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Michael Wolfe
1.212, Introduction to ITS, Lecture 11
Massachusetts Institute of Technology
March 17, 2003
CVO & Intermodal Freight:CVO & Intermodal Freight:
ITS Benefits for BusinessITS Benefits for Business
Courtesy of Michael Wolfe. Used with permission.
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Making Sense at the Intersection ofMaking Sense at the Intersection of
Supply Chain Systems
Freight Operations
Tracking & Monitoring Technologies
Business Economics
Security
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Objectives and OutlineObjectives and Outline
Put CVO in context Major challenge of Intransit Visibility Key technologies Business benefits for freight operations Intermodal freight security Technology trend that will change best practices Looking ahead to Dynamic Flow Control
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Putting CVO in ContextPutting CVO in Context
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The Big Picture on CVO & FreightThe Big Picture on CVO & Freight
CVO Technologies
Supply Chain Integration
Intermodal Freight
Efficiency & Effectiveness
Enhance
Enables
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Evolution of CVOEvolution of CVO
Traditional ITSA approach– Emphasis on public-private interfaces
» Electronic credentialing» Regional automated oversize/overweight permitting
Transitional IFTWG approach– Emphasis on intermodal freight
» Enhance fleet operations» Improve customer service
Emerging CWG approach– Emphasis on security balanced with efficiency
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Supply Chain IntegrationSupply Chain Integration
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”
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The Really Big PictureThe Really Big Picture
CVO Technologies
Supply Chain
Integration
Intermodal Freight
Efficiency & Effectiveness
Enhance
Enables
Deregulation set the stage to exploit IT
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CVO Also Feeds Intransit VisibilityCVO 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
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The ITV ChallengeThe ITV Challenge
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ITV is a Long-term ChallengeITV is a Long-term Challenge
Laments and complaints– Operators: “Where’s my equipment?”– Customers: “Where’s my stuff?”
Nested freight relationships hinder data quality– Every shipment is a chain of transactions
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Nested Freight RelationshipsConveyance
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.)
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Modern Stack Train LoaderModern Stack Train Loader
(Courtesy of Michael Wolfe.)
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Clifford MaerskClifford Maersk6600 TEU, 24.5 Knots, 19996600 TEU, 24.5 Knots, 1999
(Courtesy of Michael Wolfe.)
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Loading Chassis for Drayage and LinehaulLoading Chassis for Drayage and Linehaul
(Courtesy of Michael Wolfe.)
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The Dromedary DraymanThe Dromedary Drayman
(Courtesy of Michael Wolfe.)
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Focus on Automatic Identification Focus on Automatic Identification Technologies (AIT)Technologies (AIT)
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CVO-Related TechnologiesCVO-Related Technologies
AIT– Source data automation
Data exchange– EDI and Internet
Data integration
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Automated Identification TechnologiesAutomated 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
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The Macro Trend in Freight ID is The Macro Trend in Freight ID is Towards Automatic SurveillanceTowards Automatic Surveillance
RFID tag readers, 1995
Location tracking, 1988
Two-way digital comm., 1988
Cell phones, >1985
Pay phones, ~1930’s
Telegraphs, >1844
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Auto ID TechnologiesConveyance•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.)
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“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 TodayBest Practices in Freight ID Today
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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 NicheBest Practices by Niche
Retail and resupply
Railroads, few container operators
Long-haul truckers
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Approaches to Location TrackingApproaches to Location Tracking
Choke point or signpost reports– Fixed readers– Short range communications– Tag must pass close to a reader
Mobile reporting– Long-range communications– Location identification– Can include 2 way digital communications
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Tagging vs. TrackingConveyance•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.)
