MATC Fall 2012 Lecture Series

1. Mid-America Transportation Center Fall Lecture Series
Technology at Werner
Tom Clements
Clements@WernerVAS.com
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2. COMPANY PROFILE
Premium provider of transportation and logistics
services, specializing in Truckload, Intermodal, LTL,
Ocean and Air services.
2011 Revenue: $2 billion 2011 Net Income: $103 million
NASDAQ: WERN Alliance Carriers: 8,500
Trucks: 7,300 Trailers: 23,165
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3. RECOGNIZED LEADER
2012, 2011, 2010, 2009
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4. THE STRENGTH OF WERNER
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5. COMPREHENSIVE SOLUTIONS
Freight Management Freight Movement Global Implementation Technological Advantages
Werner offers With a network of Providing door-to-door Our tools provide
complete 3PL supply 7,300 trucks, 8,500 services for customers instant
chain solutions across alliance carriers and companies of all sizes visibility across their
all shipping modes ocean, air and rail and industries as they supply chain, which
and geographies, from providers, we offer compete in today’s allows them to better
network design unsurpassed delivery global marketplace is manage their
through solutions worldwide. what sets us apart. business.
implementation.
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6. THE PATH OF WERNER PROGRESS
2003 2009
• Brokerage and • Safety improvement initiative
Intermodal expansion • Australia launch
2007
1956 • LH fleet reduction
• Founded 1998
by C.L. • Electronic driver
Werner logs (EOBR)
1986
• IPO
2008
• Fuel MPG initiative
• Balanced portfolio
initiative
2006
• Werner Global
Logistics formed
• China launch
1980 1999
• Deregulation • Mexico launch
• Canada designated
fleet formed
1992
• GPS on all trucks
• Dedicated, Regional
and TC fleets formed 6

7. TECHNOLOGY AREAS
Equipment / Fuel Regulation Systems BI / GIS / Analysis
Werner leverages Werner has long been Trucking may be Our tools enable our
many technological the leader in using simple, but Werner's customers to leverage
advances to improve technology to ensure complex systems our experience and
equipment compliance and provide a competitive technological
performance and safety within the advantage over investments to
reduce diesel fuel federally regulated others in the industry. manage their
consumption. trucking industry. transportation
network.
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8. ENVIRONMENTAL SUSTAINABILITY
Fuel Efficiency Initiatives
o Aerodynamic trucks & trailers
o ArrowShield trailer skirt development
o Speed management & driving behavior
o Automated tire inflation systems
o Computer controlled truck idling and paperless log system
o Weight reduction strategies
o LNG / CNG Engines
o Continual in-depth testing of the latest fuel saving technologies
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9. EQUIPMENT – ARROWSHIELD
• Proprietary trailer skirting system
• Internal development and testing more than 12 months
• U.S. Environmental Protection Agency SmartWay®
Transport Partnership verified
• Overall highway efficiency gain of 4 to 5 percent
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10. EQUIPMENT – WEIGHT REDUCTION
Aggressively pursuing weight reduction in our tractors & trailers.
Key items of focus:
• Reducing wheel base length
• Single wide based tires
• Dead or non-drive rear axles on tractors
• Smaller sleepers
• Reducing fuel tank size
• Aluminum wheels on trailers
• Aluminum cross members on trailers
• Horizontal exhaust system
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11. BEHAVIOR – DRIVER TRAINING PROGRAMS
Areas where driver behavior can
impact fuel consumption:
• Equipment maintenance
• Minimizing out-of-route miles
• Implementing proper driving habits:
• Speed
• Acceleration
• Progressive shifting
• Hard Break Monitoring
• Eliminating unnecessary truck
engine idling
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12. EQUIPMENT – DRIVER COMFORT
100 percent of fleet is currently
equipped with idle reducing
technology.
