readers User Sites Wide Area Communication Capability #5 Long Range Comms. Optional Active Data-Rich Tags Event Data from Readers

67 Long Range Communications Enables Real-Time Response GPS or GLS Location Data Sensors & Devices On Board Wide Area Communication Proactive User Sites Event-Driven Commo & Real-Time Response Audit Trails for Users Analytic

68 Applying the Model to Different Types of Industry –Shippers »Manufacturers, distributors, retailers –Transportation carriers »Container operators, air freight, railroads, truckers –Transportation-based service providers include »Refuse haulers, cement delivery, package delivery

69 Dimension 3: The Type or Class of User

70 Benefit Matrix for Typical Shippers

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77 Benefit Matrix for Typical Transportation Carriers Gray Shading Shows Differences with Shippers

78 Benefit Matrix for Typical Trans.-based Service Providers Gray Shading Shows Differences with Transportation Carriers


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