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Transportation and Logistics Ebook
Transportation and Logistics Ebook
IN TRANSPORTATION
AND LOGISTICS
Re-inventing the way
the world works
TABLE OF CONTENTS
TRANSPORTATION
AND LOGISTICS IS
ON THE MOVE
1
Transportation and
Logistics is on the move
The world’s logistics and transportation industry is changing fast – and is in need of
solutions to a number of key, pressing business issues. These include:
• a continuing demand for faster, cheaper and more ecologically sound ways of
moving goods
• stronger requirements for transparency and accountability of goods sourcing
and delivery
• the need for more efficient warehousing to keep up with the pace of goods man-
ufacturing and distribution
• and global economies that are increasing driven by ecommerce transactions
that require delivery of goods directly to the homes of consumers.
Meeting these challenges is also complex, as the transportation and logistics sec-
tor covers a vast array of businesses. And it’s huge.
2
A Major Driver of the Economy
3
Needless to say, this is a massive, complex and tightly integrated sector of the
economy – and it plays a vital role in the work of almost every other business. It’s
hard to think of an enterprise that doesn’t depend on transportation and logistics
companies to fulfill some vital function in its business.
According to a recent report by strategy and analysis firm PwC, technology will
play a big factor in the evolution of transportation and logistics as it works to meet
the many challenges it faces. One of the key concepts in the PwC report is the
idea of developing a “Physical Internet” that mirrors the digital internet that under-
pins much of our work today.
The Physical Internet (or PI) is a concept first articulated by Dr. Benoit Montreuil,
who is the Coca-Cola Material Handling & Distribution Chair in the Stewart School
of Industrial & Systems Engineering at Georgia Tech. He is also Director of the
Physical Internet Center and a leader of the Supply Chain & Logistics Institute
4
– and has been a champion of the idea that the way information moves around
on the “digital internet” should be the model for a new “Physical Internet” that will
underpin the future of global logistics and manufacturing.
In its report, PwC explains that the Physical Internet “is based on the idea that
physical objects can be more efficiently moved around if they become more stan-
dardized and share common channels, like data packets on the internet”.
The report also suggests that achieving the goal of a PI will require modular com-
ponents as well as and standard interfaces and protocols. “In addition, hubs and
networks across transport modes will need to be better synchronized, and IT appli-
cations and networks will also need to operate together,” it concludes.
5
CHAPTER TWO
AUGMENTED
REALITY TAKES
THE WHEEL
6
Augmented Reality takes the wheel
As we established in Chapter 1, the Transportation and Logistics sector is an
industry undergoing a great deal of change. A mix of factors are all propelling and
enabling change in one form or another. They include:
• new government regulations (on everything from climate change to the amount
of time truck drivers can be behind the wheel)
• demands for greater transparency about where goods come from (increasingly
addressed through the use of blockchain technology)
• a lack of infrastructure spending
• huge growth in ecommerce
• the looming specter of autonomous long-haul trucks.
The recent report by strategy and analysis firm PwC that does a great job of graph-
ically representing many of these factors.
7
The series of concentric circles on this PwC chart shows how these trends relate
to one another. PwC sees the sector in terms of four central scenarios: one about
sharing the “physical internet”, another about the growing number of new start-up
players disrupting the overall transportation and logistics market, a third relating
to the complexity of the new competitive landscape and the final scenario relating
to the question of how larger market players attempt to achieve greater scale by
acquiring smaller (and often newer players).
Meanwhile, 3-D printing can offer a way to provide fast, local and custom manu-
facturing of some goods – and allow certain kinds of industrial enterprises to scale
in a way that might otherwise be limited by the logistics and transportation options
available to them. Drones can also act as a supplement to traditional delivery op-
tions.
8
There’s a lot more to dig into in each one of those trends, but before doing so, it
may help to take a closer look at one key element of the changing transportation
and logistics landscape: the trucking industry.
Line and current president of the 21st Century Driver and Truck Alliance.
