THE DEVELOPMENT OF TELEMATICS FOR SMALL AND MEDIUM SIZED TRUCKING ENTERPRISES (KANTELE) SUMMARY

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1 THE DEVELOPMENT OF TELEMATICS FOR SMALL AND MEDIUM SIZED TRUCKING ENTERPRISES (KANTELE) Juha Laakso, Senior Research Scientist Tampere University of Technology Finland Harri Rauhamäki, Senior Research Scientist Tampere University of Technology Finland SUMMARY The research project was established to promote the development and utilization of information technology in small and medium sized Finnish trucking enterprises and it is a result of co-operation between public and private parties. The fundamental reason for the project is the fact that SMEs do not have the possibilities to take advantage of the modern information technologies like the bigger companies. The project has produced functional specifications of telematic applications suitable especially for trucking SMEs. Useful information about the operations models and educational needs of trucking SMEs has also been gathered. The results have been distributed via internet for free. BACKGROUND The combination of pricing and the operational quality of transport services are the most significant factors that affect customer satisfaction. The new demands, which are starting to appear with the current customer satisfaction factors, are related to information technology, environmental issues and quality of co-operation. According to the Finnish logistics study (1), the companies operating in trade and indusrty view the following areas as the most important in developing productivity by the means of logistics until the year 2001: 1. making acquisitions more efficient 2. the development and introduction of logistics information systems 3. the integration of information systems into the operations Three most important areas for developing productivity until the year 2001 in the logistics service companies are: 1. the integration of operations with the customers 2. the development and introduction of logistics information systems 3. the integration of information systems into the operations The up-to-date sending of official regulations, guidelines, statistics and other data needed in the ordering and delivery processes between companies in electric form is one of the recent objectives. Transport entrepreneurs have to send a lot of data about their activities to the authorities as different kinds of reports. Producing these data from the 1

2 transport companies databases and transfering them to the authorities will be made significantly easier by the use of suitable telematics systems. Transportation companies also have certain needs concerning the data that can be obtained from officials. Collecting of this data can be made easier for the companies by utilising suitable information technology. The average size of the Finnish trucking enterprises is small. Only one percent of the approximately companies has more than ten vehicles. Therefore it was considered important to promote the utilising and development of information technology in the small and medium sized Finnish trucking enterprises. 88 % 1 or 2 vehicles in company 1 % 2 % 9 % 3 to 5 vehicles in company 6 to 10 vehicles in company More than 10 vehicles in company Fig. 1. The size of the Finnish trucking companies. This project was established as one of the consequences of the study "Data processing and data transmission in lorry and delivery van transport in Finland ", which was carried out in 1997 and presented in the 5 th ITS World Congress in Seoul, Korea in The study was extensive, with 8500 enterprises of the professional lorry and delivery van transport sector as a target group. The study showed very clearly that the small trucking companies do not have possibilities to take advantage of the information technologies like the bigger companies. The main reasons for this are the lack of resources and knowledge and inadequate proper educational background. (2) KANTELE project is a part of the Research and Development Programme on Transport Telematics Infrastructures in Finland (TETRA) which is co-ordinated by the Finnish Ministry of Transport and Telecommunications. More information about 2

3 TETRA and the nine main tasks within the programme can be found from WWW ( (3) PARTICIPANTS AND METHODS KANTELE project is financed by the Finnish Ministry of Transport and Telecommunications, the Finnish Technology Development Centre, the Finnish Trucking Association and a group of software companies and telecommunication operators. The research work is done by the Institute of Transport Engineering at Tampere University of Technology. The supervising board of the project has representatives from financing organisations, Tampere University of Technology and Technical Research Centre of Finland. There is also a representative of a trucking company in the supervising board which has turned out to be very useful arrangement. The most important aims of the project were to help the trucking SMEs (small and medium sized enterprises) to operate more effectively by the help of information technology make the exhange of information between trucking SMEs and the public authorities easier The questionnaire data collected during the 1997 study was used to select the trucking enterprises to take part on the feasibility study and the KANTELE project. Software and hardware companies and teleoperators are participating in the project, but the focus is strictly in user needs. The research and the development of the telematic applications are done in close cooperation with five small and medium-sized trucking enterprises. The smallest company has only one truck in action and the biggest one has 12 trucks. Main types of cargo in these companies are oil products roundwood foodstuff parcelled goods clothing The study is processed by taking several tasks of a trucking company under examination at a time. The project including the preparation of the specifications is performed in three phases: 1. Tasks concerning the management of operating costs and the actions in vehicle (completed in december 1998) 2. Tasks concerning order processing, pricing, invoicing, EDI and exchange of some information between enterprises and the public authorities (completed in june 1999) 3. Tasks related to planning and performing transportation actions utilising routing, mobile communication and vehicle positioning (to be completed in december 1999) 3

