LOGISTICS RESEARCH NETWORK ANNUAL CONFERENCE 2008 Supply Chain Innovations: People, Practice and Performance 10-12th September, 2008, University of Liverpool, Liverpool, United Kingdom The Chartered Institute of Logistics and Transport & University of Liverpool

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KEY COMPONENTS OF A REALTIME GLOBAL LOGISTICS VISIBILITY AND CONTROL PLATFORM Ahmed Musa ([email protected]), Yahaya Yusuf ([email protected]) Division of Systems and Operations, Lancashire Business School, University of Central Lancashire, Preston PR1 2HE, UK ABSTRACT Enterprises, especially those engaged in supply network management, mobile commerce, and mobile asset management, can enhance their competitiveness and profit margins by deploying mobile and wireless technologies for asset visibility. Modern supply network administration requires continuous inter-modal visibility of assets, which involves not only the generation and transmission of position, speed and time information in realtime, but also the security of the individual articles being shipped. The security of shipment should, of necessity, be guaranteed throughout the supply network. The visibility of mobile assets can be achieved by using RFID together with ubiquitous navigation, mobile computing, wireless communication, wireless mesh networks, the Internet, and advanced geospatial information systems. Mobile WiMAX, in particular, promises to deliver much higher data rates, quality of service and ubiquitous Internet access to the end user and lower deployment and licensing costs than 2G and 3G technologies. The aim of this paper is to discuss the key components of an envisioned automatic mobile and realtime asset tracking system that tracks not only the vehicle and freight containers but also the individual articles of the supply network, and instantaneously links distributed enterprise databases and applications. The system is under development at our University. Such a robust system will guarantee global and local realtime visibility, control and management of mobile resources and personnel, just as it would enable field workers and drivers to access remote enterprise databases. It should also find applications in several areas beyond logistics and supply network management. Because of space limitation, many aspects and details of the proposed architecture are not presented in the paper. Keywords: Supply networks, RFID, navigation and tracking, mobile computing, ubiquitous Internet access. INTRODUCTION In the past decade, customer beliefs, needs and expectations concerning availability of products and services have changed dramatically. With the advent of e-commerce, customers have come to expect complete and instant availability of products and services and of home delivery at their times of choosing. It is thus obvious that the supply or logistics system that moves products from production lines through retailing to consumption has also needed to revolutionize, to respond to customer demands. Physical distribution and materials management have since been substituted by logistics management and there have been the corresponding requirements of logistics to attend to the whole supply network (and not just to its separate functional parts) and to be dynamic and agile. However, not only retailer and customer demands and expectations have driven the transformation of logistics, but cost and service requirements have also served as strong incentives. Logistics and transportation may easily become extraordinarily costly and unaffordable if not handled effectively. For example, non-military freight transportation in the USA accounts for over 11 percent of Gross National Product (Thomas and Griffin, 1996; James, 2005). With the rapid expansion in internationalization of operations, e-commerce and home delivery of products, transportation costs have become even more considerable in retailing. Logistics cost as percentages of sales in some key industries are approximately: 5 percent for pharmaceuticals, 14 percent for manufacturing, and 25 percent for merchandizing (Bowersox and Closs, 1996). In fact, logistics costs of goods can be as high as 30 percent for some market segments (Thomas and Griffin, 1996). The success of any supply network is hence inextricably linked to the appropriate use of logistics. Logistics has become a source of competitive advantage for firms. Besides transportation, other