Mr. Drinkard, who also served two terms as a member of the American Transporta-
tion Research Institute’s research advisory committee, says there are many ex-
amples of this – starting with the much-anticipated arrival of autonomously-driven
heavy-duty trucks.
Leading global truck makers such as Volvo Trucks Global and PACCAR, (which
manufactures the Kenworth, Peterbilt and DAF lines of trucks) have automated
driving work underway.
In addition, many start-ups (such as TuSimple and Embark Technology) are work-
ing on autonomous trucks. Technology companies such as Uber and NVIDIA are
also looking to have an impact in this area.
Mr. Drinkard also points out that there is a significant shortage of long haul
truck drivers right now – a situation only made more urgent by the huge, e-com-
merce-driven increases in the volume of goods being shipped. “It’s really an inter-
esting time,” he said. “The advent of technologies for autonomous vehicles is now
more of a discussion for everybody. Driver (shortage) issues are bringing that into
play.”
9
He suggests, however, that governments will need to be a lot more effective in
repairing existing infrastructure – and building out the new infrastructure (includ-
ing charging stations for electric trucks) to properly support long haul autonomous
trucking.
But Drinkard and other leading voices in the trucking industry agree that this won’t
happen overnight – and that there will be a lengthy period of change in the industry
before the use of autonomous trucks will be commonplace.
For example, Göran Nyberg, President of Volvo Trucks North America, said in Feb-
ruary of 2018 that change on this front will be gradual. “At some point in the future,
self-driving Volvo trucks will be a reality on our roads in North America and part of
our society, probably starting in confined or private areas under controlled condi-
tions,” he explained. “We continue preparing for deployment of trucks with higher
levels of driver assistance systems, but exact timing depends on many things,
namely regulations, infrastructure and safety standards, and market demand.”
10
In the meantime, Mr. Drinkard says that trucking companies need to find solutions
to both the pressing driver shortages – and business challenges created by lengthy
and expensive downtime when long haul trucks need to be serviced.
He says that demand for long haul trucking services - and the cost and complexity
of both the trucks themselves and the digital equipment needed to diagnose and
repair them – makes it tough for repair operators to keep up. In addition, the in-
dustry is also facing shortages of skilled and experienced long-haul trucking repair
staff as experienced baby-boomer aged mechanics retire and the industry strug-
gles to hire people to replace them.
Mr. Drinkard also spoke about the increasing amount of downtime faced by truck-
ing industry. He said that it has caused a lot of companies to see a rise from hav-
ing to maintain a 5% contingency allowance (in terms of extra truck capacity to fill
in when other trucks in a fleet are down) to needing a 15% contingency of extra
trucks.
He said another factor in the increase in downtime can be attributed to the rising
cost of diagnostic tools in today’s increasingly complex trucks - meaning that only
the service departments of major dealerships can afford to have the tools. As a
result, he says those shops charge not only for hookup to diagnose repair and
maintenance issues, but also charge for the computer time to do the diagnostics
and then for the labor of the specialist that is reading and implementing the results
of the diagnosis.
11
AR offers part of the solution
“Downtime keeps trucks off the road,” said Mr. Johnston. “If a truck is off the road,
the company (or person) that owns it does not make money and neither does the
driver - who is a big stakeholder in this (especially when the driver is also the own-
er operator). Asset utilization is the key performance indicator in trucking.”
Secondly, the local mechanic can use their smart glasses (along specialized soft-
ware such as Design Interactive’s AUGMENTOR running on Microsoft HoloLens)
to systematically record the steps they take to make a given truck repair – and then
make that set of instructions available for editing and sharing with other mechanics
in the company (using a version of AUGMENTOR that incorporates Atheer’s AiR
Enterprise).
