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Ensuring RFID Optimization and Bottom Line Payoff

RFID Optimization

Whether a business leaped at the opportunity to become one of the first suppliers with RFID tagged products or now finds itself currently being mandated to employ the technology, the implementation costs and the potential rewards are the same.

To maximize the benefits of RFID, it is critical to view its capability to drive business process improvement, increase supply chain efficiency and ultimately improve bottom line results.

From this perspective, the upfront capital costs for hardware, engineering consulting costs, opportunity costs, ongoing cost of tags and, in a manual environment, labor associated with the RFID tagging of products are deemed a necessary investment.

Rather than merely RFID tagging products to satisfy the requirements of their largest customers, companies can move from seeing RFID deployment as just the cost of doing business to an opportunity to enhance productivity and profitability.

Understanding the impact of data collection and tracking as well as data integration is essential to RFID optimization.

Data Collection and Tracking

The information gleaned out of the data collection is the cornerstone of RFID’s value.

In most supply chain applications, the value comes not only from data collected within a single company but also from the data collected by supply chain partners and shared via supply chain communication portals or retail portals such as “Retail Link”.

Internally, companies can collect data at multiple chokepoints to, among other things, make determinations about process or product flow improvements or validate proper shipment components and quantities.

External data can indicate problems with either too much or too little inventory in the supply chain, product idle time that can be removed from the system or even problems associated with out of stock conditions at the retailer.

By gathering the data (internal and external) and turning that data into information, companies can begin to make supply chain decisions that can positively impact how business is done.

Many companies are now utilizing the RFID data as a Proof of Delivery (POD), which is a very accurate tracking and tracing method since the RFID serialization is unique to a product, load or pallet.

Data Integration

The data integration component involves the physical connection of the collected data into the host information system (i.e. ERP, WMS, etc). Data integration and how the data is to be utilized is the most important part of any RFID implementation.

Where the data is captured, how it is stored and what is parsed or presented back to the host systems will define the success of the deployment. In most data collection applications today, data is captured and sent back to host systems using barcode technologies.

RFID data is really no different in the way it is captured and processed; the difference is that the data is in an electronic format as opposed to barcode format and does not require human intervention or line of sight. Think of RFID as an electronic barcode that allows for additional data storage on the tag and, in many situations, can be modified or updated as needed. This is a huge advantage over traditional barcodes.

Deriving Value from Data

The pièce de résistance is that RFID implementation, done right, results in real-life, bottom- line value. This value flows from the data collection and data integration components into the decision-making process that ultimately leads to the implementation of ideas, processes or controls that bring value to the organization.

Many companies that started early with RFID are now beginning to realize the benefits of the additional data and information being provided via the RFID system. In many cases, suppliers are seeing an internal benefit of using tagged RFID products. They are finding ways to maximize the technology and benefit from the internal visibility the tagged products provide to their systems.

For example, one supplier has been able to improve its accounts receivable (AR) process by 72 hours just by having the electronic proof-of-delivery (e-POD) sent when the tagged products are received at their customer’s warehouse. This faster AR process has increased the company’s bottom line due to the interest saved on improving its cash flow. This benefit was realized during the installation and the savings actually paid for the installation of the RFID infrastructure. This is just one of the ways the deployment of RFID technology can be justified.

In another installation, a large retail supplier discovered that the automated process of capturing, via RFID, the unique carton and pallet IDs led to a reduction of mis-shipped products by alerting the shipper when products were being loaded onto the wrong trailer.

Additionally, short and overage situations, are now caught prior to releasing the trailer to the customer and because of a time and date trail that includes a “DNA” for each carton and pallet, discrepancies are much easier to resolve. The shipping data, or ASN information, has allowed for a quicker turnaround on accounts payable due to the electronic interface and real-time accuracy of the individual items.

In the above example, the company realized a two percent increase in payments that turned its cash flow 10 days earlier on $350 million in business. The RFID deployment has also provided additional value that was not even factored into the analysis prior to implementing the system.

If a company’s RFID system today is still the original “slap and ship” system adopted to simply satisfy the requirements of a supply chain partner, it may as well be slapping dollar bills onto those cartons and pallets. All the potential value of RFID is completely lost and the organization has zero opportunity to realize any economic value from the information that is generated.

