hype cycle for transportation 2008

ResearchPublication Date: 9 July 2008 ID Number: G00158938

© 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

Hype Cycle for Transportation, 2008 C. Dwight Klappich, Kristian Steenstrup, Thilo Koslowski, Tim Payne, Robert L. Goodwin, Cynthia Moore, Jeff Vining

Transportation industry operational pressures have increased dramatically as energy and other input costs have soared. Even as economic pressures rise, carriers and shippers must deploy new technologies to achieve customer satisfaction, growth, efficiency and operating cost goals.

Publication Date: 9 July 2008/ID Number: G00158938 of 41

© 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

TABLE OF CONTENTS

Analysis ............................................................................................................................................. 4 What You Need to Know ...................................................................................................... 4 The Hype Cycle .................................................................................................................... 5 The Priority Matrix ................................................................................................................ 7 Off The Hype Cycle .............................................................................................................. 8 On the Rise........................................................................................................................... 8

Transportation Predictive Analytics and Simulation ................................................ 8 Carbon-Sensitive Planning and Execution.............................................................. 9 Real-Time (Mobile) Routing................................................................................... 10 Shipment and Package Tracking .......................................................................... 11 Transportation — Carbon Accounting ................................................................... 12 Vehicle Information Hub ........................................................................................ 13

At the Peak ......................................................................................................................... 14 Radio Frequency Identification for Logistics and Transportation .......................... 14 Carrier Performance Management........................................................................ 16 Financial Import and Export Management ............................................................ 17 TMS Multimodal/International................................................................................ 17 Dock Scheduling and Carrier Appointment Management ..................................... 18 Mobile (Wireless) Supply Chain Management ...................................................... 20

Sliding Into the Trough .......................................................................................................21 Cargo Portals......................................................................................................... 21 RFID in Government.............................................................................................. 21 Transportation Industry RFID (Asset).................................................................... 22 Maintenance, Repair and Overhaul....................................................................... 23 Driver Load Matching ............................................................................................ 24 Fleet Vehicle Tracking ...........................................................................................24 Global Visibility for TMS ........................................................................................ 25 Traffic Data Services ............................................................................................. 26 Wireless Supply Chain .......................................................................................... 27 Remote-Diagnostic Telematics ............................................................................. 28

Climbing the Slope ............................................................................................................. 29 Fuel Management.................................................................................................. 29 Enterprise Asset Management .............................................................................. 29 TMS Multimodal/Domestic..................................................................................... 30 Commercial Telematics ......................................................................................... 31 Multicarrier Parcel Manifesting .............................................................................. 32 Navigation Solutions.............................................................................................. 33

Entering the Plateau ........................................................................................................... 34 Geographic Information Systems for Mapping, Visualization and Analytics ......... 34 Revenue Management (Yield Management)......................................................... 35 Transportation Routing and Scheduling ................................................................ 35

Appendixes......................................................................................................................... 37 Hype Cycle Phases, Benefit Ratings and Maturity Levels .................................... 39

Recommended Reading.................................................................................................................. 40



LIST OF TABLES

Table 1. Hype Cycle Phases ........................................................................................................... 39 Table 2. Benefit Ratings .................................................................................................................. 39 Table 3. Maturity Levels .................................................................................................................. 40

LIST OF FIGURES

Figure 1. Hype Cycle for Transportation, 2008 ................................................................................. 6 Figure 2. Priority Matrix for Transportation, 2008.............................................................................. 8 Figure 3. Hype Cycle for Transportation, 2007 ............................................................................... 37



ANALYSIS

What You Need to Know The sharp rise in the cost of energy has become the most compelling and problematic issue affecting enterprises across the transportation industry. With oil priced at more than $100 per barrel and continuing to climb, operating budgets have been decimated, thus forcing transportation enterprises to accelerate the adoption of technologies that can positively affect fuel and energy usage.

North American freight capacity constraints eased in 2007 and into 2008 as freight demand — particularly international freight inbound to the U.S. — eased and available capacity improved. Port congestion eased, and driver and vehicle capacity was acceptable. With the downturn in the U.S. construction industry, many people who would prefer to work in construction have become willing to drive long-haul trucks, which has temporarily addressed driver shortages and high driver-turnover issues. Although freight costs have risen due to energy costs, the easing of capacity constraints, which equates to more supply, has prevented costs from rising as high as they might have if supply was as constrained as it was several years ago. Continuing modal shifts, such as moving from less-than-truckload to truckload, or to rail, could shift capacity issues from one mode to others — there have been some small examples of this, such as capacity constraints with rail freight coming out of certain North American ports, such as Long Beach, California. With escalating energy costs, pressure for "greening" initiatives (that is, carbon footprint reductions) have eased temporarily, but there's no indication that sustainability pressure will fully abate anytime soon (if ever).

Skyrocketing costs, increasingly complex operating environments, continuous service and financial pressure, capacity volatility and increasingly demanding mandates have placed extreme pressure on transportation organizations just to keep themselves from sinking, to say nothing of innovating or pursuing new modes of operation. Most transportation organizations view technology as one way to adapt to changing and more difficult business and economic climates. Gartner sees an expansion in the market for transportation-oriented technologies, as well as increased demand for tools, such as multimodal transportation management systems (TMSs), where market growth outpaces other supply chain management (SCM) technologies.