Diesel APU
Espar Heater Electric APU
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13. TIRE STRATEGIES
• Single wide-based
• Automatic tire inflation system
• MPG savings
• Tire consumption
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14. EQUIPMENT INITIATIVES
5 6
9
12
13
11
2
10
7 15
8 3 1
14 16
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1. Ultra Low Sulfur Diesel Fuel (ULSD) 9. Trailer boat tails
2. Lowered idle rpm 10. Automated tire inflation
3. Advanced lubricant 11. Aerodynamic tractor models
4. Automatic engine shut-offs 12. Stationary fifth wheel
5. Minimized tractor-trailer gap 13. Speed reduction
6. Lighter weight equipment 14. Trailer skirting
7. DEF 15. Wide based tires
8. Single drive axle 16. Under Tray System
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15. WERNER ENTERPRISES’ IMPACT
Results from fuel saving initiatives:
• 20 consecutive quarters of YOY improvement to mpg
• More than 50 million gallons saved from 2007 to YTD 2012
• More than 560,000 ton reduction in carbon footprint from 2007 to YTD 2012
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16. FUEL MPG IMPROVEMENT
Trucks 7,300 7,300
7.00 Mi / Truck 495 495
6.90 MPG 6.125 6.850
$/G 4.086 4.086
6.80 Mi/Day 3,613,500 3,613,500
6.70 G/Day 589,959 527,518 62,441
$/Day $ 255,134
6.60
6.50
6.40
6.40
MPG
6.30
6.20
6.10
6.00
5.90
5.80
5.70
5.60
5.50
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
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17. HOS AND EOBR
The FMCSA announced various changes HOS impact on Utilization decrease per tractor in the market
shippers
effective February 2012, with a compliance
date of July 2013. Decreased driver wage potential
Decreases capacity thus increases the
Primary rule change: 34 hour restarts will number of tractors needed to haul the same
amount of goods
now need to include two periods between
1 a.m. and 5 a.m. Overall impact higher transportation
costs
In late 2011, the U.S. Court of Appeals for the
Seventh Circuit overturned the FMCSA’s
proposal that would require carriers that have a
10 percent or higher rate of noncompliance with
HOS rules in any single compliance review to
put EOBR technology in place to monitor HOS.
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18. SAFETY PROCESS
Computer Based Training (CBT)
• Specific driver training (computer testing, pictures, video)
• Courses cover all aspects of driving, including seasonal planning
• Accessible from home or terminals
• Will be accessible in trucks with new Qualcomm units
Safety Improvement Training
• Safety KPI scorecard
• CSA monitors
• Corporate training
• Constant focus
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19. PAPERLESS
Paperless Orientation
On-line applications
When you re-apply we recall previous app info
Data for all employment forms is collected before arrival
During Orientation Electronic Signature Capture
Image merge and driver approval
Scott Andersen - Werner Enterprises
Professional of the Year 2011
Nebraska Trucking Association
September 2011
Saves ½ day of orientation for 300+/- driver hires per week.
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20. DRIVER CONTACT
Driver Portal
• Self service help 24/7
• Increased access to information
Text messages
• Not while they are driving
• Not while they are sleeping
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21. LIGHTWEIGHT SOLUTIONS
Drive cost out of the supply chain with a Werner Enterprises
Project Initiative value differentiator
• Increase your shipment weight capacity to more than 50,000, thus reducing your number of
shipments
• Reduce your carbon footprint without adding cost or complexity
Multiple options for creative solutions
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22. IT STAFFING OVERVIEW
• Analysis & Information Systems (AIS)
• 130 IT Staff
• SMART Transportation Management System
Java, Cold-Fusion, Informix
• Document Imaging, Portals, Internal Apps
.Net (C#), SQL Server
• DBA’s, Analytics, GIS, BI
DB2, SQL Server, .Net,
• Help Desk, System Administrators, Analytics
• Management Information Systems (MIS)
• 30 IT Staff
• IBM AS/400
• Controls Asset Functions
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23. METHODOLOGY
AIS uses the SCRUM methodology for Agile software development.
