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MATC Fall Lecture Series: Tom Clements

MATC Fall Lecture Series: Tom Clements



MATC Fall 2012 Lecture Series

MATC Fall 2012 Lecture Series



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  • Werner Enterprises provides a comprehensive supply chain solution across all modes and geographies.We begin by performing extensive analysis on the current network and will design and implement a program to manage your shipping needs with excellent service and using optimal modes, routes and providers.

MATC Fall Lecture Series: Tom Clements MATC Fall Lecture Series: Tom Clements Presentation Transcript

  • Mid-America Transportation Center Fall Lecture Series Technology at Werner Tom Clements Clements@WernerVAS.com 1
  • COMPANY PROFILE Premium provider of transportation and logistics services, specializing in Truckload, Intermodal, LTL, Ocean and Air services. 2011 Revenue: $2 billion 2011 Net Income: $103 million NASDAQ: WERN Alliance Carriers: 8,500 Trucks: 7,300 Trailers: 23,165 2
  • RECOGNIZED LEADER 2012, 2011, 2010, 2009 3
  • COMPREHENSIVE SOLUTIONS Freight Management Freight Movement Global Implementation Technological Advantages Werner offers With a network of Providing door-to-door Our tools provide complete 3PL supply 7,300 trucks, 8,500 services for customers instant chain solutions across alliance carriers and companies of all sizes visibility across their all shipping modes ocean, air and rail and industries as they supply chain, which and geographies, from providers, we offer compete in today’s allows them to better network design unsurpassed delivery global marketplace is manage their through solutions worldwide. what sets us apart. business. implementation. 5
  • THE PATH OF WERNER PROGRESS 2003 2009 • Brokerage and • Safety improvement initiative Intermodal expansion • Australia launch 2007 1956 • LH fleet reduction • Founded 1998 by C.L. • Electronic driver Werner logs (EOBR) 1986 • IPO 2008 • Fuel MPG initiative • Balanced portfolio initiative 2006 • Werner Global Logistics formed • China launch 1980 1999 • Deregulation • Mexico launch • Canada designated fleet formed 1992 • GPS on all trucks • Dedicated, Regional and TC fleets formed 6
  • TECHNOLOGY AREAS Equipment / Fuel Regulation Systems BI / GIS / Analysis Werner leverages Werner has long been Trucking may be Our tools enable our many technological the leader in using simple, but Werners customers to leverage advances to improve technology to ensure complex systems our experience and equipment compliance and provide a competitive technological performance and safety within the advantage over investments to reduce diesel fuel federally regulated others in the industry. manage their consumption. trucking industry. transportation network. 7
  • ENVIRONMENTAL SUSTAINABILITY Fuel Efficiency Initiatives o Aerodynamic trucks & trailers o ArrowShield trailer skirt development o Speed management & driving behavior o Automated tire inflation systems o Computer controlled truck idling and paperless log system o Weight reduction strategies o LNG / CNG Engines o Continual in-depth testing of the latest fuel saving technologies 8
  • EQUIPMENT – ARROWSHIELD • Proprietary trailer skirting system • Internal development and testing more than 12 months • U.S. Environmental Protection Agency SmartWay® Transport Partnership verified • Overall highway efficiency gain of 4 to 5 percent 9
  • EQUIPMENT – WEIGHT REDUCTION Aggressively pursuing weight reduction in our tractors & trailers. Key items of focus: • Reducing wheel base length • Single wide based tires • Dead or non-drive rear axles on tractors • Smaller sleepers • Reducing fuel tank size • Aluminum wheels on trailers • Aluminum cross members on trailers • Horizontal exhaust system 10
  • BEHAVIOR – DRIVER TRAINING PROGRAMS Areas where driver behavior can impact fuel consumption: • Equipment maintenance • Minimizing out-of-route miles • Implementing proper driving habits: • Speed • Acceleration • Progressive shifting • Hard Break Monitoring • Eliminating unnecessary truck engine idling 11
  • EQUIPMENT – DRIVER COMFORT 100 percent of fleet is currently equipped with idle reducing technology. Diesel APU Espar Heater Electric APU 12
  • TIRE STRATEGIES • Single wide-based • Automatic tire inflation system • MPG savings • Tire consumption 13
  • EQUIPMENT INITIATIVES 5 6 9 12 13 11 2 10 7 15 8 3 1 14 16 8 1. Ultra Low Sulfur Diesel Fuel (ULSD) 9. Trailer boat tails 2. Lowered idle rpm 10. Automated tire inflation 3. Advanced lubricant 11. Aerodynamic tractor models 4. Automatic engine shut-offs 12. Stationary fifth wheel 5. Minimized tractor-trailer gap 13. Speed reduction 6. Lighter weight equipment 14. Trailer skirting 7. DEF 15. Wide based tires 8. Single drive axle 16. Under Tray System 14
  • WERNER ENTERPRISES’ IMPACTResults from fuel saving initiatives: • 20 consecutive quarters of YOY improvement to mpg • More than 50 million gallons saved from 2007 to YTD 2012 • More than 560,000 ton reduction in carbon footprint from 2007 to YTD 2012 15
