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Bruce Kraselsky

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Logistics are such a hard thing to manage and the better the information the better the results. M2M has the ability to impact logistics in a manner that has not been seen since railed and shipping …

Logistics are such a hard thing to manage and the better the information the better the results. M2M has the ability to impact logistics in a manner that has not been seen since railed and shipping standardized containers. What does the future hold for logistics management and how can M2M be used to make just-in-time services even better?

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  • 1. M2M Solutions For Logistics / Transport 5 October 2010 Bruce Kraselsky President & CEO Telepath Systems, Inc.
  • 2. Salient Facts • 40% - 70% of electrical energy is lost to inefficiencies in the grid. • In one small business district in Los Angeles alone, cars burned 47,000 gallons of gas just looking for parking. • Our healthcare system can’t link from diagnosis to drug discovery, providers, insurers, employers and patients. • In a world where 820 million people are undernourished, $48B of food is thrown away each year in the US. • Consumer products and retail industries lose about $40B annually due to inefficient supply chains. Source: IBM
  • 3. Logistics / Supply Chain Simple Definition: – the planning, implementation, & control of the flow and storage of goods, services, & related information – from point of origin to point of use or consumption – in order to meet customer requirements
  • 4. In Fact, The Supply Chain Is Highly Complex US Logistics In 2009 Cost Over 7.7% Of GDP, Or $1.1 Trillion
  • 5. Transport Accounts For About 25% Of Logistics Cost
  • 6. Trucking Is By Far The Largest Mode Of Transport Air: Ship: 0.2% of Freight 7.4% of Freight 2.3% of 1.0% of Revenues Revenues Rail: Pipeline: 13.7% of Freight 8.9% of Freight 5.6% of 3.7% of Revenues Revenues Truck: 69.8% of Freight 87.3% of Revenues
  • 7. US Industry Loses Tens of Billions From Logistics / Supply Chain Inefficiencies • Significant % Of Loss Is During Transport: – Inefficient Shipping Methods – Travel Delays – Breakdowns of machines and vehicles – Product loss from spoilage, theft, misplacement, etc. – Other
  • 8. Significant Portion Of Loss Is During Transport Losses Due To Theft: Losses Due To Spoilage: % Of Losses: Air: 4% Truck: 86% Rail: 5% Ship: 1% International Cargo Security Counsel 2005
  • 9. M2M Efficiencies And Cost Savings – Enables sharing of real-time information between suppliers, manufacturers, distributors as well as the ultimate customer – Provides real-time tracking of components and finished goods, as well as visibility into key performance indicators throughout the supply chain – Costs are reduced and inventories optimized through better coordination of supply strategies, ordering, manufacturing runs, deliveries and other business critical processes. – Improves ability to prevent loss through spoilage, theft, misplacement – Enables better regulatory compliance; avoidance of fines
  • 10. Example: Cold Chain The cold chain is an integrated system of partners and activities involved in processing, transporting and storing temperature sensitive products from the supplier to the consumer. •Produce •Baked goods •Meat •Floral •Seafood •Cosmetics •Dairy •Pharmaceuticals
  • 11. Enormous Losses From Cold Chain Lapses • $48B in annual waste from perishable goods in the US alone • Total value of temperature related perishable shrink per supermarket in the US is $80K / year • Across a 500 store chain: $40M / year
  • 12. The Challenge • To protect the refrigerated trailers and their high-value contents, effective fleet management is critical. • Fleet managers must understand each trailer’s location and its compliance with temperature control objectives. • Unfortunately, current methods for managing trailers are often expensive, inefficient, time-consuming and ineffective.
  • 13. M2M Reefer Solution Install remote terminal monitoring unit(s) on each refrigerated trailer: • Temperature sensors and others • GPS tracking capability • Cellular and / or satellite radio • Power source and backups Web-based applications for timely management of critical info. for each reefer: • Location, Status, and Temperature • History Logs • Alert Notifications if any problems occur • Ability to remotely configure critical controls on reefer
  • 14. Example: Cargo Theft • Average value of single cargo theft: $500K • A kilo of heroin is worth approximately the same as a kilo of Pentium chips; organized crime is going after chips and other valuable cargos because the penalties of getting caught are much less severe. • The FBI has stated that cargo theft is so widespread, it constitutes a serious threat to the flow of commerce in the USA • New York, New Jersey, Southern California, Atlanta and Miami are three regions where 75% of the nation’s cargo theft occurs. • When the freight is moving, no problem; when it stops, the problems start.
  • 15. Example: Transportation Security
  • 16. M2M As A Partial Solution Install remote terminal monitoring unit(s): • Sensors, controllers, alarms • GPS tracking capability • Cellular and / or satellite radio • Power source and backups Web-based applications: • Ignition detection • Intrusion alerts (doors, windows, engine) • Remote door and window locks • Immobilizer • Panic Button • Automatic Alarms • Covert video capability
  • 17. M2M Value Chain / Complexity Selecting the right combination of applications, equipment and communications networks for an optimum M2M solution can be a daunting task
  • 18. Some Challenges Selecting The Best Solution • Not “plug and play” with • Diverse assets require existing enterprise systems different solutions • No “out of the box” mobile • Application fit to bandwith terminated wireless availability solution • Large capital outlays • Coverage issues • Implementation assistance • Communications neutral expensive or non-existent strategy (cellular, • Retail pricing often radio,satellite, etc.) very prohibitive complex to implement • Many small players; stability • May require separate an issue connections and contracts • Technology will continue to for SMS, GSM, Satellite, etc. change
  • 19. Discussion • According to Berg Insights, “2010 will again be a very challenging year for the industry, as the overall economy has not recovered completely yet. • Decision makers are still more likely to delay projects and require even shorter payback periods on capital investments. • Some companies may simply not have the organisational or financial resources needed for successful implementation of a fleet management solution and a number of existing FM users will be forced out of business. • Fortunately for the industry, there will however be an even stronger focus on cost efficiency and the com- panies that fare best in the hard times are likely going to be those that master advanced technology. • Despite the current economy, the number of fleet management systems in active use is expected to grow at a compound annual growth rate of 21.7 percent from 1.5 million units at the end of 2009 to 4.0 million by 2014.”