• User-driven project requests
• 30-day sprints (development cycles)
• Prioritized backlog of to-do items
• Trust users to know what they do for the business
• Quick steps to perform complex tasks
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24. DEVELOPMENT CYCLE
Waterfall Method = Business Involvement
= Usable Functionality Released
Project Approve Approve Plan
= Inspect / Adaptive Feedback
Approval &
Rank
Requirements
Identification`
Functional Test Plan
Sign Off
Code, Unit Test, Document
QA and Systems Test
Deploy to Production
Months
Sprints
Scrum Method
Project Approve
Approval &
Rank
Approve Plan Sign Off Approve Plan Sign Off Approve Plan Sign Off Approve Plan Sign Off Approve Plan Sign Off
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25. INFRASTRUCTURE
• Two on site data centers, one remote site Disaster recovery data center
• Diesel generators and fuel
• IBM DS8800 Storage
• IBM Metro Global Mirror
• Trends:
• Redhat Linux use growing
• Virtualization across several operating systems
• 20-60 hosts per
server
• Direct data line to China
• AVAYA VOIP Phones
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26. EDI
• 3 Million EDI transactions per month
• Converting onto Sterling International
• Historically batch processing was common
• Now Java Message Service (JMS) Queues
and Web Services make it real-time
• High Availability
• Off-site location running as a production instance
• HQ data centers and offsite balance workload
• E-mail EDI enables carriers without EDI to send EDI status updates via the web
• Can be done on a smart phone
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27. EVENT NOTIFICATION
• Shipment booked
• Booking confirmed
• In gated full at origin/late gate
• Shipment sailed/late sailing
• Documents sent
• Arrived port/late arrival
• U.S. Customs cleared
• U.S. Customs exam hold/release
• U.S. OGA exam hold/release
• Available at destination/late
availability
• Delivered/late delivery
Transit Exception Notifications
• Late gate
• Late sailing
• Late arrival
• Late availability
• Late delivery
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28. OPTIMIZATION
• Java backend ColdFusion user interface • Genetic Algorithm's
• More than 1,000 mileage calls per second • Chipper (continuous solution)
• Production rate structure • Continuous Moves Solver
• Driver scheduling • John Henry’s Hammer
• Modified Vehicle Routing Problem (VRP) • Timeline
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29. IMAGING
Werner Enterprises Imaging System (WEIS)
• Internally developed imaging system
• 11 departments fully automated
• 45,000 new images per day
• Over 220 million images in DB2
• Retrieval time is less than 1 second
• Average image size is 35K (200dpi Tiff G4 image)
Savings
• A single 4 drawer file cabinet = 50,000 pages
• 4,400 paper file cabinets worth of images
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30. MOBILE
• Dedicated mobile development team
• Internal iPad Executive KPI App
• Werner News App (Coming Soon!)
• Phone Gap
• Responsive Design
• Challenges with screen size, resolution, browsers…
• Werner is not BYOD
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31. BUSINESS INTELLIGENCE
• Enterprise Data warehouse DB2
• SQL Server
• SQL Server Reporting Services
• SQL Server Analysis Services
• Data Cubes
• 10 years ago reporting was monthly in order to support a
pat on the back, bonus, or need to improve.