Business applications (such as TMSs or transportation routing and scheduling) that can reduce total miles, reduce empty miles, better use freight capacities or minimize unnecessary moves are in high demand, and this business is growing above SCM application averages. Technologies that can monitor vehicles and drivers — for example, onboard telematics, which can capture things such as unnecessary idling, or inefficient driving behavior, such as hard braking — also are on the rise. Shifting capacity or cost drivers further enhances the value of multimodal applications that support modal flexibility, which is reflected in the advancing maturity of these solutions and in their growing demand in the market.

U.S. and other government mandates and security regulations are continuing to complicate the supply chain, domestically and internationally. U.S. border security mandates — such as the U.S. Customs and Border Protection's 24-Hour Advance Vessel Manifest Rule, the Proposal for Advance Trade Data Elements, 2007 (10+2) or Customs-Trade Partnership Against Terrorism (C-TPAT) — and operating mandates — such as the U.S. Department of Transportation's Hours-of-Service (HOS) Regulations, which dictate driver capacity or congestion pricing — are affecting how carriers and shippers conduct business. Technologies have emerged to support these initiatives — for example, telematics capture drivers' HOS, or global trade management systems support the data requirements of 10+2. Carriers and third-party logistics firms often must invest in IT-based solutions to meet these requirements. This also is an opportunity to leverage that



investment beyond compliance and improve operating effectiveness, or improve custom service and client retention. Carriers must adhere to government regulations regarding passenger and cargo security; however, they also should seek ways to leverage the information that's collected in ERP, CRM and SCM systems, deliver more-timely and comprehensive decision-making data, and enhance operating efficiency.

Technology innovation is continuing in radio frequency identification (RFID) systems, and even more in fleet/mobile tracking systems. Both offer leverage to cargo carriers when integrated with back-end business systems. Although RFID hype has eased during the past two years, some solutions are continuing to emerge (such as container tracking), but demand has been low. However, fleet/mobile tracking systems are being used in more and more enterprises, and the breadth and depth of solutions offered around these technologies, such as automated vehicle locating solutions that leverage GPS, are increasing. As less-expensive technologies emerge, such as cellular instead of satellite or other hardware alternatives, the market potential has expanded, and now smaller carriers and shippers are considering these technologies.

The Hype Cycle The Hype Cycle for Transportation, 2008 covers the major subsets of the transportation industry:

• Air

• Railway

• Maritime

• Motor freight

• Warehousing/logistics service providers

Given the extreme operational pressure that shippers and carriers are enduring, the scope of this Hype Cycle focuses primarily on technologies that affect operational effectiveness, or provide cost containment or reduction. Although many of the technologies can support passenger travel and cargo transportation, more emphasis is being placed on cargo, given the scope and impact of the cargo industry on global commerce. Many of the maturing technologies focus on intermodal cargo shipments (such as transportation management, vehicle tracking and routing, container tracking and status reporting, package tracking, cargo portals, and customs imports/exports). Given the mobile nature of transportation, mobility and telematics are becoming fundamental operating platforms for transportation providers; and although some solutions are maturing, innovation is continuing (see Figure 1).



Figure 1. Hype Cycle for Transportation, 2008

Technology Trigger

Peak ofInflated

ExpectationsTrough of

Disillusionment Slope of Enlightenment Plateau of Productivity

time

visibility

Years to mainstream adoption:less than 2 years 2 to 5 years 5 to 10 years more than 10 years

obsoletebefore plateau

As of June 2008

TransportationRouting andScheduling

Revenue Management(Yield Management)

Commercial Telematics

Geographic InformationSystems for Mapping,

Visualization and Analytics

Navigation SolutionsMulticarrier Parcel Manifesting

TMS Multimodal/Domestic

Fuel ManagementRemote-Diagnostic

Telematics

Wireless Supply ChainTraffic Data Services

Global Visibility for TMSFleet Vehicle TrackingDriver Load Matching

Maintenance, Repair and Overhaul

Transportation Industry RFID (Asset)

RFID in GovernmentCargo Portals

Mobile (Wireless) Supply Chain ManagementDock Scheduling and Carrier Appointment Management

TMS Multimodal/InternationalFinancial Import and Export ManagementCarrier Performance Management

Radio Frequency Identificationfor Logistics and Transportation

Vehicle Information HubTransportation —

Carbon AccountingShipment and Package

TrackingReal-Time (Mobile)

Routing

Transportation Predictive Analytics and Simulation

Carbon-SensitivePlanning and Execution

Enterprise Asset Management

Technology Trigger

Peak ofInflated



time

visibility

Technology Trigger

Peak ofInflated



Technology Trigger

Peak ofInflated



time

visibility

time

visibility





As of June 2008

TransportationRouting andScheduling



Geographic InformationSystems for Mapping,

Visualization and Analytics

Navigation SolutionsMulticarrier Parcel Manifesting


Fuel ManagementRemote-Diagnostic

Telematics

Wireless Supply ChainTraffic Data Services

Global Visibility for TMSFleet Vehicle TrackingDriver Load Matching



RFID in GovernmentCargo Portals

Mobile (Wireless) Supply Chain ManagementDock Scheduling and Carrier Appointment Management

TMS Multimodal/InternationalFinancial Import and Export ManagementCarrier Performance Management

Radio Frequency Identificationfor Logistics and Transportation

Vehicle Information HubTransportation —

Carbon AccountingShipment and Package

TrackingReal-Time (Mobile)