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elements of logistics are also expensive. Inventory build-up in stockrooms or warehouses with the aim of meeting demand on the fly is a hugely costly strategy. The stock itself is expensive and might not sell well, if at all, and could easily become superseded. Moreover, warehouses and distribution centres are generally costly to build, operate and maintain. The vehicles required to move products between warehouses and shops are expensive in terms of both capital and operational outlays. There is, therefore, a need to continually improve the efficiency of logistics systems, through the deployment of mechanism for the appropriate allocation of resources within the value network. By suitable integration of demand and supply, mainly by pervasive use of information and communication technologies and systems, supply networks can provide better service and value to customers through being more agile and dynamic in the allocation of resources (Harrison and White, 2005). With the adoption of appropriate tracking and monitoring technologies, cross-docking, mergein-transit, and inventory centralization and consolidation, supply network operators can optimize the visibility of their assets and items of merchandize, thereby being able to better meet capricious customer demands and expectations, and at the same time reduce cost and provide a competitive advantage for the network. The concept of a value system or value network, first introduced by Porter (1985), is deeply embedded in supply network management and plays a central role in the optimization of the supply networks. The activities in the value network are mainly inbound logistics, operations, outbound logistics, marketing and sales, and customer service. In Figure 1 we have matched these activities with Chopra and Meindl’s (2004) macro-processes of the supply network. It is clear in the figure that inbound logistics and operations are mapped one-to-one to supplier relationship management and internal supply network processes, respectively; while marketing, sales and customer service functions match with customer relationship management. The linking of the usual supply network functions to value creating activities within the network provides a framework that brings to the fore the central role of logistics in creating value in supply networks (Krajewski and Ritzman, 2005; Ruhi and Turel, 2006).

There appears to be a chronic fear of high-cost and low-return on IT investments on the part of logistics service providers. This has resulted from a number of factors such as customers’ insistence on a high degree of IT systems customization, frequent innovation and evolution of technology, and the disinclination of customers to offset the real costs of introduction of IT technologies. Logistics service providers’ strategies to deal with this problem have included unbundling of service offerings and pricing separately for IT support, and relying to ever greater extent on IT affiliates to handle IT matters. In spite of this challenge, however, logistics service providers still see supply network integration and increased customer collaboration through IT an excellent operational and growth opportunity in the marketplace (Lieb and Bentz, 2005). In this paper we illustrate how RFID, positioning and communication technologies can be configured to provide a platform for global, realtime visibility and control in supply networks beyond the present capabilities of standalone RFID systems and the EPC network. The proposed scheme takes a step towards the practical realization of the goals of concepts such as the ‘virtual warehouse’ and ‘inventory on the move’. Logistics management In order to ensure the availability of products when demanded by consumers, a supply network must manage its logistics infrastructure in terms of both product availability and demand administration.

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Partners constituting the supply network must be aware of market dynamics and be ready to predict and respond to especially sudden changes in demand. This can be achieved only through continuous visibility, the provision of seamless information flow throughout the supply network, and using forecast models that are based on realtime events and not on antecedents (Wang et al, 2007). But even those items that attract less volatility in demand and lifespan can benefit from efficient and cost-effective logistics systems. We can identify at least six components of a logistics system for the supply network: raw materials, storage facilities, inventory control, transportation, unitization and packaging, and information flow (Waters, 2003; Krajewski and Ritzman, 2005). The essence of logistics management is to be able to adequately manage all these components in such a manner that a supply network is indeed progressed as a value network, ie, an agile network that, whilst not being necessarily the leanest, is able to grow its market viability and revenue in real terms. In order to realize the potential merits of cost reduction and service enrichment, it is necessary that there is cooperation and coordination throughout the supply network. The modern approach to supply network management is to closely integrate these logistics tasks and reduce functional barriers between them. The EPCglobal supply network model strives to achieve global visibility of mobile assets and loose integration of partners’ databases and activities in the supply network. THE EPCGLOBAL NETWORK EPCglobal is the body that leads the global effort at developing industry-wide and industry-driven technical, process and service standards for the deployment of the electronic product code (EPC) to support the use of radio frequency identification (RFID) in operationalizing and progressing dynamic, realtime, information-dependent supply networks. The EPCglobal network is a scheme for deploying inexpensive RFID transponders (tags) and interrogators (readers) in global supply networks to enable network members to create affordable, standard-based online services for discovering, accessing and sharing information associated with every manufactured product and its EPC. It relies heavily on the cyber-infrastructure as a universal access and communication mechanism. Figure 2 is a schematic depiction of EPCglobal’s model of the global supply network (EPCglobal, 2004; Harrison, 2004). It has four layers: a) Hardware layer RFID transponders and interrogators. b) Middleware layer the Savant, which filters and aggregates EPC events and passes on only suitable information to the application layer. c) Application layer on which is defined the EPC information service (EPCIS) and the enterprise applications (ERP, warehouse management system, inventory management system, store management system, customer information, etc). d) Root service layer where the central EPCIS, the root object name service (ONS), and the EPC discovery service (EPCDS) are located. This layer is linked to the enterprise databases by the secure IP (Internet protocol). Every EPC (electronic product code) is registered with the root ONS. When the EPC is attached to a product, the product information is added to the manufacturer’s EPCIS (enterprise A). The fact that this product information is now available in manufacturer’s EPCIS is passed on to the EPCDS. When the product departs enterprise A’s premises, its departure is automatically noted in the local EPCIS. When the product arrives at enterprise B’s facility (such as a distribution centre or a retail store), its EPC is scanned and transparently registered with enterprise B’s EPCIS. This information is again transmitted to the EPCDS. When enterprise B needs information about specific products, it asks the root ONS for the location of enterprise A’s EPCIS. The root ONS supplies the location of enterprise A’s EPCIS. After the location of enterprise A’s EPCIS is known, the various enterprise applications of enterprise B can request for product information that is of interest to them. As products move through the supply network, their travels are recorded in the EPCDS and in the various EPCIS databases and this information can be accessed securely and seamlessly by all supply network partners, thereby providing some level of visibility and intelligence within the network.

