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ABSTRACT NUMBER 020-0776
A PLATFORM TO SHARE INFORMATION AND GAIN VISIBILITY OF
TRANSPORTATION PROCESSES IN COLOMBIA´S SUPPLY CHAIN
Julian Lasso* Center for Latin-American Logistics Innovation (CLI)
Avenida el Dorado # 70-16, Bogotá, Colombia Tel: +571 4254727, Fax: +571 4274723
E-mail: [email protected]
Camilo Soto Center for Latin-American Logistics Innovation (CLI)
Avenida el Dorado # 70-16, Bogotá, Colombia Tel: +571 4254727, Fax: +571 4274723
E-mail: [email protected]
POMS 22nd Annual Conference Reno, Nevada, U.S.A.
April 29 to May 2, 2011
Abstract
In Colombia, freight companies do not have complete and integrated traceability of the
vehicles during the transportation and distribution processes. This situation is mainly
generated by the existence of a large number of information providers, dearth use of
ICTs (Information and Communication Technologies), and lack of cooperation between
the parties to share data that support the decision processes.
This paper presents a collaborative platform that integrates the information of the
transportation and distribution processes of the supply chain, formalizing the
communication channel between parties and generating opportunities to reduce costs.
This platform is based on three technologies: RFID, GPS/GPRS and cellular
communication. The benefits are measured through several operational indicators such
as waiting times and load/unload times. A case study of a Colombian third party
logistics is provided to illustrate the methodology.
Keywords: Supply chain, Collaborative platform, RFID, GPS, GPRS, and ICT.
*Corresponding author.
1. INTRODUCTION
Freight is fundamental in logistics management since any supply chain requires moving
raw materials from extraction sources to production plants, semi-finished products
among factories and carrying finished goods to points of sale and final consumers
(Ghiani et al. 2004). Freight process must ensure that the exact amounts of the required
products are delivered to the right receiver at the right time, place and conditions, and at
the lowest cost (Ballou 2004). If not, there might be costly consequences such as lost
sales, customer dissatisfaction or inactivity in the production process (Lambert 1998).
Freight process is relevant because it contributes the most to the logistics costs (about
two thirds of the total logistics costs incurred by a company). Moreover, it has a
meaningful impact on the customer service level; therefore, it plays a key role in
logistics management (Tseng 2004).
Road freight is the most widespread transportation mode in Colombia (Ministerio de
transporte 2008). The Latin American Integration Association (ALADI 2008) has
concluded that the availability of information about the location and tracking of cargo
units and vehicles are some of the main shortcomings of the freight service in Colombia
and Latin America.
These tracking and localization operations are called traceability, where there are two
possibilities:
• Tracing: It consists of following the movement of a specific product unit or a
production batch along the supply chain and within each company until it arrives
to the final point of sale / service.
• Tracking: It consists of identifying the particular origin of a unit or products’
batch placed anywhere in the supply chain, according to saved records “upward”
of it.
The lack of timely information about traceability yields lack of operations’ control,
uncertainty, low customer service levels, and lack of collaboration among the actors
involved. This situation does not allow observing the operation progress in real time; in
consequence, decision-making aimed at reducing costs and time in loading,
transportation and unloading is hindered. (ALADI 2008)
The ICTs (information and communication technologies) are tools that facilitate
collecting, accessing, processing, and analyzing information. They allow users to
monitor, plan and make decisions more accurately and quickly. Also they contribute to
integrate companies with the remaining actors of their value chain (Katz 2009;
Gunasekaran and Ngai 2004; Kumar 2001; Swafford et al. 2008).
One of the main contributions of these technological solutions is the increase of supply
chain visibility levels, particularly with mobile ICTs, because they facilitate the capture
and transmission of information with a high level of detail (Gauckler et al. 2008;
Coronado et al. 2009). Transportation and distribution of consumer goods have been
part of this technological development and have obtained several benefits. For example,
ICTs implemented in this area since the mid-80s, led to the so-called intelligent
transportation systems (ITS). The technology of these systems includes advanced
electronics, telecommunications and computing, in order to make more efficient and
safer transportation operations (Qu et al. 2010; Menéndez 2008).