Routing


Carbon-SensitivePlanning and Execution




Source: Gartner (June 2008)

The Priority Matrix Risk-averse technology providers, shippers and carriers should focus on the left half of the Priority Matrix for Transportation, 2008 (see Figure 2) to determine which technologies are mature and proven. Focusing on the upper half highlights technologies that will have the maximum impact on the industry, based on the level of benefit (transformational or high benefit). Although some technologies (for example, transportation routing and scheduling) are approaching the Plateau of Productivity, innovation in and around these solutions is worthy of consideration as upgrades to or replacements for existing solutions. Several technologies (such as TMS multimodal/international or maintenance, repair and overhaul) show a time to plateau of five to 10 years, but this shouldn't be viewed as an indication that they're immature. These technologies are mature and have many viable providers; however, the high budget outlay and entrenched legacy systems mean that it will take several years for these new technologies to replace legacy systems, despite the strong business case for these systems. In addition, these solutions are continuing to evolve and expand, which is extending the time to plateau.



Figure 2. Priority Matrix for Transportation, 2008

Transportation — Carbon Accounting

low

years to mainstream adoptionbenefit

moderate

high

transformational

As of June 2008

Carbon-Sensitive Planning and Execution

Driver Load Matching


Real-Time (Mobile) Routing

Wireless Supply Chain

Cargo Portals

Carrier Performance Management

Dock Scheduling and Carrier Appointment Management


Fleet Vehicle Tracking

Geographic Information Systems for Mapping, Visualization and Analytics

Global Visibility for TMS

Multicarrier Parcel Manifesting

Navigation Solutions

Traffic Data Services


Financial Import and Export Management

Mobile (Wireless) Supply Chain Management

Remote-Diagnostic Telematics

TMS Multimodal/ International


Fuel Management

Shipment and Package Tracking


Revenue Management (Yield Management)

Transportation Routing and Scheduling


Vehicle Information Hub

Radio Frequency Identification for Logistics and Transportation

RFID in Government

more than 10 years5 to 10 years2 to 5 yearsless than 2 years

Transportation — Carbon Accounting

low

years to mainstream adoptionbenefit

moderate

high

transformational

As of June 2008

Carbon-Sensitive Planning and Execution



Real-Time (Mobile) Routing

Wireless Supply Chain

Cargo Portals

Carrier Performance Management

Dock Scheduling and Carrier Appointment Management


Fleet Vehicle Tracking

Geographic Information Systems for Mapping, Visualization and Analytics


Multicarrier Parcel Manifesting

Navigation Solutions

Traffic Data Services


Financial Import and Export Management

Mobile (Wireless) Supply Chain Management

Remote-Diagnostic Telematics

TMS Multimodal/ International


Fuel Management

Shipment and Package Tracking


Revenue Management (Yield Management)

Transportation Routing and Scheduling


Vehicle Information Hub

Radio Frequency Identification for Logistics and Transportation

RFID in Government

more than 10 years5 to 10 years2 to 5 yearsless than 2 years


Off The Hype Cycle • Airline Self-Service Kiosks

On the Rise Transportation Predictive Analytics and Simulation Analysis By: Dwight Klappich



Definition: Operational transportation planning and management applications are maturing, but these traditionally focused on planning and optimizing, given a known set of planning data, such as orders and shipments to be executed in a particular time frame. Operational planning systems are good at optimizing around what is known today but are not intended to look into the future to help predict conditions based on limited information. For example, a transportation planner might want to forecast load volumes many months in advance to determine whether there is enough committed capacity when needed, or a user might want to evaluate traffic patterns around major metropolitan areas to do a better job of avoiding traffic congestion.

Position and Adoption Speed Justification: The use of forward-looking, predictive modeling tools in a transportation context is its initial stage, and most users have built their own capabilities using various generic analytical or simulation toolkits. A small number of TMS vendors are adding some limited forward-looking planning capabilities, such as freight forecasting, tactical planning and transportation network design. TMS vendors will continue to add advance-planning capabilities, but this will center around their core TMS planning engines and data model.

Other vendors that provide raw simulation tools or generic optimization engines likely will create semipackaged vertical templates based on work they do with early adopters to construct transportation-oriented simulation and planning toolkits. These vendors will be more adept at considering conditions external to the TMS, such as traffic patterns and economic models. The latter solutions will be stand-alone external tools used by a small number of planners.

User Advice: If your predictive-modeling needs are aligned directly with the TMS and focus on forecasting and planning future transportation requirements, then direct your attention to the incumbent TMS provider. If the need is freight-related but is not aligned with the data housed in the TMS (such as traffic or economic data), then consider generic simulation and modeling tools, but expect to build your own solution for the next few years.

Business Impact: Although operational planning reduces costs and improves service for the given parameters, data and constraints, predictive tools can have an equal or greater impact on planning, because they look forward and can identify and plan around future events that would adversely affect the day-to-day operational plan. For example, if the organization is in a capacity crunch, then the operational planning engine can determine how best to operate under these conditions, whereas using predictive tools instead might have enabled the organization to avoid the problem.