12
Those are just two of the many benefits that an AR solution can provide to the
maintenance and repair side of the trucking industry. Johnston also adds that he
is seeing demand for this kind of solution being driven by several hiring-related
trends in the industry:
• An image problem within the trucking industry as it works to hire new people –
with what he describes as a “poor perception due to assumed lack of modern-
ization and less than ideal working conditions”
• A huge shortage of people – with more than 75,000 jobs that the industry needs
to fill by 2022, yet a shrinking talent pool
• Fierce competition with other industries for the best technician talent
“
Downtime keeps trucks off the road. If a truck is off the road,
the company (or person) that owns it does not make money and
neither does the driver.
MATT JOHNSTON
He also points to recent government decisions about banning certain types of ve-
hicles from large cities – such as the recent news that German courts have upheld
the right of German cities to ban diesel cars (and the eventual potential impact on
diesel trucks). “What is a fleet to do if they can’t enter the city?,” Johnston asks.
“And how far behind will America or North America be?”
He also observed that the demand to reduce diesel use will drive more trucking
companies to look at alternative power vehicles – some of which were exhibitors at
the March 2018 TMC 2018 annual exhibition and conference in Atlanta, Georgia.
He suggested that this kind of change is causing all kinds of companies to rethink
the businesses they are really in – and where they add value. “Ford is a mobility
company, not a car company,” he said. “Who would have said that 5 years ago?”
13
CHAPTER THREE
ASSESSING
YOUR NEEDS
14
Assessing your needs
How should logistics and transportation companies go about assessing their needs
for an AR solution (and calculate the Return on Investment it could provide)?
The good news is that the process for assessing the need for AR is pretty con-
sistent across all parts of the transportation and logistics sector, whether you are
talking about logistics services, air and express delivery services (EDS), freight rail,
maritime transportation (including carriers, seaports, terminals, and labor involved
in the movement of cargo and passengers by water) or trucking.
The promise of Augmented Reality is to help ensure that industrial workers in all
parts of the sector can get fast access to the remote experts, instructional content
and collaboration tools they need to quick resolve any issues that are preventing a
ship from leaving port, a plane getting in the air, a truck getting back on the road, a
cargo train leaving the station or goods leaving the warehouse.
So the framework for thinking about Return on Investment starts right there. What
does downtime cost?
15
To get a sense of just how much downtime can cost, consider the results of a 2006
joint survey of 101 manufacturing executives in the auto industry by Nielsen Re-
search and Advanced Technology Services (ATS). The survey found that the cost
of stopped production was an average of $22,000 per minute (which comes to an
eyebrow-raising $1.32 million per hour).
Suffice it to say that for some parts of the transportation and logistics industry
today, that hourly downtime number would still be significant. Recall the comments
made by Duke Drinkard, retired vice president of maintenance at Southeastern
Freight Line and current president of the 21st Century Driver and Truck Alliance, in
the previous chapter - where he discussed the very specific downtime costs creat-
ed by repair delays for long-haul trucks.
“
Accurately calculating downtime should be a part of how you
plan for AR – and think about the return on an AR investment.
It’s where AR can really make a huge, measurable difference.
He said that shortages of skilled and experienced long-haul trucking repair staff
have translated to longer repair times for trucks. It has caused a lot of companies
to see a rise from having to maintain a 5% contingency allowance (in terms of ex-
tra truck capacity to fill in when other trucks in a fleet are down) to needing a 15%
contingency of extra trucks.
Accurately calculating downtime should be a part of how you plan for AR – and
think about the return on an AR investment. It’s where AR can really make a huge,
measurable difference.
16
So as you look at whether investing in Augmented Reality will provide the return on
investment that you need, you may well be able to make that calculation based on
the cost of downtime reduction alone. You need to start with a clear and accurate
baseline for what it currently costs your enterprise to deal with downtime issues
and - if possible - be able to break out cases where the cost of the downtime was
significantly increased by not being able to get the right experienced person deal-
ing with the issue in a timely way.
One great example of where this strategy was employed well comes from Porsche
Cars North America. In November of last year, Porsche Cars North America, Inc.
(PCNA) announced the introduction of “Tech Live Look,” an Augmented Reality
technology designed to improve technical services at Porsche dealerships in the
United States.