Only through the collection of internal and external data, and transformation of that data into information can businesses begin to make decisions that positively impact supply chain performance and lead to the RFID deployment yielding significant bottom-line results.

Related Article: Leading Apparel Brand UNTUCKit Optimizes Inventory Through RFID

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How SMARTRAC Technology Helped Make the 2018 World Cup Ball One of the Most Innovative Ever

This year’s World Cup ball, the Telstar 18, is a reimagining of the first adidas FIFA World Cup match ball, the Telstar, from the 1970 tournament in Mexico.

It’s a neat idea. And there’s another innovative feature hiding under the surface of this year’s official World Cup ball.

Embedded into the skin of the Telstar 18 is a near field communication tag better known as an NFC tag (specifically, Smartrac’s Circus Flex tag).

So when you tap on the ball with your smartphone, you gain instant access to a whole range of exclusive content.

The result is the most innovative World Cup ball ever created – one you can play and interact with.

Each ball generates a unique identifier, unlocking exclusive content and information for the consumer.

The personalized and location-aware experience displays specific details of each ball and provides access to challenges which consumers can enter in the run-up to the 2018 World Cup.

Pushing the limits of consumer experience and product design

Roland Rommler, Category Director Football Hardware at adidas, said about the ball:

“The original Telstar is one of the most iconic soccer balls of all time and one which changed soccer design forever, so developing the Telstar 18 while staying true to the original model was a really exciting challenge for us. The new panel structure and inclusion of an NFC chip has taken soccer innovation and design to a new level and offers both consumers and players a completely new experience.”

The Telstar 18 is not the first smart product equipped with an NFC tag.

It’s something adidas consumers have already experienced, for example, in the UltraBOOST shoes, as well as the SPEEDFACTORY range.

“We‘ve come from embedding NFC tags in a few thousand shoes to mass-production schemes, and from delivering simple Internet links to providing exclusive, dynamic and secure interactions in the real world – in digital form,” said Christian Uhl, CEO at SMARTRAC.

A personalized consumer experience with NFC tags

The most impressive thing about digitizing products is that brands can now deliver personalized experiences to every one of the consumers of those products.

With NFC tags embedded in the product, fans are getting a whole lot more than just the physical item.

But equally, companies get access to a whole new channel that offers them a lot of value too. It is a channel that the brand owns, connecting them directly to their consumers. But it’s also a way for them to make sure they can keep giving their consumers more and more value.

At a time when every edge counts, NFC-based solutions offer brands the opportunity to push the limits of the fan experience at scale.

Learn more about NFC tags – and Smart Cosmos Experiences, the solution that powers adidas’ innovative consumer experiences. Or get in touch with SMARTRAC and they can talk about how your business can start innovating with digitized products.

Image Credit: adidas

Related Article: Ensuring RFID Optimization and Bottom Line Payoff

Ensuring RFID Optimization and Bottom Line Payoff

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The IBM AI Technology behind Wimbledon 2018

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DHL launches Global Trade Barometer

Global express delivery and logistics service provider DHL rolled out the inaugural edition of its Global Trade Barometer, which it said is an early indicator for the current state and future development of global trade.

The company said that this will be published quarterly and is the result of a partnership between DHL and Accenture, whom will provide data modeling and predictive analytics to forecast future trends for DHL.

DHL explained that the Global Trade Barometer is based on import and export data for a number of intermediate and early-cycle commodities that serve as the basis for further industrial production such as brand labels for clothes, bumpers for cars or touch screens for mobile devices. And it noted that sources are aggregated market data from air and containerized ocean freight in seven countries that represent more than 75 percent of world trade. The barometer leverages artificial intelligence and statistical models to compress the data into a single index value that is published on both a global and individual level for the seven countries it evaluates.

The reading for the first edition of the Global Trade Barometer is 64. This figure marks the weighted average of the current growth and next two months of global trade, with a reading of 50 or higher indicating a positive development and a reading below 50 indicating a global trade decline. The reading of 64, said DHL, is slightly below the values calculated for previous months, indicating global trade is in expansion mode, while growth is losing momentum, due to a weaker outlook for Chinese and Japanese trade that is partially offset by gains in India, South Korea, and Great Britain.