Benefit Rating: Transformational

Market Penetration: Less than 1% of target audience

Maturity: Embryonic

Sample Vendors: i2; Quintiq; SAS

Carbon-Sensitive Planning and Execution Analysis By: Dwight Klappich

Definition: Carbon-sensitive planning and execution refers to a range of technologies and applications that enable enterprises to identify, model and, ultimately, optimize their environmental effects across entire supply chains. Initial solutions will be narrowly focused on specific supply chain processes and activities, such as transportation planning, network design and carbon footprint dashboards. In the near term, they will model and optimize around a limited set of resource constraints, such as minimizing carbon footprint. Later, yet-to-emerge solutions will extend across other resource constraints — and across the extended supply chain and product life cycles for all environmental conditions. Although carbon footprint is the primary focus



today, in the future, users will need to consider other factors that affect their environment, such as direct operational emissions of other pollutants, energy consumption and waste generated.

Position and Adoption Speed Justification: Tools exist that can minimize or optimize variables that can be inferred to affect carbon footprint, such as transportation planning to minimize wasted miles, which can be inferred to reduce carbon emissions. However, tools that explicitly include carbon footprint as an optimization goal and have content databases that provide carbon footprint variables, such as a diesel truck of a certain size emits so much carbon dioxide per mile driven, are just now emerging. Other solutions, with a business intelligence base, are being developed to help enterprises measure and monitor the carbon emissions of their operations.

Narrowly focused tools will first emerge on top of existing applications such as transportation management systems (TMSs) or network design, and these will simply add carbon considerations as variables or data elements. However, it will be several years before more-holistic solutions emerge that span multiple functional/application domains and that provide a more-complete picture of an organization's carbon footprint to the degree that an enterprise can effectively determine the costs of an environmentally sustainable and profitable business operation.

User Advice: Identify the largest contributions your supply chain makes to the environment.

Complement your carbon footprint analysis, and move toward resource intensity analysis.

Adopt supply chain management technologies — new attributes, data and new models — that identify, track and reduce your supply chain's ecological footprint.

Business Impact: At a minimum, these solutions will enable enterprises to comply with emerging governmental mandates and regulations, as well as leverage their adoption of "green" initiatives as good publicity. However, in many cases, optimizing around green considerations has complementary business justification, as reducing emissions can reduce other costs. For example, reducing wasted miles driven for a green initiative translates to significant savings on fuel and overall transportation costs.

Benefit Rating: Moderate


Maturity: Embryonic

Sample Vendors: Barloworld; i2; Infor; Lawson Software; SAS; Supply Chain Consulting (Australia)

Real-Time (Mobile) Routing Analysis By: Dwight Klappich

Definition: Traditional routing and scheduling applications typically batched orders for a day's worth of deliveries and created an optimal set of routes for a given day or shift. These routes were assigned to a driver and an asset, and often the routes were distributed on a piece of paper. As technology has evolved, and as mobility technologies have become more cost-effective, we have moved from paper distribution of routes to downloads to handheld or other devices, but still the routes were static and set at the beginning of the day or shift.

Newer solutions are emerging that will enable real-time communication with the drivers to track their activities and locations and, when necessary, reroute them on the fly. Initial solutions will be dispatcher-centric, with limited communication with the driver, but more-robust solutions will emerge that can automatically and proactively adapt to daily activities. For example, as traffic-



monitoring solutions emerge and become more pervasive, the routing system could receive notification of a traffic congestion problem that would delay a driver and for which rerouting might be warranted, and the system could dynamically recalculate the route and communicate the new route to the driver in real time.

Position and Adoption Speed Justification: Real-time routing solutions are nascent, and, so far, only a few vendors are testing the reach of these types of solutions. Initial solutions will be adaptations of traditional routing and scheduling wherein a route can be replanned and a dispatcher will control the process. In the future, more automated solutions will emerge wherein real-time data within and outside the organization, such as traffic data, will be used to more automatically direct daily activities.

User Advice: Users should first get daily routing and scheduling under control, so the first priority is to implement more-traditional routing and scheduling solutions. Mature users of commercial routing and scheduling looking for incremental benefits should determine what, if anything, their current vendor is or plans to do in regard to real-time routing. However, most users should conduct a new investigation, considering their incumbent vendor, as well as others.

Business Impact: Real-time routing will add incremental benefits to mature users of routing and scheduling, further reducing costs and improving service.


Market Penetration: 1% to 5% of target audience

Maturity: Emerging

Sample Vendors: Descartes Systems Group; Manhattan Associates; RedPrairie

Shipment and Package Tracking Analysis By: Dwight Klappich

Definition: Shipment and package tracking is a commercially available real-time satellite, cellular or GPS communications-based system for tracking and reporting the delivery status of multiple shipments or packages on carriers' planes, ships or trucks. They typically use bar code scanning systems, although radio frequency identification (RFID) has been considered as a possible alternative, and readers to report the packages' last-known location and estimated delivery time. These are the technology vehicles for capturing delivery information used to provide better visibility to carriers and shippers. Mobile applications to support more functions, such as electronic signatures or real-time proof of delivery, are rapidly evolving to augment the basic tracking capabilities.

Position and Adoption Speed Justification: Major less-than-truckload, and parcel and small package carriers, such as DHL, FedEx and UPS, have gained significant advantages from deployment of customized, highly complex and responsive systems, and they had raised technology and cost barriers to prevent smaller players from emulating them. Commercial solutions are now emerging to provide these capabilities to carriers and shippers that lack the resources and expertise to develop these in-house. Vendors are maturing these technologies, and changes in technology platforms (for example, cellular-based systems vs. onboard computers and satellite communication) are lowering the cost of providing these capabilities, which will dramatically open the market to smaller carriers with lower IT investment capabilities.