The most known ICTs applications in freight process are the Global Positioning System
(GPS), Geographic Information Systems (GIS), RFID-based traceability systems (Radio
Frequency Identification Devices), and mobile applications based on GSM (Global
System for Mobile communications) and GPRS (General Packet Radio Service)
(ALADI 2008; Gauckler et al. 2008).
This paper describes a collaborative technological platform developed by the Center for
Latin-American Logistics Innovation (CLI) supported by GS1 Colombia and the
National Apprenticeship Service (SENA). By means of the integration of several ICTs,
this platform improves and formalizes the communication channels among the parties,
increases collaboration among the transportation actors, and provides accurate and
relevant information in real-time about the freight process.
The rest of this paper is structured as follows: the second section describes the
methodology; the third section presents a case study of the activity of road freight in
Colombia; and finally the conclusions and future work are presented.
2. METHODOLOGY
The methodology used to develop this research project is presented below:
Figure 1. Methodology
2.1. Identify the information flow in road freight processes
The overall transportation process is evaluated by observing a model of logistic
processes such as distribution and transportation within one or several companies. This
analysis includes the following activities: to recognize the freight process actors
5. Define technical specifications of the platform and software design
4. Propose an information flow using ICTs identified before
3. Search and identifiyi ICTs that might improve the information flow in freight processes
2. Analyze the information flow and identifying its weaknesses and opportunities
1. Identify the information flow in road freight processes
(Customers, 3PL and Couriers) and to identify the relationships, communication
channels and information flow among them.
2.2. Analyze the information flow and identify its weaknesses and opportunities
A detailed analysis of every activity carried out by each actor within the information
flow is performed after gathering all the information about the freight process. This
analysis includes the identification of: 1) communication channels, 2) media used, 3) no
automated processes, and 4) weaknesses and improvement opportunities within the
process.
2.3.Identify the technologies that contribute to improve the flow of information.
Technologies used nowadays in the transport field are described in this stage; then, it is
defined how each technology supports, integrates or mitigates deficiencies identified in
previous steps of the methodology.
2.4.Propose an information flow using ICTs
According to the initial freight process and its weaknesses, an operation model
integrated with ICTs was designed in order to align the product flow (which is
transported) with the information flow by means of a standard solution.
2.5.Prepare platform specifications and software design
Software specifications and use cases were designed to program a platform that
establishes a better communication channel and flow within transportation processes.
3. CASE OF STUDY
The application of the methodology counts with the support of the Colombian third
party logistic services provider “Almagrán y Almacenar”. This company has logistics
operations in all the principal cities around Colombia and from now on it will be call
“AyA”.
For the evaluation of the transportation process, it was necessary to observe the
operation of more than thirty clients or load generators. They were selected and
classified for being representative in the massive and semi- massive freight mode inside
AyA operation. In addition, gathering information on transport operations with each of
the selected customers was carried out under model interviews with transport leaders
appointed by AyA in major cities in the country.
3.1.Identify the information flow in freight processes
When gathering information about distribution, freight processes in AyA, the following
stakeholders were identified:
• Load Generator or Customer
• 3PL (Third Party logistics), which is characterized by it does not have its own fleet
and should outsource a freight load company.
• Freight companies.
• Truck Drivers.
Figure 2 shows the interaction between these stake holders during the freight process.
Figure 2. Stakeholders in the freight process.
The operations of the freight process were characterized in the following flow of
information:
Figure 3. Freight Process
The transportation process starts when the customer (load generator) defines a
transportation service request and communicates it to 3PL. This requirement is usually
done by sending an Excel file or an email indicating origin, destination (s), dates and
hours of load and unloads process, etc.
AyA transport staff, responsible for the operation, receives the customer requirement by
mail or by voice. According to the specifications; they consolidate the requirements
estimating the type and quantity of trucks required to provide the service. Once this
activity is made, staff request trucks to the freight company who search available trucks
to supply the customer´s request. Upon confirming the availability of freight trucks
suitable to fulfill the requirement, the transport company sends the information of the
truck (plate, name of the driver, ID, etc.) to AyA. Freight Company informs to each
driver about the loading point and some other relevant information to carry the
corresponding goods.
