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E-commerce and
freight transport
Chasing the last mile -
one byte at a time
Per Olof Arnäs, PhD
Chalmers University of Tec...
Demographic
and social
change
Shift in
economic
power
Rapid
urbanisation
Technological
breakthroughsClimate
change and
res...
Process
improvement
Service
developm
entInfrastructure
developm
ent
Customer
controls last
mile
Faster and
better
returns
...
Process
improvement
Service
developm
entInfrastructure
developm
ent
Customer
controls
last mile
Faster and
better
returns
...
Customer
controls
last mile
Faster
and better
returns
Better
delivery
experience
Secure
identification
on pickup/
delivery...
Customer
controls
last mile
Faster
and better
returns
Better
delivery
experience
Secure
identification
on pickup/
delivery...
RESOURCE UTILISATION
LOW
Source: Kent Lumsden
Safety imbalance
Variation in resource demand
Chain imbalance
Caused by the ...
RESOURCE UTILISATION
LOW
Source: Kent Lumsden
Safety imbalance
Variation in resource demand
Chain imbalance
Caused by the ...
January February March April May June July August September October November December
10%
Nov 25
When do we start generati...
January February March April May June July August September October November December
10%
Nov 25
2%
Dec 25
When do we star...
January February March April May June July August September October November December
10%
Nov 25
1%
Dec 29
2%
Dec 25
When ...
The transport
industry does not like
real-time decisions.
At all.
Batch-handling
Zip codes Zones
Time-tables
DSC_9073.jpg ...
Image: Alain Delorme, alaindelorme.com
The current
model is focused
on economy of
scale and
standardization
But the biggest problem in
transportation is time.
There is not enough of it.
Ever.
InSearchOfLostTimebybogenfreundonFlickr
The current paradigm
So…
What are we
doing about all
this?
Things are happening outside the
freight industry
(and have been for some time)
Things are happening outside the
freight industry
(and have been for some time)
Image: Richard Hancock, twitter.com/Canary...
Stage Coach Wheel by arbyreed on Flickr
Development of transportation
technology has been
fairly linear
…for the last 5500...
We are in the
middle of a
gigantic
exponential
development curve
beginning
A new global eco system
where new types of,
knowledge based,
industries compete with
traditional ones
http://jaysimons.dev...
Startups don’t compete with airlines...
by purchasing a bunch of planes
hiring a bunch of pilots
and locking up a bunch of...
Startups compete with airlines by
inventing videoconferencing.
Startups don’t compete with airlines...
by purchasing a bun...
355:365:2015BWH by hermitsmoores on Flickr (CC-BY,NC,SA)
Make analogue
information digital
Digitization:
MobileWorldCongress2016byKārlisDambrānsonFlickr(CC-BY)
Increased use of
digital technology
Digitalization:
MobileWorldCongress2016byKārlisDambrānsonFlickr(CC-BY)
Increased use of
digital technology
Digitalization:
Make analogue
i...
Ominous Windmill by Conrad Kuiper on Flickr (CC-BY,NC,SA)
Digit(al)ization
is not a trend
Ominous Windmill by Conrad Kuiper on Flickr (CC-BY,NC,SA)
Digit(al)ization
is not a trend
It is a force of
nature
Gartners Hype Cycle for Emerging Technologies
Augmenting
humans with
technology
Machines
replacing
humans
Humans and
machi...
Gartners Hype Cycle for Emerging Technologies
Source: Gartner July 2015
Could affect transportation and logistics
The Last Mile - the holy Grail of e-commerce
Integration of digital and physical worlds
http://www.sygic.com/gps-navigation/addon/head-up-display
Say hi to the new sensors
http://mobsentech.com
”New” modes of
transport
https://www.youtube.com/watch?v=50sv4M4rgBM
https://www.youtube.com/watch?v=HG76DcXySuw
More automation
The sharing economy hits freight transport
(again and again…)
Servitization
Move up in the
value chain
Upgrade drop points
Consumer services
Expose data
Mall of Scandinavia
http://www....