“We have been working on the Global Trade Barometer for around three years,” said Tim Scharwath, CEO of DHL Global Forwarding, in an interview. “During this period, with the help of Accenture, we have developed the model, applied machine learning to identify the intermediate commodities with a leading predictive quality and a high correlation with future movements in actual trade and created and calibrated the regression model that produces the Barometer index. The reason we decided to roll out the Global Trade Barometer was that we recognized that DHL – with the support of Accenture and its Seabury Consulting arm – was able to take advantage of new developments in technology and digitalization (specifically, AI and machine learning) to help our customers by developing a predictive model and using our expertise to interpret the data and provide insights on what the data meant for their supply chain planning and management.”

As DHL began to see how effective the Barometer was, Scharwath said DHL also saw additional potential for others (for example, financial institutions) to use the Barometer in their models and planning. Additionally, he noted it can help DHL in its own resource and capacity planning, as well as commercial activities like offering solutions to particular sectors, based on the Barometer’s predictions for the coming quarter.

Addressing the Barometer’s methodology, Scharwath explained it looks at around 1.5 million commodities and intermediate products with a leading quality like clothing labels (which can predict trade in fashion items), car bumpers (which can predict future car exports) and mobile phone parts. It uses machine learning to look at these variables and their correlation with trade trends and to identify those with the highest predictive quality and their weighting. It then selects the top 100 individual predictors to each of 150 industry verticals and applies a random forest algorithm, multivariate regression and time series analysis to find the top 10 and weight them to produce a single index figure.

“There are numerous benefits that supply chain stakeholders can derive, including better planning capacity and allocation, benchmarking their own trade forecasts against the industry average, identifying new business opportunities (i.e. in sectors and on trade lanes with strong performance forecasts), understanding trade lane fluctuations, and spotting potential downturns in demand (for example, in order to adapt their supply chain strategies, reduce inventory levels etc.),” said Scharwath. “For DHL, it may help us to adopt specific pricing strategies, strengthen our negotiating position with carriers on certain lanes, more efficiently plan our air freight and ocean freight volume allocation etc. to take advantage of trends we see.”

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Tariffs Present Different Supply Chain Challenges for Shippers

Well, that time is now officially here, with the White House saying it’s moving forward with a 25% tariff on $50 billion of goods imported from China, as well as focusing on: protecting domestic property and intellectual property; stopping noneconomic transfers of industrially significant technology and intellectual property to China; and enhancing access to the Chinese market.

So instead of the “what if” scenarios that had been floated and discussed, we are instead in a “what now” scenario. And, to be sure, that scenario is fairly open-ended at this point.

For nearly 18 months, or even longer, there have been steady gains in United States-bound imports from China, with much of it due to the pending, now actual, tariffs, which have been by viewed by many as protectionist measures.

What happens now remains to be seen on myriad fronts, but one thing for certain is that these new tariffs are not catching anyone by surprise, as the very real possibility of them taking effect has been really going back to early March when the White House first floated the possibility.

Much of what is driving the White House’s tariff endgame is the need to compete on a global basis, which requires the U.S. being able to grow its global exports, according to Walter Kemmsies, Managing Director, Economist and Chief Strategist for JLL’s U.S. Ports, Airports, and Global Infrastructure Group.

“It is important, as the U.S. [collectively] is not the youngest or most vibrant consumer group in the world,” Kemmsies said.

“While there are a lot of millennials out there, it is going to be a while before they become ‘hardcore’ consumers like their parents are. If you are really going to grow, you want to tie your economy to where the consumers are spending and the consumer is global and spending on things like food, where we are really well positioned, clothing, automobiles, and appliances. We are also the world’s most efficient plastics producer….we need to leave the markets open for that and also to compete on an equal basis. In the end, what the U.S. really is asking the world is to ‘let our companies compete with yours on an equal basis.’”