Drivers are directed to the place indicated by the client to collect the goods, trying to
meet the agreed date for the loading or delivery. During the service activity, the driver
registers manually the starting and finishing hours of the loading, unloading and transit
processes. During the trip, drivers receive phone calls from the freight company security
staff to provide the status of the freight. Often, all this information is useful for reactive
control of the operation. However, the information does not reach the customer (load
generator).
3.2.Analyze the flow of information, identification its weaknesses and opportunities
for improvement.
With the characteristics of the previous flow of information in the freight process
between stakeholders, the following weaknesses or opportunities for improvement
were indentified:
• High levels of informality in the communication between stakeholders, high
use of mail and cell phone.
• Much of the process is characterized by the reiterative manual input of data
and absence of systems to register the information.
• Due to the high level of handwork, it was observed an intensive operational
labor in the staff that controls and manages the transportation processes in
the 3pl and freight company.
• Freight companies do not own a cargo fleet, and lose time searching for
available trucks. They do not have a system or database to really know
which vehicles are available to provide the service.
• Monitoring of the transport operation is completely manual and depends
mostly on the drivers and freight company disposition to share information
about the progress of the operation. Usually, this leads to fragmentation and
customer unsatisfaction.
• Transportation key performance indicators are fragmented, subjective and
generated by manual procedures.
• Collaborative relation among stakeholders is in initial phase and there is a
high level of distrust.
After discuss different issues or points sensitive to improvement, the main
problem was determined: “lack of timely and reliable information between
stakeholders, as well as absolute informality and incomplete information.” Then
the following objective was established: “ensure that stakeholders involved in
the freight have timely and reliable information on this operation”.
3.3.Identify the technologies that contribute to improve the flow of information.
After analyzing problem, it was identified and concluded that the most viable
alternative was the use of technologies that allow automating or improving the
capture, transmission and consolidation of relevant information in the transport
process and providing operation stakeholders access to it.
Among the identified technologies, it was selected those which could contribute to
achieving the objective and to address the weaknesses found in the transport
operation. Three technologies were chosen: RFID (Radio Frequency Identification),
Global positioning Technology, SMS (Short Message services) by cell phone. Their
potential use on this project is described below:
• RFID (Radio Frequency Identification): this technology will be used to identify
the entering or leaving of the trucks in some distribution centers in AyA. All the
trucks will be equipped with Windshield RFID Tags and readers will be
installed in the entrances.
• GPS/GPRS: This technology, traditional in transport applications, will provide
traceability during the transit process. Additionally, geofences – Virtual
perimeter defined on a geographical area in a GIS (Geographical Information
System) - can be used to identify in an automatic way the trucks arriving to their
destination.
• SMS: This method will guarantee an interaction through codified messages to
get the online status of the cargo provides directly from the drivers. This
method was chosen because more than 90% of truck drivers use GSM devices.
In conclusion, the solution proposed requires designing and developing a Web
platform that integrates technology and allows the consolidation and transport
information processing to share information and gain visibility to all the
stakeholders involved in the freight process. This way, stakeholders can access by
web to the information collected, gaining online visibility of the process and
controlling their own or their business partners performance key indicators.
Almagran - Almacenar Distribution Center
COLLABORATIVE TECHNOLOGICAL PLATFORM
Destination
RFID (in / out vehicle registration)
GPS/GPRS
Tracking and tracing
Mobile telephony (delivery confirmation and novelties report)
RFID Tag
Transportation Service request
Vehicles information
Figure 4. Technological model
3.4.Propose the flow of information for the transportation process.
Proposed transportation process, under the development of the technological and web
platform, follows next flow of information shown in Figure 5:
Figure 5. Proposed flow of information
The web based platform developed to fit the model allows stakeholders to generate
reports and send notifications automatically, establishing a reliable communication
channel.
The platform allows clients to enter an online transportation request. This transportation
request is received by the 3pl, who determines the type and number of vehicles needed
for the operation. With this information the platform generates a request to the freight
company.
The freight company selects one of their vehicles indicated as available by the platform.
Then the driver confirms his availability through coded text messages to the freight
Company while the platform automatically confirms its availability to the 3pl and to the
client.
