SEE GREEN TO AVOID THE RED.

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1 SEE GREEN TO AVOID THE RED. DATA INSIGHT THROUGHOUT THE SUPPLY CHAIN FUELS REVENUE, EFFICIENCIES, AND A GREENER FUTURE. By Abdul Abdullah

2 OVER THE LAST 50 YEARS, INTERNATIONAL TRADE IN MANUFACTURED GOODS HAS GROWN 100-FOLD. 1 People are centralizing in urban areas like never before, yet the goods they consume are sourced, produced, and delivered to them through a seemingly ever-expanding global supply chain. But one thing has remained consistent. The cargo planes, railcars, containerships, and trucks that transport these goods share one unifying factor: Revenue is dependent upon frequency, reliability, and wise use of resources. That is why new, even minor, gains in efficiencies can noticeably impact the bottom line. TAKE MACHINE-TO -MACHINE (M2M) TECHNOLOGY, FOR EXAMPLE: The ability to transmit data straight from the pallet to headquarters is already changing business models, making transportation companies more nimble and aware. Companies can crunch this data in near real time and quickly adapt to disruptions in distribution channels. Now the transportation industry is looking to connect advanced technologies and the data they generate. WITH THIS INSIGHT, TRANSPORTATION COMPANIES CAN: 1 Realize new organizational efficiencies. 2 Further streamline operations. DATA TRACKING Offset volatile fuel costs. 3 Reduce environmental impact. 4 The goal is to share this data between customers and partners to enable predictive modeling and actionable business intelligence on a global scale. 2

3 A WEALTH OF GLOBAL DATA TODAY, PRODUCTION SPREADS WELL BEYOND A SINGLE FACTORY. Supply chains have a global footprint, extending over long distances as raw materials, partially completed goods, and finished products travel a complex path that includes multiple carriers and modes of transport from point of origin to point of use. TO DATE, SUCCESSFUL TRANSPORTATION COMPANIES HAVE ADDRESSED THIS CHALLENGE FOR END-TO-END COVERAGE ACROSS THE SUPPLY CHAIN BY PIECING TOGETHER MULTIMODE, MULTICARRIER SOLUTIONS THROUGH partnerships, third-party logistics, and freightforwarding companies. The biggest players have expanded their operations by acquiring local companies to extend shipping reach across all modes of transportation. These approaches were effective at achieving economies of scale. However, shifting consumer demands for more personalized products and a re-emergence of local sourcing and manufacturing have proven to be challenging for this model. One of the biggest challenges is the inability to effectively share data collected from various touch points and between carriers throughout the supply chain. 3

4 AS A RESULT, TRANSPORTATION EXECUTIVES ARE STRIVING TO CREATE A MORE UNIFIED DELIVERY ECOSYSTEM, IN WHICH DATA AND INFORMATION ARE SEAMLESSLY EXCHANGED ACROSS THE ENTIRE SUPPLY CHAIN. To meet evolving business needs, this ecosystem must enable connected global operations, so goods can move fluidly. It must also be flexible enough to support customers that deliver specialized I-need-it-tomorrow services. This vision will be powered by intelligent systems leveraging configurable mobility, M2M, cloud, and advanced communications platforms built upon secure global networks. These platforms work together to do more than just identify where every box is; they are smart enough to analyze operational, partner, and customer data in near real time, and then automatically select the most efficient next step in the supply chain. Actionable information that s intermodal and intercarrier will transform trade flows through increased visibility and data-driven insights across a global delivery ecosystem promising to impact world transportation as profoundly as containerized cargo did 50-plus years ago. SMART PLATFORMS THAT ANALYZE: Operational Data Partner Data Customer Data ASSET TRACKING MINIMAL VISIBILITY PARTIAL OR EMPTY LOADS NOW M2M produces mountains of data, enabling increases in efficiency and productivity, but the data often is not connected in the way it needs to be. Take asset tracking, for example: While the data collected, such as the availability of empty trucks in the vicinity of unscheduled pickups, is highly valuable to an individual carrier, it is not always accessible to other parties freight forwarders. ASSET TRACKING DATA CONNECTED ANALYTICS BUSINESS INTELLIGENCE PROFITABLE FULL LOADS TOMORROW Smart companies will begin to bring together disparate data sources, connecting data holistically across the delivery ecosystem for mutual benefit. Asset tracking will potentially include freight-forwarding data from multiple input streams, creating synergies that can turn less-than-truckload freight or deadhead hauls into profitable full loads. 4

