What it is, what benefit it offers, and how to successfully implement it

Abstract TERMINUS Fleet Management System is a fleet management software developed for ready mixed concrete companies by Freewill FX Company Ltd. in Thailand. Freewill FX so far has successfully implemented step one and two of TERMINUS Fleet Management System with one of Thailands largest concrete companies, controlling over 300 ready mixed concrete trucks. After ten months of operation, Freewill conducted a post implementation survey among the concrete company and the subcontracted transporters. In addition, extensive interviews with representatives of both parties were held to analyze the extent of achieved improvements and to identify areas for further improvement of the system and/or integration of additional work processes. This paper is a non-technical guideline for a successful implementation. It briefly explains what TERMINUS Fleet Management System is, what benefits it offers and illustrates the achieved improvements ten months after implementation of the first two phases. TERMINUS Fleet Management System can be adapted to support any fleet operation such as trucks and trailers, cold chain delivery or passenger transport.

Content

Introduction

Stakeholders

Situation before and after TERMINUS Fleet Management System

TERMINUS Fleet Management System - how it works

Implementation Steps

Results and Recommendations

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Conclusion

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About Freewill FX

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Introduction
TERMINUS Fleet Management System has been implemented with one of Thailands largest ready mix concrete companies controlling over 300 trucks, in August 2011. In June 2012, Freewill conducted an online survey addressed to all involved management and staff members of the Concrete Company and their third-party Transporters. In addition Freewill conducted interviews using the approach described hereafter. CONCRETE COMPANY Discussion meeting with Project Sponsor to receive an overall feedback from Management level. Discussion meeting with Supervisors of the Dispatch Operation Discussion meeting with users of the Dispatch Operation Observe actual operation of users of the system in Dispatch Department TRANSPORTERS Select five transporters with different size/usage parameters. Discussion with Management of each of the selected transporters. Observe actual operation of users of the system

The aim of the Post implementation review was to: Obtain feedback from Management and users Evaluate the extent of improvements realized through the implementation of TERMINUS Fleet Management System for both, the Concrete Company and Transporters Identify areas for further improvement of the system and/or integration of additional work processes

Based on the findings and inputs received, we have compiled this post implementation review summary as a non-technical guideline for a successful implementation without omitting to illustrate how the system works, what benefits it offers and what improvements have been achieved ten months after implementation of the first two phases.

Stakeholders
There are four stakeholders. Each of them has its specific core operation and administrative duties (back office).

CONCRETE COMPANY

Core Operation Receive Orders Plan deliveries Dispatch trucks Monitor truck movement

Back Office Order to Cash Purchase to Pay HR & Finance Reporting

CONCRETE PLANT

Core Operation Receive Orders Produce Concrete Plant traffic logistics Load trucks

Back Office Raw material procurement Plant maintenance

CUSTOMER SITE

Core Operation Order concrete Prepare site for delivery Receive delivery

Back Office

TRANSPORTER

Core Operation Provide trucks Provide drivers

Back Office Payroll Truck maintenance

Situation before and after TERMINUS Fleet Management System

The concrete companys operation covers all of Thailand. The company sources its cement from its parent company and uses its own network of approximately 33 batching plants to process the cement to ready mixed concrete which it then delivers to its customers through a fleet of more than 300 trucks. The concrete company does not own any ready mix concrete trucks. It obtains them from a number of third party transporters under wet lease arrangements (hires vehicle and driver on a dedicated basis). The following table illustrates the business process and the supporting systems used:

Transaction Processing

Registering Sales Order

Split Load

Scheduling

Batching

Delivery Monitoring

Close Sales Order & Bill

System s

ERP System

Batching System

ERP

Table 1: Business Process and Supporting Systems before Terminus Fleet Management System

Customer orders are received and registered centrally and then distributed to the appropriate batching plant based on the customers location. The concrete company uses an ERP system to register and manage the orders. An operator splits the orders into individual loads (tickets) and then assigns them to a truck at the designated batching plant. Based on the customers requested delivery time and an estimated transit time between plant and customer site, the product is batched at the batching plant and the batching status is sent back to the central ERP system using the concrete companys network. Before TERMINUS Fleet Management System was implemented, the only way for the dispatcher to track the status of a delivery was to call the truck driver on his mobile phone and ask for an update on where he and the truck is, how far the discharge has progressed and when he expects to be back at the plant for a next load. After the product was delivered, customers signed a delivery ticket paper to confirm receipt of the product. When the truck returned to the batching plant, one copy of the delivery ticket was returned to the concrete company staff while one copy was retained by the driver and subsequently sent to the transporters office who may have used it for different purposes such as to cross check the bi-weekly summary delivery report received from the concrete company or for internal payroll purposes.