  • FUEL MPG IMPROVEMENT Trucks 7,300 7,300 7.00 Mi / Truck 495 495 6.90 MPG 6.125 6.850 $/G 4.086 4.086 6.80 Mi/Day 3,613,500 3,613,500 6.70 G/Day 589,959 527,518 62,441 $/Day $ 255,134 6.60 6.50 6.40 6.40MPG 6.30 6.20 6.10 6.00 5.90 5.80 5.70 5.60 5.50 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 16
  • HOS AND EOBRThe FMCSA announced various changes HOS impact on Utilization decrease per tractor in the market shipperseffective February 2012, with a compliancedate of July 2013. Decreased driver wage potential Decreases capacity thus increases thePrimary rule change: 34 hour restarts will number of tractors needed to haul the same amount of goodsnow need to include two periods between1 a.m. and 5 a.m. Overall impact higher transportation costs In late 2011, the U.S. Court of Appeals for the Seventh Circuit overturned the FMCSA’s proposal that would require carriers that have a 10 percent or higher rate of noncompliance with HOS rules in any single compliance review to put EOBR technology in place to monitor HOS. 17
  • SAFETY PROCESSComputer Based Training (CBT) • Specific driver training (computer testing, pictures, video) • Courses cover all aspects of driving, including seasonal planning • Accessible from home or terminals • Will be accessible in trucks with new Qualcomm unitsSafety Improvement Training • Safety KPI scorecard • CSA monitors • Corporate training • Constant focus 18
  • PAPERLESS Paperless Orientation On-line applications When you re-apply we recall previous app info Data for all employment forms is collected before arrival During Orientation Electronic Signature Capture Image merge and driver approval Scott Andersen - Werner Enterprises Professional of the Year 2011 Nebraska Trucking Association September 2011 Saves ½ day of orientation for 300+/- driver hires per week. 19
  • DRIVER CONTACT Driver Portal • Self service help 24/7 • Increased access to information Text messages • Not while they are driving • Not while they are sleeping 20
  • LIGHTWEIGHT SOLUTIONS Drive cost out of the supply chain with a Werner Enterprises Project Initiative value differentiator • Increase your shipment weight capacity to more than 50,000, thus reducing your number of shipments • Reduce your carbon footprint without adding cost or complexity Multiple options for creative solutions 21
  • IT STAFFING OVERVIEW • Analysis & Information Systems (AIS) • 130 IT Staff • SMART Transportation Management System Java, Cold-Fusion, Informix • Document Imaging, Portals, Internal Apps .Net (C#), SQL Server • DBA’s, Analytics, GIS, BI DB2, SQL Server, .Net, • Help Desk, System Administrators, Analytics • Management Information Systems (MIS) • 30 IT Staff • IBM AS/400 • Controls Asset Functions 22
  • METHODOLOGYAIS uses the SCRUM methodology for Agile software development.• User-driven project requests• 30-day sprints (development cycles)• Prioritized backlog of to-do items• Trust users to know what they do for the business• Quick steps to perform complex tasks 23
  • DEVELOPMENT CYCLE Waterfall Method = Business Involvement = Usable Functionality Released Project Approve Approve Plan = Inspect / Adaptive Feedback Approval & Rank Requirements Identification` Functional Test Plan Sign Off Code, Unit Test, Document QA and Systems Test Deploy to Production Months Sprints Scrum Method Project Approve Approval & Rank Approve Plan Sign Off Approve Plan Sign Off Approve Plan Sign Off Approve Plan Sign Off Approve Plan Sign Off 24
  • INFRASTRUCTURE• Two on site data centers, one remote site Disaster recovery data center• Diesel generators and fuel• IBM DS8800 Storage• IBM Metro Global Mirror• Trends: • Redhat Linux use growing • Virtualization across several operating systems • 20-60 hosts per server• Direct data line to China• AVAYA VOIP Phones 25
  • EDI • 3 Million EDI transactions per month • Converting onto Sterling International • Historically batch processing was common • Now Java Message Service (JMS) Queues and Web Services make it real-time • High Availability • Off-site location running as a production instance • HQ data centers and offsite balance workload • E-mail EDI enables carriers without EDI to send EDI status updates via the web • Can be done on a smart phone 26
  • EVENT NOTIFICATION • Shipment booked • Booking confirmed • In gated full at origin/late gate • Shipment sailed/late sailing • Documents sent • Arrived port/late arrival • U.S. Customs cleared • U.S. Customs exam hold/release • U.S. OGA exam hold/release • Available at destination/late availability • Delivered/late delivery Transit Exception Notifications • Late gate • Late sailing • Late arrival • Late availability • Late delivery 27
  • OPTIMIZATION• Java backend ColdFusion user interface • Genetic Algorithms• More than 1,000 mileage calls per second • Chipper (continuous solution)• Production rate structure • Continuous Moves Solver• Driver scheduling • John Henry’s Hammer• Modified Vehicle Routing Problem (VRP) • Timeline 28