And in order for global shippers to weather whatever tariff storms that may be coming, taking a longer view of trade beyond just the U.S. and China is a good step to take.

That requires looking into setting up production and distribution operations in places like Vietnam and India, as well as parts of Africa, which Kemmsies said are emerging.

“If you are going to operate as a global company, you need to make your decisions that way, too,” he noted.

“When you look across certain products, you can see how bad some supply chains are actually managed if they are not. It makes no sense not to truly diversify globally. If you source stuff in one country and sell it in another, you are extremely vulnerable.”

What’s more, even if these tariffs do not lay out the possibility of a full-on trade war, Kemmsies said there is no benefit for shippers to be so concentrated on one country, even though China has the capacity and manpower to meet the needs of many shippers. But for products and designs that can change on the fly, he said China is not optimal, as it is more large scale-focused.

While Kemmsies stresses shippers look beyond China, Ben Hackett, founder of maritime shipping consultancy Hackett Associates, made the case that implementing tariffs will result in retaliation from major U.S. trading partners, calling it a “shoot yourself in the foot” strategy.

Panjiva research director Chris Rogers

“In a world with no President Trump and President Xi shouting at each other, we are feeling pretty optimistic about things”Chris Rogers, Research Director, Panjiva

“How is that good for America? If the steep tariffs are put into place expect higher producer costs and lower exports,” said Hackett. “Again, neither good for the American economy nor the consumer. Nothing is certain anymore in Washington, D.C.”

And Panjiva research director Chris Rogers noted that despite the back and forth between the U.S. and China regarding tariffs and related protectionist measures, things overall are in a pretty decent place, as it relates to global trade.

“Trade fundamentals remain solid,” explained Rogers.

“In a world with no President Trump and President Xi shouting at each other, we are feeling pretty optimistic about things. Consumer confidence and business confidence are down a little bit but still remain at high levels. Most products [categories] are seeing solid growth, but there remains an overhanging worry about tariffs finally arriving, with the ones for metals already intact. But once others kick in, there could be a sense of the wheels coming off the wagon.”

And he also noted that there has recently been a step back in shipments from China that is not directly related to tariffs on shipments from China being implemented but rather to concerns that tariffs ‘might’ be implemented.

“One could argue that the mixture of nervousness, coupled with sensible supply chain strategies, could lead to less growth,” he said.

“But things are a long ways from not growing as much as in the past, as opposed to [shipment levels] actually falling. It is possibly a sign of more to come, with signs of a summer slowdown, much like what has occurred over the past two years.”

It’s a brave new trade world now, and it looks like it will be quite the ride.

Related Article: Trade Relations are Building a Bigger Wall Between US & China

Trade Relations are Building a Bigger Wall Between US & China

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Global Apparel Leader Achieves Swift Footing In and Out of China
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The Keys to Effective China Trade Operations
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For The First Time Amazon Prime Air Cargo Planes Are Ready For Takeoff

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Amazon’s Real-Time Map Tracking Package Delivery App Available to All US Customers

Amazon Map Tracker, a feature the company quietly introduced last month, has started expanding to more users in the US, as noted by Android Police and confirmed by CNET.

The feature gives you a real-time map of your Amazon package delivery as it’s in transit, letting you watch a dot on the screen similar to monitoring an incoming Uber or Lyft driver. It was given a soft launch last year.

The feature is great for anyone who obsesses over the exact moment an Amazon delivery is slated to arrive.

It’s also handy because it allows you to pop out for an errand by showing how many stops or deliveries the driver will make before reaching you.

“The Amazon Map Tracking feature is another delivery innovation we are working on to improve convenience for our customers and provide them greater visibility into their deliveries,” Amazon spokeswoman Alana Broadbent told CNET.

“The Amazon Map Tracking feature is another delivery innovation we are working on to improve convenience for our customers and provide them greater visibility into their deliveries.”

Caution: FedEx, UPS, and USPS packages aren’t eligible, only deliveries handled by Amazon logistics will get the live tracking.

Business Insider says you’ll get access to live tracking when your driver only has fewer than 10 stops left before reaching your location.

It shows you their estimated time of arrival and how many deliveries they have left before they arrive.