The Action of New York City by
Trey Ratcliff on Flickr (CC-BY,NC,SA)
Real-time (data driven)
decision making
Data collecti...
Real-time decision making
not always successful…
Another
thing to
keep tabs
on
Bitcoin, bitcoin coin, physical bitcoin, bitcoin photo by Antana on Flickr (CC-BY,SA)
Block chain
technology
Records trans...
https://news.bitcoin.com/nimber-disrupts-logistics-system-blockchain-matters/
http://www.economist.com/news/leaders/216771...
Big data in freight
transport
Film by Foursquare. Google: checkins foursquare
2011 2013 2015
”Big data is an all-
encompassing term for
any collection of data sets
so large and complex that
it becomes...
892 by benmschmidt on Flickr (C)19th century shipping visualized through the logs of Matthew Fontaine Maury (1806-1873), U...
Jawbone measures sleep
interruption during earthquake
https://jawbone.com/blog/napa-earthquake-effect-on-sleep/
Not statistics
Exhausted by Adrian Sampson on Flickr (CC-BY)
just
Not
Business
Intelligence
Basingstoke Office Staff Desk "No computer" by John Sheldon on Flickr (CC-BY,NC,SA)
just
http://dashburst.com/infographic/big-data-volume-variety-velocity/
Multicolour Jelly Belly beans in Sugar! by MsSaraKelly on Flickr (CC-BY)
Requirements on
Big data specific to
freight tran...
Human resources
Reduction in driver
turnover, driver
assignment, using
sentiment data
analysis
Real-time capacity
availabi...
smile! by Judy van der Velden (CC-BY,NC,SA)
Anticipatory
shipping
http://www.scdigest.com/ontarget/
14-01-21-1.php?cid=7767
http://www.scdigest.com/ontarget/
14-01-21-1.php?cid=7767
Anticipatory
shipping Package item(s) as a package for
eventual ...
7Big Data Best Practice Across Industries
Usage of data in order to:
Increase Level of
Transparency
Optimize Resource
Cons...
http://blog.digital.telefonica.com/?press-release=telefonica-dynamic-insights-launches-smart-steps-in-the-uk
Vizualisation
Created by Oliver O'Brien (UCL Geography/UCL CASA)
Vizualisation/combination
Vizualisation/combination
Measure
real-time
system
behaviour
Emil Johansson - EJOH.SE
Manage complex systems
Avoid unpleasant surprises
Predict future events
Domain
knowledge
critical!
See for instance: Waller, M. A. and Fawcett, S. E. (2013), Data
Science, Predictive Analytics, ...
The Challenger by Martín Vinacur on Flickr (CC-BY)
Not all ideas age with grace
The Challenger by Martín Vinacur on Flickr (CC-BY)
Not everyone will want to
adopt new things…
Customer
controls
last mile
Faster
and better
returns
Better
delivery
experience
Secure
identification
on pickup/
delivery...
Customer
controls
last mile
Faster
and better
returns
Better
delivery
experience
Secure
identification
on pickup/
delivery...
Even if it hurts.
Even if it hurts. Although…
Indiana Jones
The Last Mile - the holy Grail of e-commerce
It’s not business as usual.
Get used to it.
This is the internet
happening to freight
transport.
There is no ’usual’
anymo...
OKIMG_5751 by taymtaym on Flickr (CC-BY)
Logistikpodden.se
Eldsjälar
Experter
(Föreslå gärna…)
Torsdagar
E-commerce and
fr...
E commerce and freight transport - Chasing the last mile, one byte at a time
E commerce and freight transport - Chasing the last mile, one byte at a time
E commerce and freight transport - Chasing the last mile, one byte at a time
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E commerce and freight transport - Chasing the last mile, one byte at a time

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The freight transport industry is facing large challenges when it comes to e-commerce. This rapidly growing sector has high demands on service and performance from the freight system - demands that are seldom met with satisfaction.