  • IMAGING Werner Enterprises Imaging System (WEIS) • Internally developed imaging system • 11 departments fully automated • 45,000 new images per day • Over 220 million images in DB2 • Retrieval time is less than 1 second • Average image size is 35K (200dpi Tiff G4 image) Savings • A single 4 drawer file cabinet = 50,000 pages • 4,400 paper file cabinets worth of images 29
  • MOBILE • Dedicated mobile development team • Internal iPad Executive KPI App • Werner News App (Coming Soon!) • Phone Gap • Responsive Design • Challenges with screen size, resolution, browsers… • Werner is not BYOD 30
  • BUSINESS INTELLIGENCE • Enterprise Data warehouse DB2 • SQL Server • SQL Server Reporting Services • SQL Server Analysis Services • Data Cubes • 10 years ago reporting was monthly in order to support a pat on the back, bonus, or need to improve. • 5 years ago weekly reports were the standard • Now reporting needs to be real time • Users also like self service • Visualization is also key to alerting users 31
  • GIS Team 4 Developers (2 US, 2 China) Software ESRI Server ESRI Desktop Used Google for a short trial Impact Geocode every shipment record Customer Maps & Analysis Road closure event response iMap 2.0 enterprise application 32
  • ALERTS & ACTIONS Real time alerts can be thrown for a variety of reasons: Truck not moving when we think it should Load may be delayed Truck Out-of-Route Truck breakdown Split location coordination Truck due for preventative maintenance Actions that could be preformed within the map: Message driver Assign load to truck Assign vendor to breakdown Message shipper and consignees 38
  • WHAT’S NEXTNew user interfaceKeyboard ShortcutsFurther integration withlegacy systemsUser ProfilesSearch HistorySaved map stateEmbedded documentation and training videos 39
  • DEDICATED SERVICES Analysis and Design Team • Supply Chain Analysis & Optimization • Optimization Performance Monitoring & Tuning • Continuous Process Improvement • On-Site Customer Analysis • Rapid Response • Special Events • Site Selection • GIS Maps Continuous Improvement • Backhaul Team • Trainer Teams • Slip Seats • Pod Drivers 3 Trucks : 4 Drivers 40
  • THE ROI IN SUPPLY CHAIN ENGINEERING • Transportation Staffing Overhead: 10-30% depending on factors relating to centralization and degree of current automation. • Mode Optimization: 3-6% • Load Optimization: 8-15% (LTL to multi-stop or pool consolidation) • Continuous Moves: 2-5% • Vendor/Supplier Compliance: 6-15 % (inbound management) 41
  • CASE STUDY DOLLAR GENERAL 2011 Annual Revenue = $125.5 million Length of relationship (Dedicated): 1994 - present Scope of Work ChallengesWerner Enterprises operates aDedicated fleet with 600 trucks Solutionsservicing 8 facilities. The fleet Surge demands of the small boxhandles inbound and outbound retailer and the cost pressure ofshipments. We deliver to more the recession.than 7,000 stores per week with99 percent on-time service. Werner Enterprises provides additional support for seasonal surges, ranging from 40 to 120Werner Enterprises’ TMS trucks on short notice - usually inmanages the shipment execution less than 24 hours.for Dollar General’s carrier base,including storing all customerdelivery data for Dollar General’s Werner designed and implementedentire network. Slip Seat and Trainer Team solutions, reducing Dollar General’s cost by more than $10 million annually. 42
  • CASE STUDY ANHEUSER-BUSCH 2010 Annual Revenue = $45 million Length of relationship (Dedicated): 2001 - presentScope of Work ChallengesWerner Enterprises operates aDedicated fleet of 150 trucks and Solutions36 person loading/spotting teamservicing the Columbus, Ohio Replace an underperforming, long- time incumbent at Anheuser- Werner Enterprises worked closelybrewery. with the equipment manufacturers Busch’s second largest brewery in conjunction with the design and and Anheuser-Busch to design a purchase of specialized equipment. lightweight tractor and trailer solution. Werner Enterprises seamlessly executed a three phase ramp-up encompassing the delivery of 150 new tractors and 500 new trailers. Continuous Improvement: We increased the backhaul contribution by more than 90 percent and improved driver productivity by more than 13 percent, resulting in more than $1 million in annual savings. 43
  • CASE STUDY OFFICE MAX 2011 Annual Revenue = $36.3 million Length of relationship (Dedicated): 2001 - presentScope of Work ChallengesDedicated provider in SolutionsOfficeMax’s three distributioncenters: Store delivery network had grown without review forHazelton, PA several years. As stores Reallocate store network toMcCalla, AL were opened they were current DC’sLas Vegas, NV assigned delivery days based Reduced 102,500 miles on personal preference or weekly neighbor stores. Estimated $185,000 weekly savings 44
  • Thank You Tom Clements Clements@WernerVAS.comFor more information visit: www.werner.comFollow us on Facebook and Twitter 45