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Benefits of Real-Time Location Benefits of Real-Time Location Tracking and Status ReportingTracking and Status Reporting
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Approaches to Location TrackingApproaches to Location Tracking
Choke point or signpost reports– Fixed readers– Short range communications– Tag must pass close to a reader
Mobile reporting– Long-range communications– Location identification– Can include 2 way digital communications
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Uses of Real -Time Location TrackingUses of Real -Time Location Tracking
Role Play: – You’re the chief planner in a major
transportation company– The CEO has to give a speech about real-time
location tracking Your job is to outline the key benefits
– Notes
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Value of Real -Time Location TrackingValue of Real -Time Location Tracking
1. Efficiency and productivity
2. Service quality
3. Shipment and service integrity
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1. Efficiency and Productivity1. Efficiency and Productivity
Reduce errors, wasted effort, and re-work– Save process and cycle time– Save labor hours
Optimize assignment of equipment and people– Improve quality of life for operators
Optimize across functional areas– Operations, maintenance, labor relations
Reduce slack capacity and inventory
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2. Service Quality2. Service Quality
Improve reliability– Better schedule adherence
Increase operational flexibility– Advance warning of disruptions – More ability to respond to priority changes– Ability to divert shipments en route
Improve user and customer confidence
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3. Shipment and Service Integrity3. Shipment and Service Integrity
Better cargo security Less theft of services Mitigate some losses in progress Enhance safety Reduce insurance premiums
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More Excerpts from the More Excerpts from the AIT Business Benefits ModelAIT Business Benefits Model
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AIT Capabilities, Benefits, and UsersAIT Capabilities, Benefits, and Users
AIT capabilities, properly implemented, yield business benefits
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?
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AIT Capabilities, Benefits, and UsersAIT Capabilities, Benefits, and Users
The North River AIT
Business Benefit Model™
includes all three dimensions
Types of Users
Capabilities
Benefits
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Dimension 1:Dimension 1:
Five Capabilities Produce BenefitsFive 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
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Dimension 2:Dimension 2:
Three Types of Business BenefitsThree Types of Business Benefits
1. Efficiency and productivity
2. Service quality
3. Shipment and service integrity
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The North River AIT Business Benefit Matrix The North River AIT Business Benefit Matrix ™™
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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AIT Benefits Vary by User AIT Benefits Vary by User
AIT benefits are not uniform across types of industries, nor within industries
There are typical patterns within industries, especially within segments– Sophisticated vs. less sophisticated firms
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Applying the Model to Different Applying the Model to Different Types of IndustryTypes 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
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Dimension 3:Dimension 3:The Type or Class of UserThe Type or Class of User
TRANSPORTATION-BASED SERVICE PROVIDERS
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD
LOCATION
DATA
5. LONG RANGE
COMMS.
TRANSPORTATION CARRIERS
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD
LOCATION
DATA
5. LONG RANGE
COMMS.
SHIPPERS
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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Intermodal Freight and SecurityIntermodal Freight and Security
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Three Views of Supply Chain SecurityThree Views of Supply Chain Security
Containerization magnifies security risks Security measures threaten efficiency Supply chain tools can improve security
while improving efficiency
Technology can support both goals
when well conceived and well executed!
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Requirements for Supply Chain Security Requirements for Supply Chain Security
Assured integrity of conveyance loading and documentation
Significantly reduced risk of tampering in transit
Accurate, complete, and timely information about shipments
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Improve Visibility and ControlImprove Visibility and Control
This is the most common recommendation to improve both security and productivity
There are major institutional and technical challenges
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Visibility Discussion is ConfusingVisibility Discussion is Confusing
Visibility of what? – Visibility of items and assets
By what means?– Event-driven data and integrated systems
In what timeframes? – Timeliness keyed to needs
From what sources?– Data from shippers, carriers, and third parties
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Technology Developments That Will Technology Developments That Will Change Best Business PracticesChange Best Business Practices
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What Will Change the Business Model What Will Change the Business Model for Supply Chain Management?for Supply Chain Management?