Although tracking is the first priority, combining tracking with visibility and event management capabilities that can proactively identify problems and notify the applicable party about problems will add additional value and accelerate adoption.



Exposing tracking information through the use of a Web service will extend its value by enabling users that have service-oriented architecture (SOA)-compliant applications to embed tracking information in their business applications. Some ERP and transportation management system (TMS) vendors now support this capability with leading carriers that support Web services.

User Advice: Package tracking systems from well-established and technologically sophisticated carriers are highly reliable and deliver promised benefits. Shippers should carefully evaluate systems or services from newer entrants or nontechnology-sophisticated carriers to determine what services they offer, as well as their maturity and reliability. Shippers should determine if these services are needed and, if so, focus on carriers with proven offerings.

Business Impact: The primary business effect is significantly improved customer satisfaction and repeat business. A secondary effect is increased operating efficiency in delivery vehicle routing and dispatch.

Benefit Rating: High


Maturity: Emerging

Sample Vendors: Con-Way; FedEx; Freightquote.com; Intermec Technologies; National Air Cargo; PeopleNet; Pitney Bowes; UPS

Transportation — Carbon Accounting Analysis By: Dwight Klappich

Definition: Much of the "green" focus has centered around carbon reporting and, more recently, carbon accounting. Gartner sees a continuum from the fairly rudimentary reporting of aggregate, but select (not all) items that might contribute to carbon emissions to the ultimate vision of extremely robust and complex end-to-end "actual" accounting of carbon across extended supply chains. The former is becoming doable, if transportation management system (TMS) vendors add carbon as an explicit and manageable variable and data element to their TMSs.

TMSs are good at optimizing to reduce wasted miles, as well as reducing miles and costs, but carbon is not an explicit optimization variable. On the one hand, there's strong correlation between miles driven and carbon footprint, and improvements in the first provide similar benefits to the second. Some TMS vendors are talking about adding carbon, but this would initially be an average number for a certain class of vehicle, and not actual carbon emissions for a given trip, which would require carriers to report exact numbers. Users could pull mileage data and use published carbon footprint information to calculate and report carbon emissions, but, so far, the databases that provide this data are weak.

Carbon reporting is simply reporting on carbon based on aggregate information, such as miles driven. Carbon accounting is more complicated and further away. Average carbon accounting is where a carbon footprint acts like overhead, and total carbon "costs" are allocated on a fair-share basis to individual products and orders. Indeed, some items will be more explicit (orders on a shipment), but other items, such as enterprise energy use, will be prorated. Actual carbon accounting will be quite complex, similar to the complexity of activity-based costing (ABC), where detailed information is captured and allocated at a very granular level so that the total actual additive carbon contribution of an individual product, order, customer or supplier can be calculated.

For example, if there are two orders on a truck that emits a certain level of carbon per mile, and one order takes 50 miles and the other 200 miles, the associated carbon "cost" is accounted for



and allocated at that level. Although this appears to be a logical method, no solutions are currently available. No one knows what the cost of managing carbon at this level will be, and no one has put forth a realistic value proposition for doing this.

Position and Adoption Speed Justification: While reporting is useful and partially doable with current TMS applications, there are no commercial systems fully doing it. However, the ultimate vision of end-to-end "actual" accounting of carbon across an extended supply chain is unrealistic for the near future. Missing today are standards in terms of carbon emission definitions, measurement and emissions expectations for a given activity, and the quality and reliability of emerging carbon footprint data is suspect.

More-robust tools will emerge during the next 10 years that support increasingly sophisticated carbon accounting — first, within an enterprise and, later, across the extended supply chain. Even when actual costing tools emerge, few enterprises will adopt them comprehensively across their organizations. Additionally, given the low adoption of ABC, which is quite mature, the adoption of actual carbon costing is likely to have a similarly low adoption rate for at least the next 10 years (and likely longer).

User Advice: Enterprises should plan and budget for a multiyear journey to move from basic carbon reporting to end-to-end actual carbon accounting.

Business Impact: Carbon footprint is a politically sensitive area receiving a lot of attention. The value in transportation and logistics will be more marketing spin, because the value is derived mainly from improved transportation operations, which TMSs already provide. Therefore, adding the carbon as a reporting element is more political than value-add.

Benefit Rating: Low


Maturity: Embryonic

Sample Vendors: i2; JDA Software Group; Oracle OTM; SAS

Vehicle Information Hub Analysis By: Thilo Koslowski

Definition: The vehicle information hub is a hardware- and software-based technology solution that enables users to access and interact with digital content from any portable device in a safe and automobile-specific manner. The information hub doesn't store any content, but provides an interface to access content from other portable devices.

Position and Adoption Speed Justification: As the use of portable devices grows, consumers increasingly question the value of high-priced, embedded options that are restricted to the vehicle. In addition, the limited ability to upgrade embedded components, the increase in new devices and the availability of aftermarket integration solutions (such as FM transmitters) are forcing the automotive industry to change its approach. Seamless integration and usability of portable devices in automobiles do not yet exist, and only a few vehicle manufacturers and suppliers are developing such solutions. Vehicle information hubs could also evolve in the automotive aftermarket and provide a future alternative to expand the value proposition of today's personal navigation devices (PNDs). Recent product launches and announcements of vehicle-hub-centric solutions by Ford and Hyundai/Kia have increased the automotive industry's interest in this cost-effective technology.