As the above table shows, all processes of the companys business operation were already supported by a decent system, either ERP or the Batching System; all but one. The absolutely crucial process of delivery monitoring was left to the old fashioned technology of telephony whose capabilities are basically limited to a simple hello, where are you? which could never support todays business requirements emphasizing speed, accuracy, and up to date information. Aside the aforementioned business requirements of the company, a truck fleet owner requires a whole set of information to manage and control his fleet and his drivers. Information he will never get by a phone call. The below table 2 shows the business process and the supporting systems after the implementation of TERMINUS Fleet Management System.

Transaction Processing

Registering Sales Order

Split Load

Scheduling

Batching

Delivery Monitoring

Close Sales Order & Bill

System s

ERP System

Batching System

ERP

Table 2: Business Process and Supporting Systems including Terminus Fleet Management System

As Freewills Post Implementation Review reveals, this minor change in the System landscape has had a considerable improvement impact on the process of Delivery Monitoring including a positive secondary effect on scheduling and bringing information to the Transporters that they never had before. Table 3 hereafter lists the ten main differences between an operation without TERMINUS versus an operation with TERMINUS.
Item Customer wants to know where the truck is Without Terminus Dispatcher calls truck driver on his mobile phone to ask location and calls back the customer With Terminus Dispatcher looks at the TERMINUS map screen, locates the truck and answers the customer immediately by giving the exact position of the truck Benefit Dispatcher does not depend on driver's accuracy of information. Customer is impressed with the speed and accuracy he receives the information. No need to spend telephone call charges. Request can be handled in one activity loop: take the call, answer the question, end the call. Then go to the next duty. Beneficiary Customer: immediate answer, no need to wait for a call back Company: Reduced telephone bill, improved time management of dispatchers Driver: no hassles with answering mobile calls while driving resulting in increased safety

Item Truck availability

Without Terminus The dispatcher cant know whether a truck has reported to work or not without a considerable communication effort.

With Terminus The dispatcher immediately sees on the computer screen when a truck reports to work or goes offline for break times or at the end of the working hours. Dispatcher immediately sees when the truck arrives at the customer's site and is alerted by the system if the truck is waiting longer than the agreed waiting time.

Benefit Instant visibility of available or not available trucks, reduced communication effort/cost, improved planning and dispatching opportunity

Beneficiary Company: Trucks can immediately be used when they become available Driver: No need for phone calls, less waiting time before being called for a loading Transporter: better truck utilization Company: Problems can be handled before it is too late (deterioration of the product quality) Driver: No need to call the dispatcher Transporter: Avoid risk of ready mix concrete ending up dry in the truck

Truck is waiting at customer's site before it can discharge

Unless the driver calls, the dispatcher has no idea when the truck arrives at the site and whether it is waiting there before discharge or not.

Truck discharges slower than expected

Unless the driver calls, the dispatcher does not know and may plan the next delivery based on assumed dispatching and backhaul times. Unless the driver calls, the dispatcher does not know about this unexpected delay

Dispatcher can see the progress of the discharge and is alerted by the system if the discharge takes more time than the agreed standard

Dispatcher knows the status of the truck at all times. Dispatcher can intervene if any irregularities occur as he is immediately made aware of it. Dispatcher does not have to manually follow up by calling every truck to find out whether there is a problem or not. Company has accurate information in case it wishes to claim additional cartage fees from the customer due to delays. Dispatcher has full visibility and can immediately follow up if delays occur. Dispatcher sees actual status and can plan the next load for this truck more accurately. Dispatcher can follow up to speed up the process.