Digitization and digitalization are two forces of nature that the transport industry needs to harness and exploit in order to meet these demands.

Publicada em: Tecnologia
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E commerce and freight transport - Chasing the last mile, one byte at a time

  1. 1. E-commerce and freight transport Chasing the last mile - one byte at a time Per Olof Arnäs, PhD Chalmers University of Technology Service Management and Logistics per-olof.arnas@chalmers.se about.me/perolofarnas Slides: slideshare.net/poar @Dr_PO OKIMG_5751 by taymtaym on Flickr (CC-BY)
  2. 2. Demographic and social change Shift in economic power Rapid urbanisation Technological breakthroughsClimate change and resource scarcity 5 GLOBAL TRENDS Source: PWC (google: pwc megatrends 2014)
  3. 3. Process improvement Service developm entInfrastructure developm ent Customer controls last mile Faster and better returns Better delivery experience Secure identification on pickup/delivery Distribution of food Home delivery Support companies that want to add E- commerce to their business Collect-in-store Local same-day delivery Improved delivery note Delivery and pickup during weekends Marketing of the E-channel Sustainable and climate friendly 3PL targeted at E- commerce Faster, more reliable and secure deliveries in Europe Better infrastructure on consumer side Better security Source: Svensk Digital Handel 2014 Bo Zetterqvist Areas of development for logistics companies in relation to e-commerce
  4. 4. Process improvement Service developm entInfrastructure developm ent Customer controls last mile Faster and better returns Better delivery experience Secure identification on pickup/delivery Distribution of food Home delivery Support companies that want to add E- commerce to their business Collect-in-store Local same-day delivery Improved delivery note Delivery and pickup during weekends Marketing of the E-channel Sustainable and climate friendly 3PL targeted at E-commerce Faster, more reliable and secure deliveries in Europe Better infrastructure on consumer side Better security Source: Svensk Digital Handel 2014 Bo Zetterqvist Areas of development for logistics companies in relation to e-commerce Digital development needed in freight transport
  5. 5. Customer controls last mile Faster and better returns Better delivery experience Secure identification on pickup/ delivery Collect-in- store Improved delivery note Sustainable and climate friendly 3PL targeted at E-commerce Faster, more reliable and secure deliveries in Europe Better security Source: Svensk Digital Handel 2014 Bo Zetterqvist Digital development needed in freight transport Process improvement Use ICT to make the system more efficient Real-time decision making, footprinting, better digital interaction between stakeholders Service development Use ICT to create new services Digital information enables new business models Infrastructure development Use ICT to interact with infrastructure Location Based Intelligence etc.
  6. 6. Customer controls last mile Faster and better returns Better delivery experience Secure identification on pickup/ delivery Collect-in- store Improved delivery note Sustainable and climate friendly 3PL targeted at E-commerce Faster, more reliable and secure deliveries in Europe Better security Source: Svensk Digital Handel 2014 Bo Zetterqvist Digital development needed in freight transport Process improvement Use ICT to make the system more efficient Real-time decision making, footprinting, better digital interaction between stakeholders Service development Use ICT to create new services Digital information enables new business models Infrastructure development Use ICT to interact with infrastructure Location Based Intelligence etc. The freight industry has work to do…
  7. 7. RESOURCE UTILISATION LOW Source: Kent Lumsden Safety imbalance Variation in resource demand Chain imbalance Caused by the chain Technological imbalance E.g. mismatch in equipment Operational imbalance Goods and resource flow not compatible Structural imbalance Uneven transport demand
  8. 8. RESOURCE UTILISATION LOW Source: Kent Lumsden Safety imbalance Variation in resource demand Chain imbalance Caused by the chain Technological imbalance E.g. mismatch in equipment Operational imbalance Goods and resource flow not compatible Structural imbalance Uneven transport demand Several of these imbalances can be reduced by reducing uncertainties
  9. 9. January February March April May June July August September October November December 10% Nov 25 When do we start generating profit? Profit margin = Sales - Cost Sales
  10. 10. January February March April May June July August September October November December 10% Nov 25 2% Dec 25 When do we start generating profit? Profit margin = Sales - Cost Sales
  11. 11. January February March April May June July August September October November December 10% Nov 25 1% Dec 29 2% Dec 25 When do we start generating profit? Profit margin = Sales - Cost Sales
  12. 12. The transport industry does not like real-time decisions. At all. Batch-handling Zip codes Zones Time-tables DSC_9073.jpg by James England on Flickr (CC-BY)
  13. 13. Image: Alain Delorme, alaindelorme.com The current model is focused on economy of scale and standardization
  14. 14. But the biggest problem in transportation is time. There is not enough of it. Ever. InSearchOfLostTimebybogenfreundonFlickr
  15. 15. The current paradigm
  16. 16. So… What are we doing about all this?