User Advice: To support consumer demand for portable devices in the vehicle, the automotive industry can create competitive differentiation through vehicle information hubs that ensure a safe and satisfying user experience in the automobile. In particular, original equipment manufacturers (OEMs) and suppliers must focus on developing innovative connectivity (personal-area networks [PANs] and wide-area networks [WANs], for example), user interfaces (touch-based haptic steering-wheel-based input systems, for example) and output technologies (audio and head-up displays, for example). Additionally, they must collaborate with companies outside the automotive industry, such as consumer electronics leaders and software/hardware providers. Vehicle information hub-centric offerings don't address all vehicle information and communication technology (ICT)-related needs, and have some reliability challenges due to a simplified technology design that minimizes embedded technologies (for example, for safety-related applications such as automated airbag deployment notification). Hence, vehicle manufacturers should consider complementing a vehicle-hub solution with a traditional telematics service.

Business Impact: Vehicle manufacturers will be able to increase revenue from vehicle information hub offerings and create a flexible method to enable users to access their portable devices in the vehicle. This will help the automotive industry to overcome some of the main challenges regarding product life cycle limitations for embedded electronics (such as the fact that consumer electronics evolve much faster than vehicles, often leading to outdated technologies in automobiles).



Maturity: Emerging

Sample Vendors: Azentek; Continental; JCI; Magneti Marelli; Microsoft

Recommended Reading: "Microsoft, Hyundai Embrace Device-to-Vehicle Integration"

"Cool Vendors in the Automotive Industry, 2008"

"Ford Shifts Vehicle Hub Concept Into High Gear"

At the Peak Radio Frequency Identification for Logistics and Transportation Analysis By: Dwight Klappich; Tim Payne

Definition: Radio frequency identification (RFID) is an automated data collection technology that uses radio frequency waves to transfer data between a reader and a tag to identify, track and locate that item. RFID does not necessarily require physical sight or contact between the reader and the tagged item. An RFID reader is a radio frequency device that emits a signal through an antenna. This signal is received and responded to by the RFID tag. Readers come in various forms. A portal reads tags as they pass through it. A handheld device reads tags in a portable manner. Mounted readers are affixed to mobile assets to communicate with tags.

RFID tags are small devices that have a range of capabilities in terms of memory, read range and level of read/write, and contain a variety of information from product serial number to product history. There are two basic categories of tags — passive and active. Passive RFID, specifically ultrahigh frequency (UHF) passive, is the most-common form of RFID system in the logistics marketplace. A passive tag does not have a battery, and collects the necessary power from the radio interrogation of the reader; it provides only minimal information such as identification numbers and has a very limited read distance. Thus, these are fairly inexpensive tags that cost



from 10 cents to $10, with a range not normally exceeding 20 feet. Active RFID uses an attached battery to respond to a reader and provides more capabilities, such as the ability to identify individual items. Thus, the cost of active RFID runs from five dollars to hundreds of dollars, with a range not normally exceeding 300 feet. Additionally, battery-assisted passive technology (essentially, this is a low-cost active tag, but it is referred to as battery-assisted passive because it uses passive RFID protocols) is being researched and enables the long read range of active tags to be combined with the low cost of passive tags.

Position and Adoption Speed Justification: While there have been numerous applications of RFID hyped for inventory management, RFID and similar sensory technologies are emerging as an asset management tool that provides some level of asset visibility within a supply chain. Airlines facing economically challenging conditions will be slow adopters of RFID-enabled management systems. Many large carriers and shippers will consider RFID-enabled projects because of the global adoption of electronic manifesting. However, standard RFID technologies alone cannot provide long-range geolocating such as tracking the location of a vehicle miles from its domicile, so look for sensory technologies to intertwine with RFID tags to observe and communicate location and environmental conditions. A trend is the combination of sensory technologies — RFID/GPS, RFID/onboard computer, RFID/bar codes, RFID/Wi-Fi and others. Sensor-based combinations will become more viable with the standardization of the interface between the tag and the sensor, currently defined as Gen2 Class 3.

There has been an assumption that a network of connected RFID readers will emerge at ports of entry, warehouses or mobile assets such as on light rail, which has yet to materialize beyond narrow pilots. The technical and architectural requirements of sensory-based combinations or "automated identification technologies" will be dramatic in scale. If the technical and architectural realities are achieved, it will be vital to understand what to do with all the data now being collected along a sensory supply chain.

The use of RFID varies by segment, with asset management such as tracking returnable assets and transportation leading adoption. On the government track, be prepared for RFID-enabled projects to monitor assets with relatively long use cycles. Toll payment and contactless cards have been in use for some time, while applications in logistics and traffic management are emerging. However, RFID will not replace bar codes or other mobility solutions such as GPS. The various technologies will coexist because each technology is suitable in specific process situations. With airlines, adoption is slowed by the difficulty in substantiating a business case and differing ownership of the baggage equipment. In some airports, it is the airlines; at others, it is the airport. Additionally, adoption is slow with airlines because of the need for numerous locations (airports) and airlines to adopt the same technology to achieve the vision. Unless there is a mandate or all these groups can come to some form of agreement, baggage handling will continue to be a niche market.