Company: Action can be taken to avoid delays Driver: No need to call the dispatcher Transporter: can help monitor the status of his trucks and call the company's dispatch center if necessary Customer: free up the site of trucks standing idle Company: get the truck back quicker for the next load (shorten the cycle time) Transporter: the shorter the cycle time the more cycles per day -> increased income

Truck is waiting at customer's site after discharge is complete

The dispatcher is immediately aware if a truck doesn't leave the customer's site within a reasonable time

Item Truck gets caught in traffic jam

Without Terminus Dispatcher does not know and plans the next loading time based on wrong assumptions

With Terminus Dispatcher can see the position of the truck and that it is not moving

Benefit Dispatcher can adjust the planning and loading time for the next cycle

Beneficiary Customer: increased accuracy in planning leads to an increased number of on-time deliveries Company: a higher ontime delivery rate results in increased customer satisfaction Company: Reduced losses, no waste of cycle time due to 'extra-stops' Driver: no feel of guilt, no hassles of being suspected to cheat Transporter: no need for investigations in alleged fraud Transporter: can put an end to gasoline theft, most likely saving a considerable amount of cash

Unauthorized Product Discharge

Nobody knows about it

The dispatcher is immediately alerted by the system if a truck discharges product outside of the specified customer site A graphic report undoubtedly shows sudden drops of the gasoline quantity in the tank indicating date and time and location A report shows the drivers behavior in regards of speed, acceleration and breaking habits. Other options are available.

Drivers know that the system is watching, resulting in an extinction of cheating habits

Theft of gasoline out of the tank

Nobody knows until it's too late. Difficult to prove

Wrongdoers can be identified

Driver Behavior

Unless somebody calls to complain, nobody knows how politely and safely the driver is driving

Drivers awareness of the system results in better driver behavior

Cycle Time

Difficult to influence the cycle time positively as delays in each step of the delivery process are not visible

Process steps are visible at all time and corrective interventions can be initiated immediately

Reduced average cycle time and better ability to plan accurately which again improves cycle time by reducing waiting time

Company: improved perception of the company in public (company logo is not getting linked to badly driven trucks) Driver: increased road safety, lower accident risk Transporter: lower accident risk, less damage on trucks, reduced maintenance and repair cost Company: increased efficiency, more tickets with same or less trucks Transporter: Increased truck utilization more tickets per truck per day equals more income Driver: depending on the remuneration model, usually increased salary

Table 3: Business operation without TERMINUS versus an operation with TERMINUS

TERMINUS Fleet Management System how it works

TERMINUS Fleet Management System comprises three hard- and software components as described below and shown in table 4: Vehicle-mounted equipment consists of a black box, drum rotation sensor, GPS antenna, fuel level sensor and other optional sensors. These sensors collect data from various vehicle activities and send it to the vehicle mounted TERMINUS black box. The TERMINUS black box receives the data, performs some initial calculations and transmits it to the TERMINUS server according to a set time interval. Batching plant RFID readers and queuing software installed at each batching plant enable drivers to clock in and clock out of the system thus enabling TERMINUS to recognize when they are available to work. Back-end servers and software receive data from the vehicles and from the batching plants and performs relevant analysis. This data is then presented to users in the concrete company (dispatchers and customer service representatives) as well as outside of the company (transporters and customers) in easy to read status dashboards, and real-time tracking maps.

GPS Satellites

TERMINUS in Freewill Data Center (Bangkok)

Mobile data network

Vehicle mounted Blackbox & Sensors

Interface to SAP

Transporter/ Customer Portal

Data network Batching plant with RFID tag-in and queuing system

Concrete Companys SAP

Dispatch Operation

Table 4: Terminus Fleet Management System Overview

Implementation Steps
The implementation of TERMINUS Fleet Management System can be divided into four steps as shown in table 5 and described shortly hereafter. Hard- and Software Installation Back Office Integration Reporting & Dashboard Smart Planning