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Limitations of the EPC network model The EPCglobal network clearly suffers from a number of drawbacks, some of which are listed below: a) Information centralization in the root ONS, EPCDS and EPCIS. This can attract malicious attacks of many sorts (man in the middle, replay, etc). b) Absence of complete guarantee of security for the various databases and for transactions. The lack of security can lead to vulnerabilities, system breakdowns and consequent lawsuits. c) Information about products or stock-keeping units in the supply pipeline is captured only by RFID readers which are normally located on loading and unloading bays and gateways of the manufacturer, the distributor and/or retailer. According to EPCglobal (2004), EPCglobal’s Hardware and Software Action Groups have been constituted to look into all facets of security control for the entire network and to develop appropriate security protocols for the services. But it is apparent that, like in many existing computer networks, security for the EPC network has been regarded as a secondary step, instead of being originally part of the network architecture. A number of security protocols and associated algorithms, open and proprietary, have been available in the IT literature and they can be implemented in networks (Ahmad, 2005), but networks still remain vulnerable to numerous types of attack of ever growing complexity and frequency. An attempt to provide security protocol for the EPC network has been made by, eg, Shih et al (2005) but no security system is ever foolproof. We are developing virtual private networks to improve security for the EPC network, but this is not the focus of this paper. The question of visibility beyond network premises or sites is crucial to continuous, global, realtime visibility of mobile assets. This is even more so in the present days of globalization, outsourcing and complex transnational intermodal logistics operations. Traditionally, a carrier or forwarder will provide tracking information to a shipper by capturing such information using signals from navigation satellites,

