The old complaints about track-and-trace capabilities – or the lack of them – persist in vehicle logistics, but progress is being made in last-mile visibility and electronic proof of delivery. 

At the Hyundai group logistics specialist Glovis Europe, work is well under way on a new IT system. Its role? To provide better visibility into the flow of Hyundai and Kia vehicles as they journey from ports of entry and Slovakian and Czech factories to dealer compounds right across Europe. “Today, we have to integrate information that comes from individual systems and links in the supply chain,” says Frank Schnelle, Glovis Europe’s general manager for development and planning. “But now, our goal is to harmonise and integrate the various information flows into one, providing seamless end-to-end visibility and early warning of bottlenecks.”

be ‘live’ in Austria as you read these words, with Germany and Benelux adopting it shortly afterwards. The rest of Europe will be implemented on a country-by-country basis over the next two years, adds Schnelle.

“We at Glovis will be using it, and so will our clients in the national sales companies, as well as our suppliers and contractors,” he explains. “Historically, Hyundai has been fairly decentralised, but today there’s a new appreciation of the value of centralised data and of the detailed picture of the flow of vehicles that it can provide.”

That said, he adds, the system hasn’t been developed from scratch. It is an extension of an existing system – operating under the same name – which provided a more limited insight into visibility, covering only the vehicle flows from plants and ports to the compounds of the relevant national sales entities.

While valuable, the extension of the system has necessitated making compromises. Though an original ambition had been to provide visibility into the progress of the final transporter journey to the dealer, such a granular level of detail has been shelved for the time being.

“For our purposes today, it’s enough to know that the vehicle is on the transporter,” notes Schnelle. “As long as everything is going to plan, we don’t need to know if the truck is 200km from the dealer or just 200 metres away – that level of visibility might at some point add value, but today we just don’t know that.”

What should track and trace look like?
the finished vehicle logistics industry’s broader stance on what is loosely called ‘track-and-trace’ – in other words, the ability to monitor the end-to-end flow of vehicles from origin to destination. What appears at first glance to be a fairly simple aspiration soon turns out to reveal deceptive levels of complexity.

There are a number of important, albeit repeating questions on this subject. For instance, how can track-and-trace be made to deliver a return on investment, and what exactly are the benefits that improved visibility is supposed to deliver? Compared to best practice elsewhere, how advanced are the industry’s track-and-trace capabilities? And what blind spots must still be uncovered? As the industry moves into 2013, what constitutes the ‘state of the art’ in finished vehicle automotive supply chains today, and what can help the industry move forward?

To be sure, these questions aren’t new. A better trackand- trace capability has been an imperative to finished vehicle automotive supply chains for years. And undeniably, significant advances have been made.

But half a world away from Schnelle’s office in Germany, his California-based colleague at Glovis America, Scott Mize – an industry veteran with 22 years’ experience at Mazda – is only too aware of the industry’s shortcomings.

“Best practice certainly isn’t in the automotive industry,” he says. “Look at Fedex or UPS, and you’ll see something that is amazing by automotive standards: you can track shipments by the web, get e-mail alerts, and pretty much see exactly where your shipment is – down to the scanned signature of the person who received the item.

“And how near is the automotive industry to that? Nowhere near.”

Tracking history, not today’s movements
The areas in which the industry’s visibility goes blank are for the most part understandable. The root causes lie in the structure and norms of the vehicle logistics sector, rather than in any lack of a readily available quick fix. Ben Shain, senior manager for vehicle logistics at Nissan North America, suggests that most tracking systems are based on historic transport times rather than those happening in real time.

“Tracking finished vehicles, and being able to estimate an accurate delivery ate to our ealerships, has een a priority at Nissan for many years,” he notes. “ The current level of tracking depends on taking averages for each origin and destination pair for rail, and then adding in a fixed amount for truck delivery. The problem with this is that the railroad transit times can vary greatly: what takes six days this week can take ten days next week, and the system does not adjust fast enough, nor does it take enough history into account.”

Despite these shortcomings, North American rail movements are an area where the industry is arguably relatively advanced. As Mize points out, the rail industry’s own investment in wagon track-and-trace has been adroitly leveraged to deliver very reasonable vehicle location data; at fixed points across the network, wagons are identified as they pass, and a car location message (CLM) is generated.