User Advice: Monitor and be aware of various privacy impact assessments. Participate in RFID-enabled tracking systems, if only as a pilot project, to gain experience and positioning for widespread adoption of larger RFID-based system implementations in the future. RFID will require an infrastructure beyond tag/reader; it will require data storage and network performance.

Business Impact: Major initiatives that use or propose to use this technology will include tracking of assets, loss prevention, inventory management, rail transportation, logistics, toll payment, traffic management, and transportation asset tracking and control. The impact and business value will vary across industry segments, proposed use, or business solutions and regions. Within a single enterprise, the value will be derived from the potential additional benefits of using RFID technologies versus other identification technologies such as bar coding. In these cases, a cost-benefit analysis should compare the various identification technologies, and RFID should only be chosen if the business case proves RFID to be the better approach. The grander, yet so far



elusive, vision is the value RFID would offer as part of the extended supply chain and logistics challenge, where RFID would be used to track, monitor and facilitate the flows of products and modes of transportation across the global supply chain. To achieve the end-to-end vision, which remains just a vision today, RFID standards must emerge that define a set of requirements that the system components must follow to operate across enterprises and geographies. For example, global supply chains will require a set of common standards to facilitate proper interchanges of information across all the entities involved in an international shipment transaction.



Maturity: Emerging

Sample Vendors: Alien Technology; Atmel; IBM; Intermec Technologies; Lockheed Martin; Manhattan Associates; Motorola (Symbol Technologies); Savi Technology; Texas Instruments

Recommended Reading: "Hype Cycle for Radio Frequency Identification, 2005"

"Positions 2005: RFID Is Set to Redefine Industry Processes"

"RFID Isn't the Passport to Fast, Trouble-Free Baggage Handling"

"RFID Alone Can't Resolve Cargo Container Security Issues"

"RFID Enables Sensory Network Strategies to Transform Industries"

Carrier Performance Management Analysis By: Dwight Klappich

Definition: Carrier performance management capabilities typically sit on top of a transportation management system (TMS) where information pertaining to the behaviors of carriers is captured as part of the carrier communication and tendering process flows. TMSs capture a significant amount of information about shipments, including information related to carriers such as load acceptance rate, turn-down rate, on-time pickup, on-time delivery, loss or damage claims, billing accuracy, and compliance with predefined rules and commitments. Metrics and key performance indicators can be calculated for carriers, across many dimensions like individual shipments, by lanes, by shipping location/destination, by shipping mode and so on. These metrics can be used to support day-to-day carrier performance improvement initiatives as well as used in negotiations, problem resolutions and dispute resolution.

Position and Adoption Speed Justification: TMS vendors are adding more reporting and analytics to their portals, and some are extending this into a collaborative environment where information can be shared directly with carriers over the carrier portal. Some of the software-as-a-service TMS vendors are taking this one step further by providing benchmark information that highlights performance that spans multiple shippers so that an individual shipper could compare its current performance to others.

User Advice: Adding carrier performance management to a commercial TMS is an extension of the base TMS functionality and should be considered by all TMS customers and prospects. Users not using a commercial TMS would have to build their own solutions, possibly using a performance management tool, but this could be difficult, and some of the necessary information might be hard to get without a TMS.

Business Impact: Carrier performance impacts a company's customer service, and monitoring the behavior of carriers over time can identify problems earlier and can help determine corrective



actions; the resulting information can be used to identify carriers to drop or be used to negotiate improved terms in the future.



Maturity: Adolescent

Sample Vendors: i2; JDA Software; LeanLogistics; Manhattan Associates; Oracle OTM; Sterling Commerce; Transplace

Financial Import and Export Management Analysis By: Dwight Klappich

Definition: Financial import and export management refers to a category of software that addresses the financial management (such as letters of credit, integration with trade banks and freight settlement) aspects of global trade management.

Position and Adoption Speed Justification: Financial import and export management remains under-automated, with some narrowly focused applications, such as letter of credit. Applications that support this function holistically are nascent and immature.

User Advice: View investments in this area as interim solutions. As applications become more holistic and mature, lean toward software as a service (SaaS) or on-demand alternatives for near-term investments. Longer term, compare the cost benefits of on-premises licensed software with that of SaaS, or even outsourcing of the entire business function (or business process outsourcing [BPO]).

Business Impact: Financial transactions are intrinsic to global trade; however, the processes remain highly manual and prone to mistakes and problems. This can increase costs and negatively affect trade performance. Early solutions focused exclusively on reducing administrative costs; emerging solutions will enhance overall trade-finance activities. Although the value of processing letters of credit is moderate, the greater value will come from using technology to support innovative trade financing strategies that would provide significant and, in some cases, transformational benefits.




Sample Vendors: Axway; Bolero International (bolero.net); Management Dynamics; TradeBeam; Vastera (Morgan Stanley)

TMS Multimodal/International Analysis By: Dwight Klappich

Definition: Global logistics applications help automate the movement of goods globally by ensuring that processes are synchronized with all the parties involved in the international shipment. International shipments are typically complex, multileg movements in which goods and information flow among many constituencies, such as suppliers, port operations, governments, ocean and air carriers, and domestic truck or rail carriers. Global logistics must support different modes of transportation, such as by water, truck, rail and air, with unique planning and execution



requirements not traditionally addressed by domestically oriented transportation management system (TMS) applications designed for domestic, truck and rail transport.