Since you can see the driver’s every movement, it raises concerns about security and privacy – someone could order an item just to see which houses near them have gotten packages they could steal off porches.

If you’re out of the house and want to make sure you’re there to receive your package or that the driver truly made a stop at your place, it sounds like a very useful tool

In other news, Amazon is banning shoppers who return items too often. As reported by CNET, Amazon’s flexible return policy may not be as risk-free as you think.

The company bans shoppers for violations, which include returning items too often, according to The Wall Street Journal. Some users aren’t told what they did wrong.

Amazon boasts free and easy returns for many of its items, which has pushed many brick-and-mortar stores to offer the same policies as they struggle to compete with the e-commerce giant. But it turns out Amazon’s return policies may come at a price.

RetailWire reported that, according to the National Retail Federation, 11 percent of sales are returned, and 11 percent of those are fraudulent. If I’m doing my math correctly, that means that a little over 1 percent of customers are making excessive or fraudulent returns.

Forbes reports that there is a cost to these fraudulent returns. Any company that sells anything knows that returns, legitimate or not, impact the bottom line. The price of whatever is sold is determined by many factors such as the cost to manufacture, the cost of shipping, the cost of employees and much more – including the cost of returns. Mitigating the fraudulent returns can help the bottom line. Companies that have a low-price business model can keep prices low if they can eliminate fraud.

What Amazon has done is interesting. Rather than make a blanket, across-the-board decision with a more stringent return policy, it has opted to go after the abusers.

In other words, it is not going to punish all of its customers for the sins of a very few.

Related: The Rewards of Getting Returns and Reverse Logistics Right

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Study Shows CFOs Lack Visibility Into Their Organization’s Business Spend Management

A study of more than 500 chief financial officers (CFOs) and senior finance executives conducted by The Economist Intelligence Unit (EIU), commissioned by Coupa Software, reveals that more than 60 percent of CFOs lack complete visibility into the transactions within their organizations.

In addition, 76 percent think leveraging new technologies or improving processes would enable their organizations to work better with other functions to execute corporate finance strategy.

The study, titled, “The Strategic CFO in a Rapidly Changing World,” takes an in-depth look at how CFOs and senior finance professionals are responding in a rapidly evolving world where new technologies, uncertainty, and emerging threats abound.

Qualitative interviews were completed with CFOs from Ally Financial, Driftwood Acquisitions and Development, Hays, Micron Technologies, and Zendesk.

“The results of this study are not surprising – visibility remains a huge challenge for CFOs in today’s dynamic and ever-evolving business environment,” said Rob Bernshteyn, chief executive officer, Coupa.

“Visibility remains a huge challenge for CFOs in today’s dynamic and ever-evolving business environment, and it’s critical that CFOs adopt a cloud-based strategy that enables them to have visibility and control over their spend to make more strategic and informed business decisions.”

Additional findings include:

  • 67 percent see process or technology improvement as critical to managing risk.
  • To better manage costs, 60 percent believe process or technology improvement is critical.
  • Breaking down silos and improving cross-department collaboration is key. Nearly 60 percent who assess their organizations as most able to manage risk, cost and capital also describe their companies as collaborative.

Automation and cloud computing are the top two emerging technologies that finance executives most expect to help execute corporate finance strategy.

Business performance risk is the number one threat with the potential to impact the financial position of those organizations surveyed.

A cloud platform for business spend management, Coupa helps customers such as Airbus, BAE Systems, Lululemon, and Salesforce maximize their spend under management, achieve significant cost savings, and drive profitability.

Survey Methodology
The survey, commissioned by The Economist Intelligence Unit includes responses from 507 CFOs and finance executives across industries and located in the US, UK, France, and Germany. 75 percent of respondents are chief financial officers (CFOs) and 25 percent are corporate finance professionals who are at the vice president-level or above.

See How Much Coupa Can Save You
Savings. One of the most critical strategic objectives in Spend Management today. From day one with Coupa, we drive you to savings. First by establishing specific KPIs that define success. Then by getting you live faster than you’ve ever experienced with enterprise software.