“We know which VINs are on which railcar so, as the CLMs come back, we can track each vehicle’s progress,” says Mize. “At Glovis, we reckon we do a good job of tracking railcar-based movements, but we don’t have the same level of visibility when it comes to vehicles on trucks. Unlike Fedex or UPS, where drivers return to base each day, a truck may be on a three-day trip, with multiple drop-offs enroute, and only hand in their paperwork on their return. We can’t even phone the truck driver – the carrier has to do that – which makes tracking progress hard work, complicated, and not ideal.”

Getting online
In short, what’s needed to gain true track-and-trace visibility is an end-to-end solution, with no blind spots in which the transfer of a vehicle from one link in the supply chain to another could result in a critical loss of information granularity. The obvious way to build that end-to-end capability is to use the internet, particularly with the use of low-cost smartphones or PDAs.

Mitsubishi Motors Japan, for instance, has engaged global B2B integration giant GXS to develop a cloud-based finished vehicle tracking solution for precisely that purpose. Integrated into the Japanese carmaker’s back-end production and sales systems, the cloud solution provides a global virtual network, allowing 3PL providers and other parties to update the central supply chain visibility solution using a simple-touse ‘web form’.

Chrysler, for its part, has made great strides since supplementing its internally developed EDI-based 1980sera Vista system with specialist web-based vehicle tracking software VinVision, developed by Insight Network Logistics, a subsidiary of the railway company Union Pacific.

Each of Chrysler’s 10 North American assembly plants, 24 haul-away carriers, seven railway operators, and nine vessel operators report into the system, explains Ren Reed, head of finished vehicle logistics operations at Chrysler, adding that a recent expansion of the system into body vendors, retrofit facilities, and ports of entry and exit have included further reporting points into the system.

“Vehicle movement is transparent from assembly production processes right through to the final destination delivery, in near real time,” says Reed. “It allows us to have visibility into all the vehicles in the network, and offers the ability to data mine each plant, terminal, railcar, and vessel that is in the network. And it’s also an extremely useful tool when it’s necessary to track vehicles during projects that require a very granular level of detail, particularly new model launches.”

The big picture
VinVision is not the only such web-based solution in the market. ProAct International has another end-to-end webbased solution, deployed on behalf of carmakers such as BMW. Sovereign Business Integration, meanwhile, offers its web-based Event Management Logistics (EML) solution, in use within Ford’s European finished vehicle logistics operations. Car Delivery Network, another provider, acts as both a road-based vehicle movement sourcing operation and an electronic ‘system of record’.

Such providers have been close enough to the finished vehicle logistics industry for long enough to see that technology on its own – whether the internet, EDI, or auto-ID technologies such as RFID and barcoding – can only go so far in providing a solution to track-and-trace. The structure, practices and transactional norms of the industry must be harnessed to the purpose as well.

Sovereign Business Integration’s managing director Richard Barker, for instance, decries parallels with carriers such as Fedex or UPS as overly simplistic.

“Fedex and UPS have their own people, their own trucks, and their own aircraft,” he says. “Broadly speaking, if it moves or touches a consignment, they own it. In finished vehicle logistics, moving a car involves different railways, trucking companies, shipping lines and service providers; each link is a different entity and there’s very little incentive for them to work together.”

And even if there was such an incentive, says Garth Parker, chairman of ProAct International, the industry’s present modus operandi is to optimise separate links in the chain, rather than the chain itself. Compounding the problem, he asserts, the optimisation that is attempted tends to happen with systems based around different technologies and different standards, none of which are designed to be bolted together or to pass information to each other.

What’s more, adds Mike Thorby, chief technology officer at Car Delivery Network, the industry’s approach to metrics, data granularity and scheduling is far from the sort of level of precision that are seen in other industries – a function, perhaps, of a historical focus on cost rather than information provision.

“Typically, final-mile, delivery-to-dealer service level agreements are three to five days, which is useless to both the dealer and the end customer,” Thorby argues. “One month out from delivery, a specified delivery week is probably acceptable – but a week out, and customers are looking for a delivery day, and dealers are looking for a delivery time.”

But the real problem, agree all three executives, is that reallife implementations of track-and-trace are in many ways misdirected, with the focus typically being on pinpointing location, rather than on placing that location in a broader context. Collectively, too, their frustration is also shared, for despite offering solutions to take the industry forward, the absence of end-to-end supply chain responsibility provides little incentive for end-to-end supply chain improvement.

“Simple track-and-trace is just too passive,” says ProAct’s Parker. “The starting point should be a baseline plan, in order to measure that present location against what it ought to be. At each stage in the process, the reference point should be a plan for when the vehicle should have reached that stage – and then a measure of progress and deviations from the plan, constantly updated in real time.”