4. Efficiency Smart Planning 3. Analysis & Control Reporting / Dashboard 2. Cost Saving Back Office Integration 1. Visibility Hard- and Software Installation
- Truck Sensors - GPS - RFID - Terminus - Establish a link between Terminus and Back Office Systems - Obtain Management level visibility for analysis and decision making - Add an interactive Planning tool to further enhance the dispatchers planning ability

Table 5: The four steps to implement TERMINUS Fleet Management System

Step 1 Hard- and Software Installation By installing the hard- and software, we gain visibility. TERMINUS tells the Concrete Company and the Transporters in real-time where the trucks are located and at what speed they are moving, as well as arrival and departure time at customers site. Truck sensors monitor drum speed, discharge progress and gasoline usage. RFID tags register the drivers availability (check-in and check-out from work), arrival and departure at the Concrete Plant and eventually its movement across the Concrete Plant. It is crucial to carefully analyze the different stakeholders expectations and needs in regards of process integration across all four steps at the very beginning in order to clearly identify the suitable hard- and software to be installed.

Step 2 Back Office Integration The back office integrations focus is usually on the integration of the concrete companys Order to Cash process. There must be a link between customer orders received and registered into the concrete companys own IT system (such as ERP) and TERMINUS Fleet Management System. However, it is strongly recommended to carefully analyze all stakeholders expectations and needs in regards of back office integration since the very beginning, to make sure that the system will benefit and add value to all stakeholders.
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Example: it might not be of interest for the Concrete Company to know which driver drives the truck. For the Concrete Company knowing which truck delivers which order is just fine. The Transporter however could save a lot of time (and therefore money) in payroll calculation if the system report did not only mention which truck delivered which order, but also which driver drove the truck that delivered the order. While this linking of truck and driver may not be technically challenging, it requires a different batching plant equipment installation than TERMINUS standard truck registering does, hence clarifying needs and expectations at the very beginning is important to end up with a win-win implementation for all.

Step 3 TERMINUS Advanced Reporting & Dashboards While order takers and dispatchers want to know what is going on now, today and tomorrow, Management needs to know what went on yesterday, last week, last month, last quarter and last year, based on different variables, such as country, region or plant, and how the data refers to the companys KPI. Specific Management reports and a real-time dashboard will allow users to gather the required data and to display it in an always up-to-date manner.

Step 4 TERMINUS Smart Planning Smart Planning is an interactive tool that can be implemented on top of TERMINUS Fleet Management System. By its interactivity, it is used both the day before delivery execution to balance the delivery schedule among batching plants and trucks and also on the delivery day to deal with unplanned changes (e.g., site delays, vehicle breakdowns, same-day orders). It will reschedule concrete deliveries when the dispatcher squeezes a new delivery into the plan, or delays or cancels an existing delivery. Smart Planning first shows what would happen to other deliveries if the dispatchers intervention were to take place. The dispatcher then can confirm the move or try a different scenario. Smart Planning helps to further increase efficiency by giving the dispatcher an even clearer picture of the future plan based on actual events (delivery delays or early deliveries) and a clear scenario visualization in case of manual interventions. While Smart Planning is primarily a dispatcher tool, the increased efficiency also reflects on the Transporters as it results in a better truck utilization with less waiting time and therefore an increased number of concrete deliveries per truck per day.

Results and Recommendations

TERMINUS Fleet Management System has been well received and easily adopted by the users, especially on the Concrete Companys dispatcher team side. As mentioned by the Concrete Companys Management, the system implementation focused on the Concrete Companys benefits and it is therefore not surprising, that some of the Transporters still appear reluctant in realizing what benefits the system offers for them or even to use the system. We therefore would like to reemphasize the importance of including the Transporters since the planning phase and carefully
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analyze all stakeholders expectations and needs in regards of back office integration to make sure that the system will benefit, add value and substantially reduce cost for all stakeholders. While some cosmetics and functionalities continue to be improved to make TERMINUS Fleet Management System even more user friendly, the most appreciated features as well on the Concrete Companys as on the Transporters side are Visibility, Tracking, Planning and Report Printing. Dispatchers also have emphasized that customers were highly impressed and satisfied when the dispatcher was able to tell them immediately and exactly where the truck delivering their concrete was located at the moment they called. That said, TERMINUS Fleet Management System is not only benefitting the Concrete Company and the Transporters, it also provides tangible benefits for the Customer.