Download the 2018 Benchmark Report: 12 Ways to Measure Business Spend Management Success

To see what you could save in seconds, just complete the form and hit ‘Calculate My Savings.’

How Strategic CFOs Gain Control with Business Spend Management

How Strategic CFOs Gain Control with Business Spend Management

The challenges addressed in the EIU Report, “The Strategic CFO in a Rapidly Changing World,” are at the heart of modern Business Spend Management (BSM).

As businesses grapple with global economic uncertainty, an increasingly technology-driven world, changing consumer preferences and other factors that affect corporate performance, CFOs have an opportunity to take on a more strategic role and guide their companies to success.

Providing CFOs a single point of control for managing business policies and processes for all spend – whether it’s a pre-approved requisition against a contract, a post-approved business expense report, or an un-approved non-backed invoice – BSM offers finance leaders an easy way to gain control of all of their spend.

Download the report to learn how CFOs are responding in a rapidly evolving world where new technologies, uncertainty, and emerging threats abound. The report also includes five qualitative interviews with the CFOs from Ally Financial, Driftwood Acquisitions and Development, Hays, Micron Technologies, and Zendesk.

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Wabtec & GE Transportation to Merge, Creating Global Leader for Rail, Services and Software

Wabtec Corporation has entered into a definitive agreement to combine with GE Transportation, a unit of General Electric Company.

The combination will make Wabtec a Fortune 500, global transportation leader in rail equipment, software, and services, with operations in more than 50 countries.

The deal is the biggest to be inked thus far by GE Chief Executive John Flannery since he announced a major overhaul of the U.S. industrial conglomerate late last year.

Under the agreement, which has been approved by the Boards of Directors of Wabtec and GE, GE will receive $2.9 billion in cash at closing and GE and its shareholders will receive a 50.1% ownership interest in the combined company, with Wabtec shareholders retaining 49.9% of the combined company.

The transaction is expected to be tax-free to the companies’ respective shareholders.

The combination will bring together two global leaders in rail equipment, services, and software, combining GE Transportation, a global digital industrial leader, and supplier to the rail, mining, marine, stationary power and drilling industries, with Wabtec’s broad range of freight, transit and electronics solutions.

Wabtec and GE shareholders will have ownership in a combined company with significantly expanded margins, a highly attractive growth profile based on an improved business mix, expanded global reach, and faster innovation in key growth areas.

Key Strategic Benefits

The combination is expected to:

  • Drive increased value for shareholders: With approximately $8 billion in combined revenues and a large global installed base, the combined company will have a leading position in key freight rail and transit geographies worldwide and will be well-positioned to serve customers as industry demand continues to improve. Investors are expected to benefit through ownership of a stronger, more diverse business better positioned to perform through the cycle, with expected annual double-digit EPS growth and total run-rate synergies of about $250 million estimated to be achieved by 2022. Furthermore, the transaction will facilitate a tax step-up with an NPV of approximately $1.1 billion of net tax benefit accruing to the combined company.
  • Create a leading equipment, aftermarket services, and digital solutions provider across the transportation ecosystem: From factory to the final destination – and every point in-between – the combined company will have the capabilities to accelerate lifecycle solutions for the transportation industry and unlock significant productivity for customers by improving interoperability, efficiency, and competitiveness.
  • Capitalize on digital/electronic technologies to develop autonomous capabilities: Bringing together GE Transportation’s digital solutions with Wabtec’s electronic systems is expected to drive the advancement and implementation of technology solutions to improve safety, efficiency and productivity for the transportation industry. This combination will create a compelling offering to meet the industry’s rapidly growing demand for rail performance, with the potential to unlock billions in annual savings across freight rail for customers and operators.
  • Generate growth opportunities through the extensive installed base and attractive global footprint: The combined company will be a leading global freight and transit rail provider with more than 23,000 locomotives in its global installed base and content on virtually all locomotives and freight cars in North America, creating significant opportunities for aftermarket parts and services in key regions around the world.

Effective immediately, Wabtec Chairman Albert J. Neupaver has been re-appointed executive chairman of the company, while Raymond T. Betler remains Wabtec’s president and CEO. Following the completion of the transaction, Stéphane Rambaud-Measson will become president and CEO of Wabtec’s Transit Segment; and Rafael Santana, president and CEO of GE Transportation, will become president and CEO of Wabtec’s Freight Segment.