  17. 17. Things are happening outside the freight industry (and have been for some time)
  18. 18. Things are happening outside the freight industry (and have been for some time) Image: Richard Hancock, twitter.com/CanaryWorf
  19. 19. Stage Coach Wheel by arbyreed on Flickr Development of transportation technology has been fairly linear …for the last 5500 years
  20. 20. We are in the middle of a gigantic exponential development curve beginning
  21. 21. A new global eco system where new types of, knowledge based, industries compete with traditional ones http://jaysimons.deviantart.com/art/Map-of-the-Internet-1-0-427143215
  22. 22. Startups don’t compete with airlines... by purchasing a bunch of planes hiring a bunch of pilots and locking up a bunch of terminals at airports. Quote: bryce.vc/post/18404303850/the-problem-with-innovation Image: Connecting the community, my Twitter strategy, and American Airlines at DFW by Trey Ratcliff on Flickr (CC-BY,NC,SA)
  23. 23. Startups compete with airlines by inventing videoconferencing. Startups don’t compete with airlines... by purchasing a bunch of planes hiring a bunch of pilots and locking up a bunch of terminals at airports. Quote: bryce.vc/post/18404303850/the-problem-with-innovation Image: Connecting the community, my Twitter strategy, and American Airlines at DFW by Trey Ratcliff on Flickr (CC-BY,NC,SA)
  24. 24. 355:365:2015BWH by hermitsmoores on Flickr (CC-BY,NC,SA) Make analogue information digital Digitization:
  25. 25. MobileWorldCongress2016byKārlisDambrānsonFlickr(CC-BY) Increased use of digital technology Digitalization:
  26. 26. MobileWorldCongress2016byKārlisDambrānsonFlickr(CC-BY) Increased use of digital technology Digitalization: Make analogue information digital Digitization: Both are important! (and interesting)
  27. 27. Ominous Windmill by Conrad Kuiper on Flickr (CC-BY,NC,SA) Digit(al)ization is not a trend
  28. 28. Ominous Windmill by Conrad Kuiper on Flickr (CC-BY,NC,SA) Digit(al)ization is not a trend It is a force of nature
  29. 29. Gartners Hype Cycle for Emerging Technologies Augmenting humans with technology Machines replacing humans Humans and machines working alongside each other Machines better understanding humans and the environment Humans better understanding machines Machines and humans becoming smarter
  30. 30. Gartners Hype Cycle for Emerging Technologies Source: Gartner July 2015 Could affect transportation and logistics
  31. 31. The Last Mile - the holy Grail of e-commerce
  32. 32. Integration of digital and physical worlds http://www.sygic.com/gps-navigation/addon/head-up-display
  33. 33. Say hi to the new sensors http://mobsentech.com
  34. 34. ”New” modes of transport https://www.youtube.com/watch?v=50sv4M4rgBM https://www.youtube.com/watch?v=HG76DcXySuw
  35. 35. More automation
  36. 36. The sharing economy hits freight transport (again and again…)
  37. 37. Servitization Move up in the value chain Upgrade drop points Consumer services Expose data Mall of Scandinavia http://www.smartcompany.com.au/growth/innovation/41765-online-retailer-offers- a-courier-that-waits-at-your-door-fashion-advice-not-included.html https://www.amazon.com/dashbutton https://www.shyp.com
  38. 38. The Action of New York City by Trey Ratcliff on Flickr (CC-BY,NC,SA) Real-time (data driven) decision making Data collection Data processing Data exploitation http://mindconnect.se/ http://waze.com https://mydrive.tomtom.com/
  39. 39. Real-time decision making not always successful…
  40. 40. Another thing to keep tabs on
  41. 41. Bitcoin, bitcoin coin, physical bitcoin, bitcoin photo by Antana on Flickr (CC-BY,SA) Block chain technology Records transactions and data among actors that do not trust each other Fully decentralized