Sovereign’s Barker concurs.“There’s a lot of talk about optimised supply chains, but you can’t optimise what you can’t see,” he says. “The potential is huge – easily hundreds of millions of dollars, when you look at the volumes of vehicles in transit – but there are few signs of the opportunity being grasped. But until it is grasped, the industry will continue to manage its problems, not its process.”

Finding the final mile
There are some encouraging signs that the message is getting across. Car Delivery Network, for instance, has secured pilot implementations with two major carmakers in North America, including Chrysler, which was attracted by its ability to shine a light into the most pressing blind spot – the ‘final mile’ delivery to dealer.

Nissan North America’s Shain also speaks promisingly of a recently implemented system that should provide a higher degree of delivery forecast accuracy.

“It gives us the ability to track individual vehicles from the time they leave the plant, regardless of location, to the time they arrive at the local dealership,” he explains. “Utilising prior average times between segments, we will be able to project a more accurate ETA to the dealer. The system will also alert us whenever one leg of a transport takes more than the average time, so that we can investigate and determine the root causes.”

Better still, he adds, Nissan is addressing the hitherto intractable question of the precise return on investment (ROI) of track and trace, which would transform the added cost of providing visibility into a bottom-line benefit.

“In the near future, the customer might receive e-mails from the dealership telling them: ‘Your vehicle has left the plant by train, and is due for delivery next Tuesday. Would you like to add an extended warranty? What about floor mats?’” Shain enthuses. “Keeping the customer up to date and excited about their purchase is important and being able to deliver on expectations is paramount.”

Logistics specialist Gefco – soon to be majority-owned by Russian Railways – has also made progress in illuminating the ‘final mile’ blind spot, as well as a way to translate that enhanced visibility into a hard cash ROI, explains Bertrand de Techtermann, automotive director of Gefco’s UK operations.

The company has invested in a telematics-based vehicle tracking system which not only tracks each truck’s location, he relates, but also how the vehicle is being driven in relation to speed, fuel economy, braking and acceleration rates, helping the company to monitor vehicle efficiency and economy.

The system is also linked to the UK’s national Highway Agency, so drivers can be instantly alerted to roadworks and accidents affecting journey speed, allowing them to be quickly redirected to avoid delays.

“Equally, if a driver is running late because delays cannot be avoided, the tracking system will pick this up and the customer service team in the office can then call through to the client directly, to inform them of delay and the expected time of arrival,” Techtermann says.

The search for actual ROI is resulting in an increasingly focused spotlight being shone on arguably the industry’s biggest blind spot of all – knowing the precise instance and circumstances, including any vehicle damage, of the handover from carrier to dealer.

Paperless proof delivery
Dubbed ‘electronic proof of delivery’ (ePOD), the idea is to crystallise the precise point of handover, enabling title of ownership and insurance responsibilities to be re-assigned immediately, rather than after the driver returns to base, which is potentially several days afterwards. Throw in the ability to photograph the vehicle at point of handover, pinpointing any damage, and the prospect seems even more alluring.

But is it a real one? Chris Martins, a 20-year automotive logistics veteran and managing director of vehicle transporter company – which handles vehicle deliveries for a number of European carmakers and logistics carriers including GM and Gefco – is in no doubt. The company has implemented an ePOD system from OBS Logistics: running on Motorola ES400 handheld devices, it combines proof of delivery capabilities with photography, job scheduling and GPS-based location tracking and time-of-arrival prediction.

“Managing paperwork is time consuming, and can be frustrating,” he says. “For example, we may have a truck travelling from Slovenia to Moscow, and to get all the paperwork back from the trip could take a week or more. We wanted to be able to improve on this with an electronic system that provides proof of delivery and computerised documentation that we can deliver to our customers instantly.”

“The ePOD technology comes into its own when you have complex paperwork to complete on-site, such as a damage inspection and full-vehicle walkaround,” adds Matthew Turner, senior business consultant at OBS Logistics. “It provides a standard, structured way for drivers to perform a delivery, and a way of sending back photographs and delivery confirmations.”

confirmations.” But is this a sign of things to come, or an isolated experiment? The industry’s present interest in ePOD is undoubted – as is its desire to emulate best practice as demonstrated by Fedex, UPS and similar carriers – but the bigger picture remains unchanged; with the industry’s fragmented supply chains, ePOD is of little use without end-to-end connectivity between carmaker and dealer. No handheld device or smartphone can provide that on its own.