Waberer’s Logistics LLC, as the market leader in domestic logistical services is devoted to continuous research, development and innovation. When implemented, these results can offer a wider range of services for customers as well as further improve the quality of services. This article is the summary of such a research project.
   In the year 2010 Waberer’s Logistics successfully fulfilled 500.000 orders delivering top quality service. Regarding the variety of the orders, one third was performed by the FTL (full truck load) division, while the shipments belonging to the other two-thirds were delivered to the end user through the distribution system (collection-distribution). The fulfillment of such a volume of orders requires not only a well-prepared and efficient operational system from a company, but top-level IT support as well. An adequate IT system is especially essential when during the phase of execution the already high volume of orders needs to be divided into sub-tasks according to planning and execution in the company’s distribution system.  Since the sub-tasks function as units of planning and execution, it is safe to state that the distributional division planned and executed approximately 1,000.000 units in the year 2010. This clearly shows a need for information on each order in the process of collection-distribution. Due to the special nature of the supply chain, each element in the chain builds on the one preceding it; therefore, in case of any disturbance the elements will follow the domino effect, thereby creating a disturbance all along the rest of the chain. Regarding execution of the order it makes no difference whether the disturbance occurred during loading due to a forwarding error, or in the central depot because it was loaded into the wrong storage space; but in terms of the exceptional arrangements that need to be made, the exact information about where the error occurred, why it occurred and other details regarding the circumstances have proven to be crucial.

 
Illustration: Delivery of shipment and registering the execution of the order

The distribution system’s information needs can only be served by a well-developed, widespread and reliably available system. The company focused initially on the network’s connection points, whereby it developed tracking for the order and completion of sub-tasks. As a result the overall precision, efficiency and cost-effectiveness of all delivery orders could be increased by reducing the number of shipments arriving to the wrong connection point. We also learned, that most of such disturbances do not occur in the connection points of the network themselves as much as on the edges, in other words in the channels. This is when Waberer’s decided to launch a research-development project. The aim of this project was to discover the most efficient load tracking solutions for the company and to prepare the most appropriate such solution within the framework of a pilot program.

The underlying theory of the new T&T (track&trace) system (illustration 2):

(1)    According to the volume specs of the order the vehicle of appropriate capacity (from utility trucks to the tractor-trailer) arrives at the given point.
(2)    (2-3) The driver checks in with the person in charge and begins to unload (or load, depending on the order).
(3)    (4) Once the load/unload has been completed the driver uses a hand held device (such as a PDA, a palm pilot or a smart phone or regular cell phone) to record the successful transaction.
(4)    (5) This information then immediately appears in the company’s operational system, or it can appear as a new function on the Waberer’s customer service website Waberer’s Logistics Online, where the company the order originated is then also able to track the completion of their order.

Since multiple systems are able to serve the tracking system on illustration 2,  in the first steps of the research – apart from the base functions – we included in the specifications all the additional functions as well as all the expectations we had regarding the system. The base functions the researched systems were to fulfill are: the second the arrival of the shipment has been verified, this information should appear in the company’s operational system, whereas in case of a delivery error the group handling the delivery accounting should have an adequate and timely overview of the daily work of any given truck returning to the depot. Expectations regarding the T&T system:

A, a complex environment for implementation; the chosen system should be able to handle fleets owned by the company, franchised fleets as well as fleets used on an as-needed basis
  
B, Industrial use: the tool selected should be sturdy and appropriate for internal as well as external use

C, Flexible solution for further development: It is important to find a solution that not only serves today’s and tomorrow’s needs, but is open to further development for future challenges.

D, User-friendly operation: since the system will not be used by IT professionals it is essential that the operation is easy and straight-forward, and that it should only require minimal extra work from the drivers

E, Minimal investment: simply regarding the initial costs of the terminals (a volume of a few hundred pieces needed) one of the key factors of the project might be the type of terminals selected. In addition, further costs arise from the improvement of the company’s operational system and application.

F, Minimal operational costs: regarding costs another crucial expectation is that the operational costs should be as low as possible in order for the advantages gained by using the system to exceed the costs of operating it.

G, Simple support: A system that is wide spread in its everyday use must operate virtually error free with reliable availability, since especially the support of the terminals would prove difficult over large distances.

H, Application of the system: It must be proven with the help of a pilot program that the system selected is easy to use. Otherwise, if the application of the system can’t be implemented all the money and time invested into developing the system will go to waste.

The abovementioned expectations may seem contradictory, since for example the cost of an industrial terminal (PDA) could be many times over that of a cell phone, but, regarding its functionality, the system that can be created via cell phones will only perform according to the basic expectations, which means the system will not lend itself to further development and will not be flexible and open enough for additional new functions.

