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Crowdsourcing and collaborative warehousing and logistics werc presentation

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The FLEXE CEO, Karl Siebrecht, participated in a panel on crowdsourcing, collaborative warehousing & logistics at the WERC conference in Providence, Rhode Island last week. Check it out!

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Crowdsourcing and collaborative warehousing and logistics werc presentation

  1. 1. Crowdsourcing and Collaborative Warehousing & Logistics Jennifer Pazour Assistant Professor, Industrial & Systems Engineering, Rensselaer Polytechnic Institute Karl Siebrecht CEO, FLEXE, Inc Brett Spector Director, North America Channel Sales, Iron Mountain Brett Parker President & Co-Founder, Cargomatic
  2. 2. Bringing the Sharing Economy to Less than Truckload Shipping Case Study: Technology-enabled Collaborative Warehousing Session Agenda & Introductions Jennifer Pazour Karl Siebrecht Brett Parker President & Co-Founder, Cargomatic Brett Spector Crowdsourcing and Collaborative Warehousing and Logistics Questions and Answers Session Assistant Professor, Industrial & Systems Engineering CEO, FLEXE, Inc Director North America Channel Sales Iron Mountain
  3. 3. 3 The On-Demand Economy On-Demand Systems: Business model that matches supply resources to demand requests on demand. Crowdsourced Systems, Sharing Economy, Gig Economy, On-Demand Peer-to-Peer (P2P) Systems: When the demand requests are fulfilled by peers, the resources are owned by independent users. Crowdsourced Logistics Systems: A business model for the movement and storage of goods that matches independent supply resources (warehouse space, truck space, delivery services) to demand requests on demand.
  4. 4. Crowdsourced Logistics Systems 4 Last Mile Delivery (from * to customer) Short-Haul Delivery (B2B) Long-Haul (City-to-City) Delivery Movement of Goods: “Crowdshipping” Storage of Goods *Grocery Stores *restaurant take-out Individual Courier Services (from customer to *) *Retailers (malls) Shipping Containers (Country-to-Country) Emergency Response
  5. 5. (some) Characteristics of Crowdsourced Logistics Systems • Independent Freelance Users Control Supply Resources – Supply resources are not owned or employed by an organization. These independent freelance users have control over access to their resources. • Open Market or Open Crowd – Supply resources originate from a crowd of independent users, and membership to the crowd typically has low barrier to entry. • Online-to-Offline – Supply resources and demand requests are matched online using a computer application, often on a smart phone, but the logistics service is performed offline (physical transport or storage of goods). • Visibility Required – Utilizes technology platforms to provide visibility into untapped underused capacity, as well as a large reach for demand requests. This results in potential asset utilization increases. 5
  6. 6. Compare and Contrast Traditional Business Model Crowdsourced Logistics Systems 6 For example: For example: Incentives & Control Supply Resources Decision Making Network
  7. 7. Supply Resources (Assets) Traditional Business Model • A single company owns or contracts resources. • Results in a relatively fixed capacity. • Given demand variability, companies either have extra capacity, or have customers wait. Crowdsourced Logistics Systems • The P2P system owns no assets. • A crowd of independent freelancers provides access to their resources. • Leads to the ability to scale capacity up/down, dynamically adjusting capacity to meet demand. 7
  8. 8. • Supply resources are under the companies control and known. • Goal is to match unknown demand requests with resources. • A company can take a systematic perspective to the allocation of their resources. Incentives, Control, & Decision Making Traditional Business Model Crowdsourced Logistics Systems • Both suppliers of and demand for resources are users. • Both supply and demand are unknown and not in the company’s direct control. • Facilitates matching of decentralized entities. • Need incentives to attract both supply and demand; current incentives are flexibility 8
  9. 9. • Elastic Supply Chain Network • Many-to-Many Configuration – Infinite Participants – Infinite Transfer Points – Infinite Pickup/Delivery Locations • More complex operations (e.g., transactions, authentication) • Sharing results in the ability to be closer to the end customer • Potential for adaptable and resilent supply chains • Static Supply Chain Network • Few-to-Many Configuration – Finite Participants – Finite Transfer Points – Finite Entry Points • Operational protocols are entity-based • Security is based on authenticated entities (personell and facilities) • Can lead to rigid, expensive (e.g. last mile) supply chains Supply Chain Network Traditional Business Model Crowdsourced Logistics Systems 9