17
CHAPTER FOUR
BEST PRACTICES
FOR PLANNING AND
IMPLEMENTING AN
AR SOLUTION
18
Best practices for planning and
implementing an AR solution
So far, we have looked at the critical business issues facing many parts of the
Transportation and Logistics sector, challenges in specific areas of the sector (such
as the trucking industry) and why Augmented Reality might be the solution to meet-
ing some of those challenges.
Now we’re going to take a look at best practices for planning and implementing an
AR solution. To do this, it’s important to recognize that AR can offer transforma-
tional change for your company, but also that it won’t happen overnight. AR can
help rewrite the way you think about getting work done - and it broad applicability
across the Transportation and Logistics sector.
Whether you are in logistics services, air and express delivery services (EDS),
freight rail, maritime transportation (including carriers, seaports, terminals, and
labor involved in the movement of cargo and passengers by water) or trucking,
AR solutions offer the potential to fundamentally improve what you offer – and the
speed with which you can respond to change.
19
Here are a few strategies that can help ensure the success of your experience with
AR:
• Know that it is a journey – This journey will start with demonstrations from AR
companies and then your own internal evaluations of what each of those com-
panies has to offer. From there, you might move to a proof of concept (to en-
sure that it can work in your business), a trial in an internal lab, a field trial and
then an “early adopter” deployment. You’ll learn from each of those steps and
bring everything you’ve learned to the eventual design and deployment of your
solution.
• Get someone to adopt and sponsor the project on the business side of
the company - You don’t want AR to be simply an investigation by the IT de-
partment. Operations, for example, can be a great business owner for this kind
of project. Maintenance can also be a logical home for the project. But ideally,
ownership of an AR project should rest with a business element of your orga-
nization - so that true buy-in of the return on investment (ROI) measurements
you’ll put in place for the project can happen in an effective way.
• Involve the teams who will use AR on the front line - Field services, for
example, is the perfect group from whom you need to get feedback and sug-
gestions about any AR implementation. All those groups will listen because they
have the kinds of pain points that AR can potentially relieve.
One other key thought is that you will get the most from an AR solution when you
“think big” about the kinds of business problems you want to tackle. While you may
begin with a modest proof of concept, ideally you want that PoC to be in service of
a much broader vision about where you think AR might be able to take your busi-
ness.
AR solutions provide the most benefit when they are used to help tackle
large, meaningful business problems.
20
CHAPTER FIVE
21
Getting the most from
Augmented Reality
In the first four chapters of this book, we looked at some overall business trends in
the transportation and logistics sector, did a “deep dive” on one transportation and
logistics sector in particular (trucking), explored how any transportation and logis-
tics company considering Augmented Reality as a solution to some of its business
challenges might calculate “return on investment” (ROI) and finally we looked at
how you might begin planning the roll-out of an augmented reality solution.
Before looking in detail at what it means to run an AR solution within your organiza-
tion, consider for a minute where we are in the AR adoption curve - and the kinds
of considerations you may be thinking about before any widespread adoption of an
AR solution. You may want to implement an AR system aimed at the Warehouse
and Logistics sector - and want to reduce errors, provide faster fulfillment of orders
or enable “pick by vision” scenarios that can eliminate the need for clipboards and
handheld scanners.
22
Alternatively, you may have a need to service trucks, provide maintenance, repair
and operations support for railways and shipping companies or service expensive
commercial aircraft. Whatever your need, the key is that you want the right solution
at the right time. You don’t want to adopt a new technology too early.
History is littered with examples of technologies that were ahead of their time – in-
cluding the videophone and the handheld computer. Both have been available, in
one form or another, since the 1980s – but neither of them achieved widespread
use and popularity until they morphed into a form that was easier to use and pro-
vided the right applications.
Not only was the original videophone of the late 1980s expensive and heavily con-
strained by the limited bandwidth of the day, but it wasn’t easy to use. It would take
another two decades before computer-based videoconferencing (and eventually
smartphone phone and tablet-based apps such as FaceTime, WebEx, Skype and
Facebook) become commonplace.