Betler said: “Wabtec and GE Transportation are global industry leaders and we believe that together we have a unique opportunity to drive tremendous growth in 2019 and beyond as the industry continues to improve. By bringing together our highly complementary strengths we are confident that this transformational combination will create value for both Wabtec and GE shareholders, innovative solutions for our customers, and new outlets for long-term career growth for our employees. Our two companies have more than 250 years of rail industry heritage, and our shared focus on safety, reliability, quality, and customer relationships will enable a smooth integration.”

Santana said: “The combination of our two strong brands and remarkable people is an excellent fit that will create an organization well-positioned to accelerate the future of transportation. Together, we can expand our global reach, strengthen our market capabilities and lead digital innovation across the transportation industry. We are seeing growth in rail traffic and recent promising orders for new and modernized locomotives from North American Class I, Shortlines and international railroads, and are confident in the compelling long-term opportunities and synergies before us.”

About Wabtec
Wabtec Corporation is a leading global provider of equipment, systems and value-added services for transit and freight rail.  Through its subsidiaries, the company manufactures a range of products for locomotives, freight cars, and passenger transit vehicles. The company also builds new switcher and commuter locomotives and provides aftermarket services. The company has roughly 18,000 employees and facilities located throughout the world. For the fiscal year ending December 31, 2017, Wabtec generated approximately $3.9 billion in revenue and $504 million in adjusted EBIT (approximately 13% margin).

About GE Transportation
GE Transportation helps move the world and improve the world, as a global technology leader and supplier of equipment, services and digital solutions to the rail, mining, marine, stationary power and drilling industries. GE Transportation’s innovations help customers deliver goods and services with greater speed and savings using advanced manufacturing techniques and connected machines. The company employs approximately 9,000 employees worldwide. GE Transportation has a backlog of roughly $18 billion, including approximately 1,800 new locomotives and roughly 1,000 locomotive modernized units. For the fiscal year ending December 31, 2017, GE Transportation generated approximately $3.9 billion in revenue and $701 million in adjusted EBIT (approximately 18% margin).

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5 Answers to 5 Big Transportation & Logistics Questions

The Changing State of Logistics

The logistics industry is in a rapid state of change and advancement, and its sophistication and development are a work in progress.

It seems like every day and every week a new value proposition comes along that continues to shape the industry.

This changing environment, particularly ongoing technology trends, brings up some fundamental questions worth pondering.

Being somewhat philosophic, the answers will change as new innovations, ideas, processes, and technology make further inroads.

Here are 5 big questions that are worth looking into.

1. Logistics technology startups seem to emerge daily, will these transportation disruptors succeed?

“Disruptors” is the new moniker for innovators in the contemporary digital world. They often seem to come from nowhere and bring a shattering business model that either succeeds through the roof or flops.

Success for a disruptor, regardless of industry, comes down to one truth-telling attribute: value.

Uber was a successful disruptor with their rideshare efforts because there was underutilized cars/capacity. However, when they tried to enter the freight market, they have not been so successful. Uber Freight is trying to change the space without adding any real value to the market.

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There are not underutilized trucks or drivers sitting idle. Digital freight-matching platforms (like Uber Freight, among others) have almost zero adoption. In some transportation surveys, they represented a paltry .02 percent of prevailing freight volume.

Disruptors, however, aren’t bad for logistics and transportation. Disruptors that are enabling other logistics companies to be more efficient are the ones who are proving successful.

This includes businesses like project44 and Descartes and cloud-based SaaS and on-premise software applications like Transportation Management Systems (TMS), Warehouse Management Systems (WMS), and others. They represent true blue technology innovations that have a valuable place in the supply chain and are making stakeholders more efficient and profitable.

When disruptors bring value, they succeed. The focus should be on tangible impacts, not just digitization for the sake of technology adoption.