All the stakeholders (Freight Company, 3PL and client) could observed in real time in
the platform the start and end of the main activities that constitute the freight process
(loading, transit and unloading; and the standbys before each of them). These time
records are sent to the platform either by the truck driver by means of coded SMS or by
GPS/GPRS and RFID automatic reports. In consequence a complete overview of the
operation could be achieved. This unified information can be consulted online by
anyone involved in the process and thus evaluate any of the performance indicators
obtained in the reports.
3.5.Define platform specifications and software design
The collaborative platform shown in Figure 5 was developed using the following user
profiles:
• Super-Administrator Profile: This profile has the responsibility for managing the
relationships between companies. It allows creating companies, making
relationships, editing locations and assigning reports in the database. This profile
will be exclusively developed for GS1 Colombia, neutral and non-profit foundation
company who will generate value-added services for the transport sector.
• Load Generator (customer profile): it was designed for the use of the load generator.
This module allows the creation with standardized fields of transportation requests
by web or loading Excel files. Moreover, the module allows the allocation of the
transportation request to a business partner 3pl (in this case AyA). Once the service
request is generated, the platform will send a notification to the 3pl profile. When
the service request is made, the customer can view the service progress.
• 3PL Profile: Using this profile the platform will provide information about the
services requested by the customer. It will allow to the 3pl the analysis and
assignment of the trucks required to provide the service without modifying or re-
typing the information added by the customer in the first step. Furthermore, the 3pl
user can send notifications to the assigned freight company, check the service
progress or generate reports.
• Freight company profile: this profile will allow to the freight company, responds to
every service requested. Moreover, the freight company could manage their fleet
and visualize automatically the available trucks with the appropriate conditions
required to provide the service. In this profile, technologies will support the
information about the progress of the service. The information provided by RFID
will be used to generate automatically an in/out report with the flow of vehicles
inside some distribution centers. The GPS information will be used to report the
location of vehicles at the client´s facilities using GEOFENCES. GPS also will help
to track the trucks during operations. The coded SMS text messages allow drivers to
report the delivery and any other event during the operation.
Also all the stakeholders have an administer profile to edit their own information
ADMINISTRATOR PROFILE
Administer
Create
Locations
Trucks and drivers
Users
Reports allocation to users
Transportation service request
Enter a service request
Process the request
Request by auction
Change the request status if necessary
Report generation
Time structure
On-time delivery
Transportation data sheet
Drivers performance
Finished or canceled transportation service
requests
Tracking and tracing of trucks
CUSTOMER
3PL
FREIGHT COMPANY
File upload
Check process status
USER PROFILE
Figure 6. Collaborative Platform profiles
With the development of this collaborative platform, it is possible to get some
benefits for each stakeholder, the transport sector and for the logistic
development in Colombia. Some of the benefits mentioned could be:
• Allows Freight service providers to improve the customer service level.
• All stakeholders could know the status of the freight process on real time
• Stakeholders could have detailed reports about the freight process,
knowing durations per activity (loading, transportation, unloading).This
will allow them to make decisions that aimed at reduce costs and times.
• Encourage and incentivize the actors of the transportation network to
collect and share information on behalf of the supply chain.
4. CONCLUSIONS
• Literature review presented in this paper reinforces the need of having information
and communication technologies as support tools on freight process in Colombian
and Latin- American (LATAM) supply chain. Diverse references cited in this
document, argue the opportunity that Colombian and Latam supply chain could
have to increase or improve relationships, through visibility and traceability.
• Technological systems are relevant because they integrate operations which were
previously fragmented along the supply chain, and allow the exchange and
consolidation of meaningful information. By this mean, they facilitate: 1) the overall
management of the operation, 2) the identification of problem areas, 3) the decision-
making process, and 4) the undertaking of joint actions among actors involved in the
operation aimed at make it more efficient.
• Development of this technological platform neither includes processes of route
planning nor assessment of cost structures. This is because other transport
management solutions that area already in the market address these problems. The
designed tool aims to propose an alternative to get full visibility of the freight
process.
5. FUTURE WORK
Field tests of the platform and a pilot deployment in Almagran y Almacenar´s
operation. Furthermore, qualitative and quantitative benefits, and lessons learned
will be included in a future publication.
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