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eLoran (enhance Loran), and perhaps carrier’s own internal tracking system and thentelemetering the data to their (carrier’s) website. The shipper would then have to access this information manually. Statements like “you can log on to our website to track your shipment” have been heard from carriers and forwarders. While this may be sufficient for erratic shipments, it is certainly inefficient for supply network operation and goes against the grain of full and effective network visibility and coordination. Fourth-party logistics (4PL) service providers may, as a requirement of their more expansive contracts, seek to integrate their IT systems with those of their clients and thus be able to provide tracking information automatically to their client’s enterprise applications. However, this level of tight integration of IT facilities, although becoming increasingly widespread and popular with service providers (van Hoek and Chong, 2001; Lieb and Bentz, 2005), is in reality often less welcome by shippers and haulers because it tends to swell accounts, bind customers to specific carriers and eliminate competition. Recent surveys have found that although in general customers of logistics service providers showed increasing levels of satisfaction with service provision, up to 25 percent still indicated surprisingly high levels of dissatisfaction in dimensions that included assessment of competing options and providers, contractual conditions, and auditing of existing relationships. Many contractual relationships between 3PL/4PL service providers and customers survive on relational performance (cultural match) rather than on operational and cost performance (Szymankiewicz, 1994; Stank et al, 2003; Wilding and Juriado, 2004). Moreover, contrary to the needs of modern manufacturing processes, construction projects, and logistics data representation (Parsons and Wand, 2000; Kärkkäinen et al, 2004; Rönkkö et al, 2007; Wang et al, 2007; Thiesse and Fleisch, 2008), tracking information provided by some freighters to their customers is usually not item-centric but vehicle-centric. This means that in order for a supply network member to determine the location and state of an individual mobile item or product, it has to first identify the carrier, then the vehicle, and then the case, box or pallet into which the item was packed. In, for example, complex multi-company and international construction/development projects and emergency operations, this situation can be nightmarish (Kärkkäinen et al, 2004). For these and other reasons, we examine in the next section the means to achieving full, continuous, realtime visibility of products in global supply networks. It needs be emphasized here that term ‘item’ is usually used in the subjective sense, since it could refer, for example, to a particular pair of shoes in a box containing dozens of shoes or the box itself. A PLATFORM FOR GLOBAL LOGISTICS VISIBILITY AND CONTROL At the University of Central Lancashire, we are developing ways to achieve global, continuous, itemlevel visibility of mobile assets. This should ultimately lead to the realization of the vision of global, realtime integration of supply network assets (fixed and mobile), personnel, and remote, distributed enterprise databases. In one of our projects, we are developing a truly smart tag (with RF, navigation and communication capabilities) to replace the RFID transponder. To this end, we are exploiting the following technologies, in addition to RFID: high-accuracy positioning and navigation, infrastructurebased communication (wired and wireless), non-infrastructure-based communication (wireless ad hoc and mesh networks), tiny TCP/IP protocols for embedded devices, lightweight semantic web services, intelligent mobile multiagents, micro-electromechanical systems, chip-scale atomic clocks, and software-defined radios. The smart tag development effort is complex and multidisciplinary. Instead of describing it here, we illustrate below a simpler and more readily realizable platform for global realtime logistics visibility. We assume a priori that all RFID transponders and readers deployed by the supply network members and their logistics service providers satisfy EPCglobal’s Gen-2 standards, such that they are all multiprotocol-enabled and interoperable. Our architecture is represented in Figure 3. It has all the components of the EPC network in Figure 2, with positioning and global visibility suites added. Additionally, every transportation vehicle and mobile worker is assumed to be tracked quasicontinuously to requisite accuracy by global and/or local positioning systems throughout their mission. On land, the emerging intelligent roadway infrastructure may also be used for tracking vehicles and for gaining access to the Internet. The required accuracy of tracking depends on the mode of transportation and on the location of the vehicle. Space limitation forbids us to present in this paper a description of the myriad of available positioning technologies that will fit the bill. For the same reason, we are unable to give here a detailed analysis of the needed positioning accuracy at each instance in the supply network. This type of global tracking is already being provided by telematics service providers (such as Qualcomm, Globalstar, WhereNet, Guardian Mobility, BlueSky Network, and

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Raveon Technologies) using satellite-based transceivers from, eg, Inmarsat and Iridium, but there is usually no direct digital linking of tracking information with enterprise databases and application layers. In our architecture, all tracking information should be fed into the local EPCIS of the shipper; they may also be logged in the root EPCIS for the sake of easy retrieval by other network partners.

Communications satellites Navigation satellites

Cargo plane with RFID reader

Ship with RFID reader Cell base stn

Cell base stn Secure Internet

Truck with RFID reader AAA

Mobile worker EPCDS

eLoran transmitter

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Firewall

Local EPCIS

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RFID Reader

RFID Reader

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RFID tag

nt va

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y tor en Inv

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Figure 2: A global item-centric visibility architecture