2. Will electronic logging devices impact safety in trucking?

Electronic logging device (ELD) implementation has already shown major impacts on transit times. This means there were more drivers fudging HOS numbers than initially suspected. But with a bit of patience and time, wages will increase to meet HOS, and drivers will no longer feel the need to work overtime to make ends meet.

But to answer the question, yes, ELDs will certainly improve transportation safety. Much math and science were involved in the research and safety studies that supported the adoption of ELDs. The hours of service (HOS) regulations have merit. If followed, they should lead to safer roads.

In time, their merits will be seen in improved safety records as well as a means of objectively recording driving hours.

3. Will self-driving vehicles improve safety and become a reality in the trucking industry?

There is so much heart and soul, as well as capital, invested in the success of autonomous vehicles. But we are a long way from driverless semi trucks becoming a reality.

In fact, all the chatter about achieving completely autonomous vehicles could be harmful to the overall effort and underlying cause (overcoming driver shortages).

A better approach is to focus efforts on incremental change and advancement aimed at autonomy and connectivity to assist drivers, rather than completely replace them.

This strategy will continue to improve their operation and instill confidence in the general public (who may be a bit skeptical after recent autonomous crashes).

With time, attention, and dedicated effort, drivers will soon have an improved job experience and safer environment. Features and attributes will use technology and automation to ensure protection from lane departures, blind spots, and maneuverability errors. These enhancements will make the job easier, safer, and more appealing. Consequently, such features will solve problems long before the wide adoption of a completely autonomous semi-truck.

Focus on today’s issues first. Embrace innovations for the future.  Be patient as they mature.

4. Will supply chain transparency and visibility ever be widespread?

Yes, we are making progress; but it is going to take a while. The tools for full transparency are available to those who have a unified set of assets. But without a globally accepted set of communication protocols, full supply chain transparency can’t be achieved.

In time, protocols will be established, blockchain will be more prevalent, and full-fledged visibility and subsequent control will be at steady state, steady flow. Right now, the market is highly fragmented with a wide range of connectivity, starting all the way at zero. We are still far from complete application program interface (API) connectivity among all trucks and fleets.

Blockchain technology – a robust means of traceability through a distributed ledger system – will progress. This will be a game changer for transparency, visibility, and control. Industry collaboration via organizations like Blockchain in Transport Alliance (BiTA) and other associations will continue to lay the groundwork for the universal protocols needed to achieve the visibility and control that will bring value to the supply chain.

5. Will blockchain technology help with customs documentation and other transportation record-keeping?

When blockchain technology gains more traction within the supply chain and logistics industries, the burden of documentation will lessen.

A recent Supply Chain 24/7 article cited shipping company Maersk, who conducted research three years ago when they followed a refrigerated container transporting roses and avocados traveling from Kenya to the Netherlands.  The journey took 34 days – 10 of which were idle waiting for paperwork.

A Maersk executive told Bloomberg Reporter Kyunghee Park, “The paperwork and processes vital to global trade are also one of its biggest burdens. The paper trail research that Maersk did uncover the extent of the burden that documents and processes inflict on trade and the consequences.”

Maersk has commissioned IBM to monitor its cargo and documents in real-time, using blockchain.

The litany of required customs documentation is costly and just plain burdensome. The good news is that it is one of the lowest hanging fruits for blockchain to solve. The blockchain is a byproduct of the cryptocurrency (think Bitcoin) movement. It provides an uncanny level of security in that no entity in a supply chain can cover up a mistake by altering a database entry.

Because blockchains are ledgers open to anyone in a transaction, everybody is watching. In the supply chain, it could include manufacturers, customs agents, shippers, regulators, 3PLs, carriers, and drivers. A chain may extend from raw materials to finished goods on a consumer’s table.

A Bloomberg analyst called blockchain “the biggest innovation in the industry since containerization.”

But many links in the supply chain aren’t fully onboard with blockchain – yet. As blockchain technology becomes more refined and prevalent, it will provide many benefits.

Read: Why Every Company Will Be Using Blockchain By 2027

These questions are among the many that prevail in our industry. Their answers are temporal.  As our dynamic changing and growing environment changes, so will the answers to such questions.

Related Article: Logistics Freight Consolidation and Its Benefits to Shippers

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