  42. 42. https://news.bitcoin.com/nimber-disrupts-logistics-system-blockchain-matters/ http://www.economist.com/news/leaders/21677198-technology-behind- bitcoin-could-transform-how-economy-works-trust-machine Bitcoin, bitcoin coin, physical bitcoin, bitcoin photo by Antana on Flickr (CC-BY,SA) http://www.coindesk.com/how-bitcoins-technology- could-make-supply-chains-more-transparent/ https://news.bitcoin.com/future-use-cases-blockchain- technology-parcel-tracking-regardless-courier/ Block chain technology Records transactions and data among actors that do not trust each other Fully decentralized
  43. 43. Big data in freight transport Film by Foursquare. Google: checkins foursquare
  44. 44. 2011 2013 2015 ”Big data is an all- encompassing term for any collection of data sets so large and complex that it becomes difficult to process using on-hand data management tools or traditional data processing applications.” - Wikipedia 2015
  45. 45. 892 by benmschmidt on Flickr (C)19th century shipping visualized through the logs of Matthew Fontaine Maury (1806-1873), US Navy Shipping movements in the 19th century
  46. 46. Jawbone measures sleep interruption during earthquake https://jawbone.com/blog/napa-earthquake-effect-on-sleep/
  47. 47. Not statistics Exhausted by Adrian Sampson on Flickr (CC-BY) just
  48. 48. Not Business Intelligence Basingstoke Office Staff Desk "No computer" by John Sheldon on Flickr (CC-BY,NC,SA) just
  49. 49. http://dashburst.com/infographic/big-data-volume-variety-velocity/
  50. 50. Multicolour Jelly Belly beans in Sugar! by MsSaraKelly on Flickr (CC-BY) Requirements on Big data specific to freight transport Geocoded data Decentraliseddata Flows Goods Resources Value Information Products Multiple perspectives Strategic Tactical Operative Predictive
  51. 51. Human resources Reduction in driver turnover, driver assignment, using sentiment data analysis Real-time capacity availability Inventory management Examples of applications in freight (Waller and Fawcett, 2013) Transportation management Optimal routing, taking into account weather, traffic congestion, and driver characteristics Time of delivery, factoring in weather, driver characteristics, time of day and date Forecasting Waller, M. A. and Fawcett, S. E. (2013), Data Science, Predictive Analytics, and Big Data: A Revolution That Will Transform Supply Chain Design and Management. JOURNAL OF BUSINESS LOGISTICS, 34: 77–84
  52. 52. smile! by Judy van der Velden (CC-BY,NC,SA) Anticipatory shipping http://www.scdigest.com/ontarget/ 14-01-21-1.php?cid=7767
  53. 53. http://www.scdigest.com/ontarget/ 14-01-21-1.php?cid=7767 Anticipatory shipping Package item(s) as a package for eventual shipment to a delivery address Associate unique ID with package Select destination geographic area for package Ship package to selected distribution geographic area without completely specifying delivery address Orders satisfied by item(s) received? Package redirected? Determine package location Convey delivery address, package ID to delivery location Assign delivery address to package Deliver package to delivery address Convey indication of new destination geographic area and package ID to current location Yes Yes No No smile! by Judy van der Velden (CC-BY,NC,SA)