23
The same is true of AR – where the right interaction model can make all the differ-
ence between something that provides a great demonstration of potential and a
solution that can be tested, piloted and rolled out in a real-world setting.
24
• Head motion - In situations where voice
commands and gestures are not suit-
able, (such as noisy environments),
head motion is a great alternative. If
your AR solution provides multi-display
and sphere view technologies, it will
allow workers to access and scroll be-
tween content (including video feeds)
and drill into images, maps, and 3D
models with a simple motion of their
heads.
• Touch – Good AR solutions should
provide support for industry-standard
Head Motion
touchscreen devices so that workers
using popular phones and tablets can
leverage some of AR features (includ-
ing video conferencing, on-screen
guidance and documentation such as
shop manuals) when they are working
in environments where they don’t have
to use work gloves or carry tools in
their hands.
25
Use Data to Make Smart AR Decisions
As you assess the potential Augmented
Reality solutions that may fit your busi-
ness, you need to keep in mind that the
value of the AR solution lies not only in
what it can help your employees do (us-
ing features such as remote expert video
calling and contextual surfacing of step-by-
step instructions), but also the insight you
can derive from the work that your employ-
ees do while using the AR solution.
Atheer’s own AiR™ Enterprise solution, for example, includes the ability to allow
both the creation and delivery of a variety of workflows - including step-by-step in-
structions delivered to smartglasses (within the user’s field of vision) as “taskflows”,
but also gain vital business insight on how those taskflows are used.
For any enterprise customer that relies on working through compliance checklists
or needs to follow very specific processes, there’s huge value in trackable AR-de-
livered instructions such as taskflows. Real business insight can be gained from
being able to:
• Get realtime information about which taskflows each user has undertaken –
There’s no point in putting a lot of time and energy in developing in-depth, de-
tailed taskflows if your workforce is not going to adopt them. Being able to see
which of your employees is using a particular taskflow can be a big help in un-
derstanding why it may not be working. It could be because users are unaware
of the availability of the workflow, that there are problems with the workflow it-
self – or that particular users are finding it hard to adapt to new ways of working
and perhaps need more training and encouragement.
26
• See how far each user gets in executing on those taskflows – This is vital in
both getting a more detailed understanding of how successfully a given task-
flow is being adopted by your workforce. It can also be used to provide insight
about whether you need to refine or improve a particular step in the workflow.
If, for example, you find that most users are halting work on a 10-step taskflow
at Step 4, you’ll have clear data that tells you there are problems with either the
instructions you have provided or in some aspect of the work itself within that
step. You’ll then be able to talk to the users, figure out the issues they are hav-
ing and then refine the workflow so that it can be used more effectively.
• Identify how long it takes each user to execute on a given task – In designing a
taskflow for a particular task, you will probably have a target timeframe in mind
for how long it takes to accomplish each task. With taskflow reporting, you can
see exactly when each step in the taskflow was started – and any times when
users had to pause and resume any part of a taskflow. For taskflow designers,
this is powerful, as it again helps them understand whether the taskflow is actu-
ally helping employees to be more effective.
• Make sure that all users are working with the very latest version of task flows
– It’s important to have a solution that offers task flow synchronization. As com-
plex task flows are improved and updated, you want to ensure that they are
immediately available to all connected users. Synchronization ensures that your
workforce has immediate access (via their smart glasses) to the very latest up-
dated task flow guidance so that they can do their jobs in the fastest, safest and
more effective way possible. This is particularly important in dynamic environ-
ments where processes and workflows can change quickly. It’s also very useful
when new compliance rules need to be reflected quickly in taskflows.
• Collect and store taskflow data locally – You also shouldn’t need to be con-
nected to a network in order to get the full benefit of taskflows. You will want
a solution that is designed to keep tracking the use – and effectiveness – of a
given taskflow, even while the smartglasses being used to deliver the taskflow
are offline. For a workforce that carries out maintenance work underground (on
perhaps a subway line or in a mine) and there is no data connectivity, you want
workers to be able to still load taskflows onto their smartglasses while they have
connectivity, do the work detailed in the taskflow and then have the data about
that work automatically uploaded the next time they connect to their network.