The next source of data would be the RFID readers that are installed in every vehicle. Depending on the assigned task, every field personnel may also carry an RFID reader. We assume that every RFID reader in the network, irrespective of its location, is interfaced to the Internet via the wired or wireless telecom infrastructure. Hence, at any location or desired moment within the network in Figure 3, even while on transit, every RFID transponder in the network can be read by at least one RFID reader and the information can be fed instantaneously into the root and local EPCIS. The telecom technologies that grant access to the Internet are (Ahmad, 2005; Andrews et al, 2007; Siddiqui and Zeadally, 2006): a) Wired technologies

xDSL and cable modem; and

b) Wireless technologies Bluetooth, ZigBee, IEEE 802.11g/b/a, HiperLAN2, CDMA, UMTS, WCDMA (European UMTS), IEEE 802.20, IEEE 802.16, GSM/GPRS, HSCSD, EDGE, satellite, DAB, DVB-T, DECT link, and UHF. Wired broadband access technologies are, however, not suited to mobile applications although they may form a part of the core network. These wired and wireless technologies are converging, but their practical use would necessitate the notion of a global mobility provider (suggested in Musa and Yahaya (2008)) who (through various gateways, bridges and billing mechanisms) provisions for

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subscribers a service that enables them to roam seamlessly between these converging networks and various service providers. An RFID reader onboard a vehicle may need to read the RFID tags and telemeter the bill of lading to remote hosts only once, say during loading or soon after. Thereafter, the vehicle’s position will ordinarily provide enough information about the progress of the payload up to the end of transit. However, the RFID tags may also have the responsibility of monitoring the physical and chemical states of the shipments, in which case regular telemetering of tag reads to remote hosts will be necessary. The configuration in Figure 3 also allows remote hosts to issue control instructions to the vehicle and onboard RFID readers and tags provided the tags have enough memory and horsepower. CONCLUSIONS This paper has given only an introduction to one of our proposed architectures for global, realtime visibility and control of mobile assets in supply networks. Many technical aspects of the scheme have, for lack of space, not been discussed. These include the necessary memory, battery, horsepower and communication capabilities of RFID transponders and interrogators onboard transportation crafts; frequencies, data rates, network overlay, and medium access mechanisms of relevant wireless communication networks; system management and channel usage charges; and data warehousing and management systems in enterprise applications. As the system-on-chip matures and the horsepower of microchips increases, the need for RFID readers will correspondingly decrease and RFID tags themselves could one day become micro-databases possessing some intelligence and network interface capabilities. Since vehicle telematics is already a service used by many transport operators, the addition of RFID and the digital layer (represented by access to remote hosts and databases for realtime mobile supply network coordination and control) into the existing infrastructure seems an attractive, even if technically challenging, possibility. By providing realtime visibility, security and control of shipments to various stakeholders/members of the supply network, the proposed architecture turns every transportation vehicle into a virtual warehouse and every payload into inventory on the move. Furthermore, the scheme also clearly permits dynamic, adaptive planning, control and management of logistics resources (production lines, fleets, warehouses, etc), which renders outmoded many existing batch-mode logistics algorithms (for facility location, capacity allocation, production scheduling, vehicle routing, etc). Any real-life installation of RFID readers in vehicles would, however, have to address the apparent fact that metallic surfaces fade and multipath RF energy. This problem can be significantly overcome by using low and high frequency RFID technology and clever designs, and avoiding UHF. REFERENCES

• Ahmad, A (2005). Wireless and Mobile Data Networks. Wiley-Interscience, New Jersey. • Bowersox, DJ, and Closs, DJ (1996). Logistical Management: The Integrated Supply Chain Process. McGraw-Hill, New York.

• Andrews, JG, Ghosh, A, and Muhamed, R (2007). Fundamentals of WiMax: Understanding Broadband Wireless Networking. Prentice-Hall, New Jersey.

• EPCglobal (2004). The EPCglobal Network: Overview of Design, Benefits and Security. EPCglobal Network, Inc, Chicago, IL, www.epcglobalinc.org/.

• Harrison, A, and White, A (2005). Intelligent Distribution and Logistics. Foresight Project on • • • •

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• Lieb, R, and Bentz, BA (2005). The North American third party logistics industry in 2004: the • • • • • • • • • • • • • •

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