Quantitative Data Analysis The quantitative results from the user survey show that from the Concrete Companys participants 60% feel TERMINUS Fleet Management System makes their job easier, 75% think it makes their job more efficient, 71% believe it reduces cost, 62% confirm an improved operational visibility and 76% would recommend TERMINUS Fleet Management System to a friend. Quantitative analysis of data gathered by TERMINUS Fleet Management System and the Customers own ERP system, show a significant improvement of efficiency. Average Number of Tickets per Truck per Day Since the time TERMINUS Fleet Management System has been installed gradually on the 300 trucks in the entire fleet, the number of tickets per truck per day has increased from 1.9 tickets to 3.3 tickets which represents an improvement of as much as 75%, hitting a peak in May 2012 with 3.5 tickets per truck or a 83% improvement (blue and red line in the table 6 below). This of course could have been due to an increased demand for concrete in the customer market. We therefore compared the numbers of the entire ticket quantity over the same time frame and found out, that the market demand for concrete accounts for only 4% of the increase in tickets issued (green line in the table 6 below). Another scenario could have been, that for some reason, the average concrete quantity in m3 delivered per ticket has dropped, resulting in an increased number of tickets to deliver the same overall quantity of concrete. This assumption has been proved invalid. Indeed the average quantity of concrete in m3 over the same period of time has increased from 4.255 m3 per ticket to 4.412 m3 per ticket or by 3.69%, representing another increase in efficiency (table 7 below).

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Average Number of Tickets per Truck per Day compared to Total Tickets in SAP
4.0 3.5 3.5

Average number of Tickets per Truck

3.5 3.0 2.5 1.9 2.0 1.5 100% 1.0 100% 0.5 0.0 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 99% 74% 60% 77% 76% 137% 140% 111% 143% 132% 2.7 2.1 2.7 2.5

3.3

3.3

3.2 2.6

165%

181%

174%

183%

175%

91%

106% 78%

103%

104%

Feb-12 Mar-12 Apr-12 May-12 Jun-12

Month of Operation
Average number of tickets/truck/day Variance from initial value in % Table 6: Average Number of Tickets per Truck per Day Number of Tickets (from SAP) Variance in %

Average m3/ticket (data from SAP)

4.500 4.400 4.300 4.200 4.255 4.243 4.347 4.271 4.305 4.309 4.330 4.271 4.379 4.412 4.341

2011 Aug

2011 Sep

2011 Oct

2011 Nov

2011 Dec

2012 Jan

2012 Feb

2012 Mar

2012 Apr

2012 May

2012 Jun

Average m3/ticket

Average m3/Ticket - Variance in % (data from SAP)

104.00% 102.00% 100.00% 98.00% 96.00% 103.69% 102.01%

102.15% 100.00% 99.72% 100.37%

101.18% 101.27%

101.77% 100.37%

102.92%

2011 Aug

2011 Sep

2011 Oct

2011 Nov

2011 Dec

2012 Jan

2012 Feb

2012 Mar

2012 Apr

2012 May

2012 Jun

Average m3/ticket - Variance in % since initial value Table 7: Average quantity in m3 per ticket

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Other indicators analyzed In addition to the above, we also analyzed Average Loading Time per m3 (Table 8), Average Waiting Time before Product Discharge, the time between the truck arrives at the customers site until it starts discharging the concrete (Table 9), Average Discharge Time per m3 (Table 10), Average Waiting Time after Product Discharge, the time between the end of discharging the concrete until the truck leaves the customers site (Table 11).