• 5 years ago weekly reports were the standard
• Now reporting needs to be real time
• Users also like self service
• Visualization is also key to alerting users
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32. GIS
Team
4 Developers (2 US, 2 China)
Software
ESRI Server
ESRI Desktop
Used Google for a short trial
Impact
Geocode every shipment record
Customer Maps & Analysis
Road closure event response
iMap 2.0 enterprise application
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33. FREIGHT VISIBILITY
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34. CURRENT TRUCK LOCATIONS
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35. FUTURE TRUCK LOCATIONS
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36. ROUTE VISIBILITY
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37. DETAILED INFORMATION
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38. ALERTS & ACTIONS
Real time alerts can be thrown for a variety of reasons:
Truck not moving when we think it should
Load may be delayed
Truck Out-of-Route
Truck breakdown
Split location coordination
Truck due for preventative maintenance
Actions that could be preformed within the map:
Message driver
Assign load to truck
Assign vendor to breakdown
Message shipper and consignees
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39. WHAT’S NEXT
New user interface
Keyboard Shortcuts
Further integration with
legacy systems
User Profiles
Search History
Saved map state
Embedded documentation and training videos
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40. DEDICATED SERVICES
Analysis and Design Team
• Supply Chain Analysis & Optimization
• Optimization Performance Monitoring & Tuning
• Continuous Process Improvement
• On-Site Customer Analysis
• Rapid Response
• Special Events
• Site Selection
• GIS Maps
Continuous Improvement
• Backhaul Team
• Trainer Teams
• Slip Seats
• Pod Drivers 3 Trucks : 4 Drivers
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41. THE ROI IN SUPPLY CHAIN ENGINEERING
• Transportation Staffing Overhead: 10-30% depending on factors relating
to centralization and degree of current automation.
• Mode Optimization: 3-6%
• Load Optimization: 8-15%
(LTL to multi-stop or pool consolidation)
• Continuous Moves: 2-5%
• Vendor/Supplier Compliance: 6-15 %
(inbound management)
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42. CASE STUDY DOLLAR GENERAL
2011 Annual Revenue = $125.5 million
Length of relationship (Dedicated): 1994 - present
Scope of Work
Challenges
Werner Enterprises operates a
Dedicated fleet with 600 trucks
Solutions
servicing 8 facilities. The fleet Surge demands of the small box
handles inbound and outbound retailer and the cost pressure of
shipments. We deliver to more the recession.
than 7,000 stores per week with
99 percent on-time service. Werner Enterprises provides
additional support for seasonal
surges, ranging from 40 to 120
Werner Enterprises’ TMS trucks on short notice - usually in
manages the shipment execution less than 24 hours.
for Dollar General’s carrier base,
including storing all customer
delivery data for Dollar General’s Werner designed and implemented
entire network. Slip Seat and Trainer Team
solutions, reducing Dollar
General’s cost by more than $10
million annually.
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43. CASE STUDY ANHEUSER-BUSCH
2010 Annual Revenue = $45 million
Length of relationship (Dedicated): 2001 - present
Scope of Work
Challenges
Werner Enterprises operates a
Dedicated fleet of 150 trucks and Solutions
36 person loading/spotting team
servicing the Columbus, Ohio Replace an underperforming, long-
time incumbent at Anheuser- Werner Enterprises worked closely
brewery. with the equipment manufacturers
Busch’s second largest brewery in
conjunction with the design and and Anheuser-Busch to design a
purchase of specialized equipment. lightweight tractor and trailer
solution.
Werner Enterprises seamlessly
executed a three phase ramp-up
encompassing the delivery of 150
new tractors and 500 new trailers.
Continuous Improvement:
We increased the backhaul
contribution by more than 90
percent and improved driver
productivity by more than 13
percent, resulting in more than $1
million in annual savings.
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44. CASE STUDY OFFICE MAX
2011 Annual Revenue = $36.3 million
Length of relationship (Dedicated): 2001 - present
Scope of Work
Challenges
Dedicated provider in Solutions
OfficeMax’s three distribution
centers: Store delivery network had
grown without review for
Hazelton, PA several years. As stores Reallocate store network to
McCalla, AL were opened they were current DC’s
Las Vegas, NV assigned delivery days based Reduced 102,500 miles
on personal preference or weekly
neighbor stores.
Estimated $185,000 weekly
savings
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45. Thank You
Tom Clements
Clements@WernerVAS.com
For more information visit: www.werner.com
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