  10. 10. Incentives & Control Compare and Contrast the Logistics Systems → A single company owns or contracts resources.  Given a fixed capacity, demand variability results in either having extra capacity, or having customers wait.  Supply Resources are under the companies control and known.  Goal is to match unknown demand requests with resources.  Top-Down, centralized decision making via a single entity.  Systematic allocation of resources possible.  Static Supply Chain Network  Few-to-Many Configuration  Finite Participants/Transfer Points/Entry Points Simplifies Transactions  Can lead to rigid, hard to adapt, supply chains → The P2P system owns no assets, instead a crowd of independent freelancers provides access to their resources.  Ability to dynamically adjust capacity to meet demand.  Both suppliers of and demand for resources are users. Both supply and demand are unknown.  Need incentives to attract supply and demand. An incentive for supply in these systems is flexibility and control.  Decentralized Decision Making of Freelance Users (facilitation usually done systematically by a 3rd Party)  Elastic Supply Chain Network  Many-to-Many Configuration  More complex operations  Sharing results in the ability to be closer to the end customer  Potential for adaptable and resilent supply chains Traditional Business Model Crowdsourced Logistics Systems Supply Resources Decision Making Network 10
  11. 11. Case Study: Technology-enabled Collaborative Warehousing Brett Spector, Director, North America Channel Sales, Iron Mountain Karl Siebrecht, CEO, FLEXE, Inc
  12. 12. Unexpected returns, recalls, supply chain disruptions Competing with Amazon’s delivery promise Seasonal inventory swings or promotions How best to manage? Fundamental problem: warehouses are static, businesses are dynamic Fixed, long-term leases are mismatch for dynamic inventory & high or uncertain growth High fixed & committed costs Often too much or too little capacity Difficult and expensive to change plans Implications:
  13. 13. 75%REPORT SIGNIFICANT INVENTORY FLUCTUATIONS THROUGHOUT THE YEAR
  14. 14. 70%HAVE NO SOLUTION FOR OVER-CAPACITY AND ACCEPT IT AS SUNK COSTS
  15. 15. <10%EXPECT THE DRIVERS OF THESE FLUCTUATIONS TO DECREASE OVER TIME
  16. 16. How do we compete with this?
  17. 17. FLEXE: a connected network of “on-demand” warehouses • Reduces friction • Enables control • Drives efficiency Empty space coverage No cost / low risk Low commitment Easy Scalable On-demand network access No fixed costs Low commitment Easy Scalable Access to massive + flexible warehouse footprint creates elastic supply chain Buys space/services Goods Owner Need capacity Warehouse Operator Have capacity Lists space/services 2
  18. 18. Global Network, Local Services Driving Consistency of Information Management 36countries 5continents
  19. 19. Our Track Record: Trusted and Tested 20,000+ Employees 1,000+ Facilities 3,600+ Vehicles 6 Underground Facilities 5 Data Centers 67.8M ft² Real Estate 530M ft³ Hardcopy Records 89M Pieces of media 8.7M (8M SS) Trees Saved/Year 627M Images Scanned per year Resources Information Managed Stability #726 On the Fortune 1000 List 155,000 Customers $3.03 Billion 2014 Revenue S&P 500 Index 60+ Years in Business
  20. 20. Iron Mountain + FLEXE partnership benefits • New revenue stream • Leverage existing assets and capabilities • Technology makes it easy and scalable To Iron Mountain: • Large warehouse footprint • Great brand, reputation and capabilities • Strong strategic alignment To FLEXE:
  21. 21. Bringing the sharing economy to logistics Brett Parker, Co-founder and President Cargomatic, Inc. bparker@cargomatic.com
  22. 22. The Sharing Economy ”Unlocking underutilized capacity with technology” Founded: 2009 Valuation: $70 billion Founded: 2008 Valuation: $25 billion
  23. 23. Problem: Local trucking is highly fragmented • No transparency on price • No real-time visibility of capacity • Too much time finding trucks • Dead head miles • No way to market excess capacity • Lack of fleet visibility Shipper Challenges Trucker Challenges: 90% of truckers operate 6 trucks or less
  24. 24. Business Focus Infrastructure Unlocking Underutilized Capacity Regional / local trucking marketplace that provides freight capacity to B2B and B2C shippers in the logistics, manufacturing and distribution industries in the Continental US Mobile and desktop applications for Courier, LTL, FTL and Drayage shipments Over 1500 truckers and shippers using the platform in the last 6 months. “Bringing the sharing economy to logistics.” Business Solution: Use a technology platform to connect shippers with qualified truckers who have unutilized capacity in the most efficient manner.
  25. 25. 25 2 5
  26. 26. 26 Access to unutilized capacity Real-time visibility (track and trace) Dynamic Pricing Paperless payments Positive Environmental Impact Sharing Economy Benefits In Logistics
  27. 27. Conclusion  The sharing economy should be used for reliable and consistent capacity.  It will be backed by solid operations and complete transparency  It will also lead to lower pricing driven by market efficiencies  It is a great time to be a logistician!
  28. 28. Question and Answer Session Jennifer Pazour, Assistant Professor Industrial & Systems Engineering, RPI pazouj@rpi.edu Karl Siebrecht, CEO, FLEXE, Inc. karl@flexe.com Brett Parker, President & Co-Founder, Cargomatic bparker@cargomatic.com Brett Spector, Director, North America Channel Sales, Iron Mountain Brett.Spector@ironmountain.com

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