  54. 54. 7Big Data Best Practice Across Industries Usage of data in order to: Increase Level of Transparency Optimize Resource Consumption Improve Process Quality and Performance Increase customers loyalty and retention Performing precise customer segmentation and targeting Optimize customer interaction and service Expanding revenue streams from existing products Creating new revenue streams from entirely new (data) products Exploit data for: Capitalize on data by: New Business Models Customer Experience Operational Efficiency Use data to: • Increase level of transparency • Optimize resource consumption • Improve process quality and performance Exploit data to: • Increase customer loyalty and retention • Perform precise customer segmentation and targeting • Optimize customer interaction and service Capitalize on data by: • Expanding revenue streams from existing products • Creating new revenue streams from entirely new (data) products New Business ModelsCustomer ExperienceOperational Efficiency Figure 4: Value dimensions for Big Data use cases; Source: DPDHL / Detecon DHL 2013: ”Big Data in Logistics”
  55. 55. http://blog.digital.telefonica.com/?press-release=telefonica-dynamic-insights-launches-smart-steps-in-the-uk Vizualisation
  56. 56. Created by Oliver O'Brien (UCL Geography/UCL CASA)
  57. 57. Vizualisation/combination
  58. 58. Vizualisation/combination
  59. 59. Measure real-time system behaviour Emil Johansson - EJOH.SE
  60. 60. Manage complex systems
  61. 61. Avoid unpleasant surprises
  62. 62. Predict future events
  63. 63. Domain knowledge critical! See for instance: Waller, M. A. and Fawcett, S. E. (2013), Data Science, Predictive Analytics, and Big Data: A Revolution That Will Transform Supply Chain Design and Management. JOURNAL OF BUSINESS LOGISTICS, 34: 77–84 Data scientists - the new superstars Create teams
  64. 64. The Challenger by Martín Vinacur on Flickr (CC-BY) Not all ideas age with grace
  65. 65. The Challenger by Martín Vinacur on Flickr (CC-BY) Not everyone will want to adopt new things…
  66. 66. Customer controls last mile Faster and better returns Better delivery experience Secure identification on pickup/ delivery Collect-in- store Improved delivery note Sustainable and climate friendly 3PL targeted at E-commerce Faster, more reliable and secure deliveries in Europe Better security Source: Svensk Digital Handel 2014 Bo Zetterqvist Digital development needed in freight transport Process improvement Use ICT to make the system more efficient Real-time decision making, footprinting, better digital interaction between stakeholders Service development Use ICT to create new services Digital information enables new business models Infrastructure development Use ICT to interact with infrastructure Location Based Intelligence etc.
  67. 67. Customer controls last mile Faster and better returns Better delivery experience Secure identification on pickup/ delivery Collect-in- store Improved delivery note Sustainable and climate friendly 3PL targeted at E-commerce Faster, more reliable and secure deliveries in Europe Better security Source: Svensk Digital Handel 2014 Bo Zetterqvist Digital development needed in freight transport Process improvement Use ICT to make the system more efficient Real-time decision making, footprinting, better digital interaction between stakeholders Service development Use ICT to create new services Digital information enables new business models Infrastructure development Use ICT to interact with infrastructure Location Based Intelligence etc. The freight industry has work to do…
  68. 68. Even if it hurts.
  69. 69. Even if it hurts. Although… Indiana Jones
  70. 70. The Last Mile - the holy Grail of e-commerce
  71. 71. It’s not business as usual. Get used to it. This is the internet happening to freight transport. There is no ’usual’ anymore. Hello Kitty Darth Vader by JD Hancock on Flickr (CC-BY)
  72. 72. OKIMG_5751 by taymtaym on Flickr (CC-BY) Logistikpodden.se Eldsjälar Experter (Föreslå gärna…) Torsdagar E-commerce and freight transport Chasing the last mile - one byte at a time Per Olof Arnäs, PhD Chalmers University of Technology Service Management and Logistics per-olof.arnas@chalmers.se about.me/perolofarnas Slides: slideshare.net/poar @Dr_PO

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