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
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Key Developments to WatchKey Developments to Watch
Cheaper real-time ID and tracking Auto-networking tags Multi-mode readers “Productizing” of system integration Effective hybridization
Cheaper real-time ID and tracking
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CheaperCheaper Real-Time Tracking Real-Time Tracking
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
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Cost Trend in Cost Trend in Real-time Transportation MonitoringReal-time Transportation Monitoring
-Qualcomm truck system, ~$2500
-Vantage trailer tracking, ~$700
-SkyBitz location monitor, ~$400
-E-911 cell phones, ?
These are illustrative examplesCosts are negotiable--volume is a big factorMonthly communication costs are also importantThe capabilities are very different
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If Supply Chains are to be. . .If Supply Chains are to be. . .
Speedy
Nimble
Precise
Secure
...then cheaper real-time tracking and monitoring will play an increasingly important and--
eventually--ubiquitous role
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Looking Ahead to Looking Ahead to Dynamic Flow ControlDynamic Flow Control
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Looking AheadLooking Ahead
Exploiting multiple technologies for Dynamic Flow Control– ITS/CVO– Supply Chain Integration
ITV is necessary but not sufficient
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Moving Beyond ITVMoving Beyond ITV
Carrier Mgrs Worldwide
Transport Asset Status
Inventory Mgrs
Flow Control
Processors
Worldwide Stock
PostureVisibility: -Assets -Capacity Thresholds -Performance Assess.
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Moving Beyond ITV:Moving Beyond ITV:Dynamic Distribution Flow ControlDynamic Distribution Flow Control
Carrier Mgrs Worldwide
Transport Asset Status
Network Mgrs
Transport Network
Condition
Inventory Mgrs
Flow Control
Processors
Worldwide Stock
PostureVisibility: -Assets -Capacity Thresholds -Performance Assess.
Options: -Courses of Action -Feasibility Estimates
Feedback Mechanisms
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Five Elements of Dynamic Flow Five Elements of Dynamic Flow ControlControl
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
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For More InformationFor More Information
Papers by Mike Wolfe– “Trends in Freight Identification Technology”
– “Freight Transportation Security and Productivity”*
– “Technology to Enhance Freight Transportation Security and Productivity”*
www.itsa.org. – Jump to CVO and Intermodal Application pages– Links to other sites
*www.ops.fhwa.dot.gov/freight/transportation_security.htm
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Thank you for your attention
Mike Wolfe
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Backup Slides:Backup Slides:--Capabilities That Produce BenefitsCapabilities That Produce Benefits--Benefit Matrices by Type of UserBenefit Matrices by Type of User
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Capabilities that Produce BenefitsCapabilities 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
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Confirm the Passing of a Tag: Confirm the Passing of a Tag: The Simplest ApplicationThe Simplest Application
RFID Tags & Other AIT
Readers Capture
Event Data
On Board
User Sites
Enterprise Systems
Capability #1Read a Tag
Delivers Accurate &
Timely Data!
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Adding Detailed Shipment Data:Adding Detailed Shipment Data:The DoD ApplicationThe DoD Application
Active Data-Rich RFID
Readers Capture
Event Data
On Board
User Sites
Enterprise Systems
Capability #2Carry Data
Details Available When Needed
Shipment Specific Data
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Collecting Data During Shipment:Collecting Data During Shipment:Adding Richness and ValueAdding Richness and Value
Active Data-Rich Tags
Sensor & Device Data
GPS Location Data
Readers Capture
Event Data
On Board
User Sites
Enterprise Systems
Capability #3Temp, Doors, More
Capability #4Record Lat/Long Data
Sensor & Device Data Capability #3Temp, Doors, More
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Capturing the DataCapturing the DataThat was Collected During ShipmentThat was Collected During Shipment
Active Data-Rich Tags
GPS Location Data
Sensors & Devices
Audit Trails for Users
On Board
User SitesEvent Data
from Readers
Store on Board, Download at Destination
A Classic Analytic Tool
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Long Range Communication:Long Range Communication:Access Anywhere, Any TimeAccess Anywhere, Any Time
Optional Active Data-Rich Tags
Location Data
Sensors & DevicesOn Board
Event Data from
Readers
User Sites
Wide Area Communication
Capability #5Long Range Comms.