Even though the graphics at first sight are not as impressive as those in above Table 6, it needs to be said that a decrease in the Average Loading Time of 1 minute can be substantial for a fleet of over 300 trucks. In essence it adds up to 16 hours of truck idle time that has been saved including the fuel a truck consumes over 16 hours of idle time as well as its exhaust emissions. Or in other words, 16 hours less in standing and loading can be turned into 6.6 more tickets delivered that day. Average Loading Time per m3 (Overall over time)
00:07:12 00:05:46 HH:mm:ss 00:04:19 00:02:53 00:01:26 00:00:00
2011 8 2011 9 2011 10 2011 11 2011 12 2012 1 2012 2 2012 3 2012 4 2012 5 2012 6
00:05:34 00:04:41 00:04:00 00:04:08 00:04:00 00:04:01 00:03:41 00:03:33 00:03:42 00:03:33 00:03:31

Year/Month Table 8: Average Loading Time per m3

Average Waiting Time before Product Discharge (Overall over time)

00:20:10 00:17:17 HH:mm:ss 00:14:24 00:11:31 00:08:38 00:05:46 00:02:53 00:00:00
2011 8 2011 9 2011 10 2011 11 2011 12 2012 1 2012 2 2012 3 2012 4 2012 5 2012 6
00:17:15 00:14:50 00:14:34 00:13:08 00:12:45 00:12:28 00:12:00 00:12:14 00:12:15 00:11:54 00:12:34

Year/Month Table 9: Average Waiting Time before Product Discharge

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Average Discharge time per m3 (Over all over time)

00:10:05 00:08:38
00:08:47

00:07:12 HH:mm:ss 00:05:46 00:04:19 00:02:53 00:01:26 00:00:00

2011 8 2011 9 2011 10
00:07:12 00:07:05

00:08:29 00:07:27 00:07:45 00:07:11 00:07:07 00:07:05 00:07:12 00:07:25

2011 11

2011 12

2012 1

2012 2

2012 3

2012 4

2012 5

2012 6

Year/Month Table 10: Average Discharge Time

Average Waiting Time after Product Discharge (Overall over time)

00:23:02 00:20:10 00:17:17 HH:mm:ss 00:14:24 00:11:31 00:08:38 00:05:46 00:02:53 00:00:00
2011 8 2011 9 2011 10 2011 11 2011 12 2012 1 2012 2 2012 3 2012 4 2012 5 2012 6
00:11:57 00:10:22 00:07:24 00:08:00 00:07:35 00:07:22 00:06:50 00:06:20 00:06:27 00:06:38 00:19:24

Year/Month Table 11: Average Waiting Time after Product Discharge

Conclusion
Even though we expected to see an increase in efficiency after implementing TERMINUS Fleet Management System, the improvements documented by the quantitative data is far beyond our keenest expectations. While the actual benefits achieved by such a system may vary from company to company depending on existing practices, dispatching organizational model and other factors, the present assessment clearly demonstrates that TERMINUS Fleet Management System is not just a nice to have tool; TERMINUS Fleet Management System is able to substantially increase the efficiency of the business operation.
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About Freewill FX
Freewill FX is an affiliate company of Freewill Solutions Co., Ltd. its mission is to help people have better lives and to help businesses to become more effective by using mobile and wireless technologies. With comprehensive know-how in wireless technologies, mobile enterprise solutions and mobile network infrastructure, the company offers products to serve in four business aspects; Mobile Network Testing Systems, Enterprise Mobile Solution, Advance Fleet Management System, and App Studio. Freewill Solutions Co. Ltd. is a leading software developer and professional services provider. Established in 1991, the company has built an extensive portfolio of in-house developed software systems, becoming a dominant market leader in the provision of solutions to the securities brokerage industry both locally and regionally with, additionally, a distinctive position in the provision of total solutions to the non-life insurance and business sectors. We offer our clients technology and business solutions to improve our clients business and to help them to be more competitive in the market. Freewill implements the know-how to improve business performance of companies operating in Thailand and the region by implementing world class and leading edge technologies, concepts and practices. Freewill is uniquely positioned to address both, the technical and people issues associated with implementing new technologies. This enables Freewill to offer its clients integrated end-to-end business solutions. The present white paper was written by Niklaus Stucki, a Managing Consultant of the Business Consulting Unit of Freewill Solutions (email: niklaus_stu@freewillsolutions.com )
Website: http://www.freewillsolutions.com/introduction/advance-fleet-management-system-

145.html (you may need to copy the link and paste it into your web-browser in case you receive a not-found error page)

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