27
For any enterprise customer that relies on working through compliance checklists
or needs to follow very specific processes, there’s huge value in trackable AR-de-
livered instructions such as taskflows.
Getting data about how workflow components are used in your AR solutions pro-
vides a great way to not only assess the effectiveness of your workflows – and
drive changes to them based on the actionable business insights you are getting
about them – but also to quickly make the most up-to-date instructions available to
your entire workforce.
28
CHAPTER SIX
SETTING YOURSELF
UP FOR SUCCESS
29
Setting yourself up for success
To achieve the best success in the testing and rollout of your AR system:
• Make sure that you deploy AR devices to a select set of users early and get
feedback from them before undertaking a broader rollout.
• Be proactive about offering detailed feedback to the provider of any AR hard-
ware or software you use. Augmented Reality is still a young industry and any
good provider will want to know when something doesn’t work for your company
and why.
• Pay close attention to reliability during your lab and trial phases. Have high
standards. If your AR system falters or flickers or in any way doesn’t work prop-
erly when you roll it out broadly - even if it’s just a case of the WiFi signal being
lost - skepticism can creep in and your workforce may decide it’s too early to be
deploying this technology. You never get a second chance to make a first im-
pression.
• Just as you would have a pre-flight checklist before putting any new aircraft into
service, there’s also a defined process for getting an Augmented Reality into the
hands of your workforce in a way that’s going to deliver the maximum possible
return on investment.
30
To help provide clarity on that process, here’s our checklist:
1. Define the business problem you want to use AR to tackle first - Companies in
the transportation and logistics sector are now starting to see that they have
applicable ‘use cases’ for AR.
2. Define yours without limits. Be bold and consider the broadest possible applica-
bility – from production line to MRO shop floor to training scenarios. There are a
great many places where AR technology could offer value.
3. Identifying the right problem is important. Until you find that problem with high
impact on your company, you’re on the fringe and at some point, someone’s
going to step in saying ‘this doesn’t work for us’ or that it’s too expensive, it’s too
slow or there’s another priority.
4. Detail your current state: look at how you approach your business problems
now and what that approach costs you – In order to accurately measure the
benefit of any planned AR deployment, you’ll need a strong understanding of
your existing processes and approaches.
5. You’ll also require data about how well things work (or don’t work) now, with
measurements of downtime, time to resolve issues, maintenance costs, training
costs, new employee ramp-up times, safety and productivity all forming part of
that data set.
6. Recognize that one size does not fit all – As discussed earlier, know that you
may need different parts of an AR solution to meet the varying needs within
your business.
7. Make your assessment of your ‘current state ‘ as broad as possible, so that you
can gain a comprehensive view of how AR will benefit your industrial enterprise.
8. Try it and measure the results in the lab or the field - You need to come up with
a plan that covers who is going to do the testing in a lab and then who is going
to do the testing in the field. Have those people be the early advocates for the
solution – and pick people that care about change and want to try new things.
9. Learn and refine from your trials – Once you have a solution that works well in
the lab, take it to the field. This can be a controlled environment with real users.
If that field trial delivers (or exceeds) the expected results - and you’re tracking
how well it works from a hardware and software perspective (and you’re confi-
dent that you are using AR to solve the right problem), you can now truly deploy
it.
31
10. Plan for success by involving users early: the smartest person in AR deploy-
ment is all of us – AR represents a big change in how your company works. It
promises a lot. By involving everyone in the AR deployment (once you’ve un-
dertaken all the prep work outlined above), you can make sure that it will deliver
in its great promise – truly transforming the way your company works.
So start researching your AR solutions now. You don’t have to do this work by
yourself. Atheer is here to help.
Book a demonstration with Atheer today to further explore how AR can help pro-
vide answers to your transportation and logistics business challenges.
32