Optional Active Data-Rich Tags
Event Data from
Readers
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Long Range CommunicationsLong Range CommunicationsEnables Real-Time ResponseEnables Real-Time Response
GPS or GLS Location Data
Sensors & DevicesOn Board
Wide Area Communication
Proactive
User Sites
Event-Driven Commo & Real-Time Response
Audit Trails for Users
Analytic
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Applying the Model to Different Applying the Model to Different Types of IndustryTypes 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
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Dimension 3:Dimension 3:The Type or Class of UserThe Type or Class of User
TRANSPORTATION-BASED SERVICE PROVIDERS
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD
LOCATION
DATA
5. LONG RANGE
COMMS.
TRANSPORTATION CARRIERS
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD
LOCATION
DATA
5. LONG RANGE
COMMS.
SHIPPERS
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
3. ADD SENSOR
DATA
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
Only inspecializedapplications
Only inspecializedapplications
Only inspecializedapplications
3. ADD SENSOR
DATA
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
Only inspecializedapplications
Only inspecializedapplications
Only inspecializedapplications
3. ADD SENSOR
DATA
No Only inspecializedapplications
Major source ofbenefits
4. ADD MOBILE
LOCATION
DATA
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
Only inspecializedapplications
Only inspecializedapplications
Only inspecializedapplications
3. ADD SENSOR
DATA
No Only inspecializedapplications
Major source ofbenefits
4. ADD MOBILE
LOCATION
DATA
Yes, whencombined with #3to develop audit
trails for diversion,damage, spoilage
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
Only inspecializedapplications
Only inspecializedapplications
Only inspecializedapplications
3. ADD SENSOR
DATA
No Only inspecializedapplications
Major source ofbenefits
4. ADD MOBILE
LOCATION
DATA
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #3to develop audit
trails for diversion,damage, spoilage
5. LONG RANGE
COMMS.
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Benefit Matrix for Typical ShippersBenefit Matrix for Typical ShippersEFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
Only inspecializedapplications
Only inspecializedapplications
Only inspecializedapplications
3. ADD SENSOR
DATA
No Only inspecializedapplications
Major source ofbenefits
4. ADD MOBILE
LOCATION
DATA
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #3to develop audit
trails for diversion,damage, spoilage
5. LONG RANGE
COMMS.High payoff in
integratedsystems
High payoff inintegratedsystems
Can enable real-time response
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EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Yes, in closedloop systems
Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
Not for carrier’soperations
Not for carrier’soperations
Not for carrier’soperations
3. ADD SENSOR
DATA
Yes, formechanical
sensors
Yes, from earlywarning of mech.
failures
Major source ofbenefits
4. ADD MOBILE
LOCATION
DATA
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #3to develop audit
trails for diversion,damage, spoilage
5. LONG RANGE
COMMS.High payoff in
integratedsystems
High payoff inintegratedsystems
Can enable real-time response
Benefit Matrix for Typical Transportation CarriersBenefit Matrix for Typical Transportation CarriersGray Shading Shows Differences with ShippersGray Shading Shows Differences with Shippers
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Benefit Matrix for Typical Trans.-based Service ProvidersBenefit Matrix for Typical Trans.-based Service Providers Gray Shading Shows Differences with Transportation CarriersGray Shading Shows Differences with Transportation Carriers
EFFICIENCY SERVICE
QUALITY
SHIPMENT
INTEGRITY
1. READ TAG Someapplications
Modestimprovement
Modestimprovement
2. CARRY
DETAIL DATA
No No No
3. ADD SENSOR
DATA
Yes Unlikely, givenlimited vehicleservice areas
Major source ofbenefits
4. ADD MOBILE
LOCATION
DATA
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #5
and the data isfed to optimization
programs
Yes, whencombined with #3to develop audit
trails for diversion,damage, spoilage
5. LONG RANGE
COMMS.High payoff in
integratedsystems
High payoff inintegratedsystems
Can enable real-time response