4 The phasing of the project and the contents of each phase are based on the feasibility study, which was completed in January The feasibility study was also done in cooperation with trucking SMEs. One of the main conclusions of the feasibility study was that the trucking SME s prefer rationalizing their financial administration and cost Requirements analysis and functional specifications Design Implementation and integration Taking into use and maintenance Fig. 2. A simplified representation of software engineering model of design. The tasks of KANTELE-project are dashed. monitoring by the help of IT before taking into use some more developed telematic systems like dispatching or fleet monitoring. In each phase the project produces IT related information of operational environment, models of action and training needs in trucking SMEs. The functional specifications are produced. These documents include the description of user needs and requirements and specifications of suitable applications. The specified applications are believed to have also a commercial future. Applications are specified applying the standard ANSI/IEEE The methods to produce functional specifications are commonly used in software companies and are therefore useful in impelementation phases. The research work is very open. All the main information about the project - including the records of meetings of the supervising board - have been published on the project's WWW-site. Functional spesifications and other results have been distributed via internet for free. The spesifications can therefore be exploited for example by any software company. This is believed to promote the development and implementation of these applications. 4

5 THE RESULTS There are several specific features in entrepreneurs in SME s and especially in trucking SME s. Therefore in order to succeed commercially, software products made for trucking SME s should be generic and flexible; applicable on different kind of trucking companies and types of goods user friendly; taking into account the level of knowhow of the users in office and in vehicle reasonably priced Also the advantages that can be achived by these products should be noticeable and justifiable. The first phase of the research consentrated on monitoring, recording and analysing the data and costs conserning the operations of the company. According to the user needs and wishes two telematic applications were developed. The main purpose of these applications was to ease the collection of cost related data of the company. Electronic vehicle log book is a system through which all the desired individual actions in vehicles can be monitored and stored. These actions are to be defined by the company and can include the recording of mileage, working hours, fuelling etc. The recorded data can be transmitted to the office of the company for example by wireless connection or by moving a diskette. In order to make the usage easy for a driver, as much of the recorded data as possible is gathered automatically, e.g. time, location and mileage. In this case usability is very important in order to gain the acceptance of the drivers and get correct data. Costs and operations monitoring application is specified as a relational database application. The data consists of company information (employees, trucks, trailers, types of actions to monitor etc.) and actions. Actions can be inputted manually or directly from other systems such as the eletronic vehicle log book. The application allows user to allocate all of the the cost (including fixed costs) for example to vehicles or periods of time. In this way certain comparisons can be made easily. Also the fuel consumption can be monitored. The applications specified are illustrated in fig. 3. It was considered very important by the entrepreneurs that the system should not try to make decisions, but give supporting information for the user. Also the decision, what data is to be gathered should be left to entrepreneur. Companies of different kind or size do certainly have different needs and levels of monitoring operations and costs. 5

6 ELECTRONIC VEHICLE LOG BOOK COSTS AND OPERATIONS MONITORING APPLICATION DRIVER S NOTES DRIVER S NOTES ACTIONS TRANSACTIONS IN VEHICLE IN VEHICLE COMPANY COMPANY INFORMATION INFORMATION ACTIONS TRANSACTIONS QUERIES UPDATES CALCULATIONS Fig. 3. Specified applications. The second phase of the research consentrated on order processing, pricing, invoicing, EDI and exchange of some information between enterprises and the public authorities. According to the user needs and wishes some features of the applications specified in the first phase were developed further to support pricing and invoicing and produce data for statistical means. The new features include gathering of information concerning goods and customers which makes it possible to allocate the costs, mileages and tonnages for example to customers or types of goods. The applications specified in this project also enable to produce information for statistical purposes. Statistics Finland has the responsibility for compiling statistics on the Transport of Goods by Heavy Goods Vehicles in Finland. The results of the statistical survey are published yearly and are based on a sample survey on the activity of heavy goods vehicles. The data is collected by postal queries and the trucking companies are under obligation of replying on the query. In the third phase of the project, attention is focused for example on wireless communication, route optimization, vehicle monitoring and some aspects on delivering information between trucking SME s and officials. As mentioned, the third phase will be completed at the end of

7 The third phase also includes a comparative study. The situation and the needs of the Finnish trucking SME s will be compared to the ones in Germany. The general information about the KANTELE project is published in a form of a report. The report includes information about the background, participants, aims and methods of the project. Also the observations made by the researchers and the argumentations for the decisions made are published in the report. The knowledge, for example, of the desired education conserning the information technology will be used by the national organisations and the public authorities. The functional specifications of these applications as well as the draft of the report are published in finnish on World Wide Web in pdf-format (Portable Document Format) at the end of each phase. Software companies and anybody else can freely use these documents. This is hoped to make the developing suitable tools for the trucking SME s easier and more profitable. In this way the results can be exploited immediately even though the project is unfinished. The final report will of course be published as traditional paper form in the end of the project. Implementation and marketing of the products is left to software companies. However, the Finnish Trucking Association is prepared to promote the products to some extent. REFERENCES 1. Logistics study of The Finnish Ministry of Transport and Communications, 16/ p. 2. Data processing and data transmission in lorry and delivery van transport in Finland today and needs for the future (the original report is in Finnish), Ministry of Transport and Communications, 24/ p. 3. TETRA - Research and Development Programme on Transport Telematics Infrastructures Programme description (in Finnish), Ministry of Transport and Communications, B 41/97. 7