The company is striving to achieve the following advantages with the introduction of the new track-and-trace system:

•    Better control over the fleet
•    More precise information on execution
•    Decrease of phone communication
•    More efficient dispatcher service
•    More efficient accounting
•    Competitive edge on the market
•    Value-added services
•    Evolutionary improvement in planning
•    The exact measurement of waiting and loading times

Four potential options were considered during the research project. These were the following:

A.    Execution report via text messaging
B.    Reporting through a telephone center
C.    Functional expansion of the track-and-trace system currently in use
D.    Application of a mobile terminal (such as PDA, smart phone etc.)

During the research phase both version A and version B had been rejected. In both solutions similar advantages were to be expected, such as: there is no need for equipment for each truck since every driver already owns a mobile phone, and both solutions would have been available to independent contractors working on an as-needed basis. However, these pro-arguments were balanced by a number of cons, such as: neither of these systems is user friendly, their application is time consuming and above 10-15 orders it is not manageable because reporting back after each run requires too much time, and it is likely that in the case of these systems the information about execution would definitely be omitted. And then we haven’t mentioned the biggest drawback of these systems, namely that neither one can be developed or expanded further, while both have to be developed almost completely, before even implementing the pilot program, which means before they have been tested live, indicating a significant risk factor. Regarding development costs version A would have required modest financial support, while version B would have meant an average expense.

Version C seemed a lot more favorable according to the research, since the baseline in this version starts out with each vehicle (especially the ones owned by the company or in a franchise system) having a tracking system already built in, so it would be worth developing that system further. With a touch screen instrument attached to each cockpit the driver could send a report with the appropriate information after each execution.  A further advantage of this solution is that data transmission would only occur via a SIM card (which would not get significant traffic due to the T&T), since the tracking system also communicates with the server via the GSM system. Further advantages: industrial solution, with timeless design and user-friendly application. One drawback to be mentioned is that the instrument is permanently built into the vehicle, so it would not be available for use for temporary contractors; and it wouldn’t work for taking photos of damaged goods for the purpose of documentation either. In terms of cost it would be a mid-range investment regarding development, but the new hardware would need to be installed into each vehicle as an addition to the already existing track-and-trace system used, since the display units must will be needed.

Illustration: Tracking device in use 

According to the result of the research the most effective solution is option D, the application of mobile terminals. Therefore, this technology has been further analyzed and divided into 2 parts: industrial portable computer devices (PDA) and smart phones. Regarding functionality and development the two versions are comparable, both can be developed and expanded further, flexible application, ability to read bar codes. The major difference seems to be in the cost of the device, while smart phones – due to mass production – are already available for about 40.000-60.000 Forints, the cost of a PDA runs in the hundred thousand Forint range, but this also means industrial design, which currently is only true for one type of smart phone. A further advantage of the smart phone option is that there is already an application available, which lends itself to testing during the pilot program.  We must also mention, that currently the most dynamically spreading smart phone is the android system, which is an open coded system, thereby making it easy to develop and expand. These devices are also very well equipped, all including features such as Bluetooth, GPS, 3-5 Megapixel camera with auto-focus, Wi-Fi, large touch screen as well as a good processor and strong battery capacity. Using the smart phone requires a more complex IT approach than the first two versions as well. The question of development with this solution occurs not only in connection with the server and the Enterprise Resource Planning (ERP) system, but a third component is also needed which would run on the terminals locally. Two-way data connection is required between the ERP system and the local terminals, since the terminals send in the forms that have been filled in, while the server can send out new orders.  

 Following the completion of the research study the management of the company decided to test the smart phones as potential mobile terminals in the pilot program live. Two options were considered:

•    One step testing: the aim of the pilot program is not only to test the application of this solution, but also to choose the most appropriate smart phone. During testing the drivers would receive various kinds of smart phones, with the same application on each one. The drivers would receive a different phone each week during the 1-2 months of the testing phase. At the conclusion of the pilot program the drivers would rate not only the application as a means of reporting on execution, but would evaluate the smart phones as well.

•     Two-step testing: during the first step the final choice for the device to be used would be made in a strategic decision from a pool of smart phones. The decision would be based on the testing of a limited number of users. Then in the second phase the devices would be handed to  the drivers working in 15-20 different service segments of our workforce for testing over a period of 1-2 months. At the end of the pilot program the solution would be evaluated by the truck drivers and operational managers based on various criteria.
According to the company’s future plans the two technologies would be used parallel for load tracking, so that in each case the most advantages would be available with each applied technology. These are the track-and-trace system in case of company owned and franchised vehicles, as well as the application of smart phones in case of temporary contractors working on an as-needed basis and the vehicles that are part of the distribution division. Waberer’s Logistics has significantly enlarged its fleet over the last month, which further underlines the validity of this decision. All other developments regarding the tracking system can be found on the company’s website: www.wabererslogisztika.hu
 
 

László Antal – project manager / WABERER’S LOGISZTIKA KFT.