5 SPEEDING INSIGHT ACROSS GEOGRAPHIES Gaining this level of insight into all aspects of global operations will require transportation companies to evolve current technologies to not only capture data, but turn that data into a high-value asset and source of competitive advantage. applications will mine and analyze the mountains of raw data collected, transforming this information into actionable intelligence that moves beyond tracking activity to predicting trends and informing proactive decision making. Companies that have already implemented or plan to implement M2M and mobility solutions, like remote monitoring and control, fleet management, asset tracking, and telematics, will now use the cloud to deploy those solutions. Cloud environments will make it possible to collect and share near real-time data across operations and partner ecosystems. In addition, cloud-based data analytics MOUNTAINS OF RAW DATA ALREADY-ADVANCED TECHNOLOGIES WILL EVOLVE FURTHER AND BECOME PREDICTIVE, MAKING IT POSSIBLE TO RETHINK DAY-TO-DAY OPERATIONS: 1 Telematics will expand vehicle safety and emergency warning systems. Targets in close proximity will generate alerts, based upon predictive modeling, helping to prevent accidents that damage cargo and slow timelines. 2 Sensors placed inside pallets and containers of consumable goods will detect problems, such as rising temperatures, while there is still time to respond. So vehicles with rapidly expiring goods can be rerouted to alternate destinations before spoilage consumes profits. 3 GPS tracking, delivered via M2M communications, will do more tomorrow than simply pinpoint assets on a map. That information will build geographic awareness that will help avert hold-ups due to unforeseen events like political unrest or severe weather conditions. This is the ignition point for momentous change. Technology providers like Verizon can now provide transportation companies with the ability to collect, aggregate, and integrate raw data from disparate sources. Through mining and analysis, this information produces insights that can be shared across the industry for real-time advantages. 5

6 DESTINATION: GREEN In the future, better data mining and predictive analytics could improve the bottomline for transportation companies. And cleaner, greener technology initiatives may also result. Going green will help companies realize efficiencies across operations, reduce energy, and lighten environmental impact. GREENER OVER TIME LESS IDLE TIME WILL SAVE HUNDREDS OF GALLONS OF FUEL PER TRUCK, YEAR OVER YEAR. FILLING DEADHEAD LOADS WILL OPTIMIZE FUEL CONSUMPTION AND HUMAN RESOURCES. PAPERLESS BILLS OF LADING AND LOGS WILL REDUCE WASTE AND EXPEDITE BILLING, BY INITIATING INVOICES AT THE POINT OF DELIVERY. FOR EXAMPLE: SAVINGS PER YEAR IN FUEL COSTS PER TRUCK, IDLING SIX TO EIGHT HOURS A DAY FOR 250 DAYS OF THE YEAR 2 YEAR 3 YEAR 2 Drivers will do time sheets from the road, saving paper, but also improving the reliability and timeliness of data by using electronic forms. Dispatch will monitor driving behaviors, such as speeding or excessive braking, which reduce fuel efficiency. At the same time, driving hours will be tracked automatically, which will aid in compliance with regional hours-of-service regulations. YEAR 1 OPTIMIZE FUEL CONSUMPTION WITH LESS IDLE TIME. EACH EFFICIENCY LEADS TO ANOTHER, GRADUALLY BUILDING TO FUTURE GAINS FOR TRANSPORTATION COMPANIES AND FOR CUSTOMERS, THE INDUSTRY, AND, ULTIMATELY, THE GLOBAL COMMUNITY. 6

7 OPPORTUNITY KNOCKS FOR TRANSPORTATION COMPANIES, NOW IS THE TIME TO PARTNER WITH TECHNOLOGY PROVIDERS capable of delivering industry-specific solutions securely and reliably across converged M2M, mobility, and cloud platforms on a global scale. This will enable transporters to extend their reach, create visibility, and accelerate the collection and analysis of data across their entire delivery ecosystem, allowing the industry as a whole to shift from reactive to predictive models. REVENUE EFFICIENCY ENVIRONMENTAL IMPACT THE RESULT: BUSINESSES READY TO MAKE THE TRANSITION CAN BENEFIT FROM ENHANCED REVENUE OPPORTUNITIES, INCREASED EFFICIENCY, AND GREENER OPERATIONS. THINK FORWARD. To access additional content, provocative analysis, and collective insight from the minds of forward thinkers, explore our thought leadership site. VERIZON.COM/ENTERPRISE/THOUGHTLEADERSHIP ABOUT THE AUTHOR As the Director of Transportation Vertical Solutions for Verizon, Abdul Abdullah specializes in developing industry solutions that meet tomorrow s needs. 1 IBM, The Case for Smarter Transportation 2 U.S. EPA SmartWay Technology Program 2012 Verizon. All Rights Reserved. The Verizon name and all other names, logos, and slogans identifying Verizon s products and services are trademarks and service marks or registered trademarks and service marks of Verizon Trademark Services LLC or its affiliates in the United States and/or other countries. All other trademarks and service marks are the property of their respective owners. ES /12 7

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