Position and Adoption Speed Justification: Solutions are changing rapidly because of pent-up buyer demands and consideration of global shipping requirements by many enterprises, coupled with the increasing economic pressures to reduce supply chain costs. Although solutions are incomplete, they are maturing rapidly, and support for international shipping requirements is improving. Getting accurate source data, such as vessel sailing schedules, as well as difficulties in modeling the complexities of itinerary construction across multiple models, such as wait time at port, have limited adoption of these solutions as well.

User Advice: Enterprises with significant international logistics operations should consider these solutions, paying particular attention to the breadth and depth of the TMS solutions being considered, with equal or greater attention focused on the global logistics domain expertise of the vendors.

Business Impact: Complexity and the rising cost of global logistics, particularly rising fuel costs, combined with the need to manage international operations cost-effectively and with sufficient management controls for the safe and secure transit of goods, drive the need for software to help manage global logistics operations.




Sample Vendors: GT Nexus; i2; JDA; JDA (Manugistics); Log-Net; Manhattan Associates; Oracle; SAP

Recommended Reading: "A Self-Diagnostic Model for Building a TMS Business Case and Evaluating TMS Sourcing Options"

"Report Highlight for Market Trends: Transportation Management Systems, Worldwide, 2006-2011"

"Issues to Consider When Building a TMS Business Case and Evaluating TMS Sourcing Options"

"TMS Sourcing Options Are Expanding With the Increase in the Number and Types of Products"

"Evaluating the Efficacy of TMSs as SaaS"

"Stratifying Transportation Management Systems: A Multilevel View"

"Magic Quadrant for Transportation Management Systems, 2007"

"Hype Cycle for Transportation, 2007"

Dock Scheduling and Carrier Appointment Management Analysis By: Dwight Klappich

Definition: Dock scheduling and carrier appointment management is the use of optimization and scheduling tools to automate carrier appointment scheduling and improve the overall use of shipping and receiving docks in distribution. In this system, a dock calendar is maintained showing all operating constraints, such as open/close time, commodities accepted through the dock door (for example, refrigerated or ambient) and trailer types accepted.



Carriers, customers and suppliers with pending shipments or receipt requests can query the system to determine available dock times. In the most-sophisticated optimization systems, these external queries are held together with load tenders and optimally assigned at a specified point based on maximum resource use. For example, if there is congestion during a particular period, then the system would not operate on a first-come, first-served appointment basis. Instead, the materials being delivered or shipped would be evaluated based on criticality or capacity to determine which appointments must be scheduled during the congested period, and which can be scheduled during alternative periods.

Position and Adoption Speed Justification: Scheduling functionality is a long-standing concern among many of the world's largest shippers. However, recent challenges in carrier capacity, increasing customer requirements around on-time shipment performance, and the effects of government mandates (such as hour of service rules that demand faster and more-consistent shipment turnaround) are driving more enterprises to evaluate this technology. In addition, a scheduling and appointment management system can be used in conjunction with constraint-based warehouse optimization to begin creating a supply chain execution model that moves more toward flow-through and cross-docking models.

Integration with warehouse management systems (WMSs), transportation management systems (TMSs) or yard management systems (YMSs) is becoming a more-important consideration, and vendors of these types of solutions are adding rudimentary, often Web-based, appointment requesting and dock door allocation. More-advanced solutions are emerging from the leading WMS vendors. Current models use portals to request appointments, but increasing acceptance and availability of mobile applications offer the potential to move this closer to the driver and mobile assets, as well as to add additional capabilities such as geo-fencing, wherein a GPS device notes when a truck is within a certain distance of the distribution center and the appointment can then be electronically confirmed.

User Advice: Users with capacity constraints in their yard or dock areas should evaluate this system. In addition, users that are capacity-constrained within the warehouse should evaluate dock scheduling and optimization as part of an overall flow-through system. Users with large numbers of unnecessary penalties for excessive dwell time caused by drivers having to wait for a dock should also look at these technologies.

Business Impact: Dock scheduling and carrier appointment management reduces the amount of administrative time required to set carrier appointments and manage the dock schedule. If managed properly, this approach can improve relations with an enterprise's carriers, customers and suppliers, because the system can be more responsive than manual processes. Finally, scheduling and appointment management can improve the overall throughput and capacity of a warehouse by optimizing appointments and activities, reduce operating labor costs by reducing idle time, and reduce transportation costs by increasing the number of cross-docking opportunities.




Sample Vendors: i2; Manhattan Associates; Oracle; RedPrairie

Recommended Reading: "Report Highlight for Market Trends: Transportation Management Systems, Worldwide, 2006-2011"





"Evaluating the Efficacy of TMSs as SaaS"



"Hype Cycle for Transportation, 2007"

Mobile (Wireless) Supply Chain Management Analysis By: Dwight Klappich

Definition: Mobile (wireless) supply chains represent the integration of radio frequency identification (RFID), Wi-Fi, Global Positioning System (GPS), vehicle connectivity, cellular phones and more to improve the effectiveness of distributed supply chains, logistics and distribution-related processes by automating data capture, communication and user activities. Supply chain management (SCM) mobility solutions will integrate the processing of tasks and activities by mobile workers with enterprise applications, as well as provide capabilities to capture data from, monitor and track mobile assets, such as trucks. Mobile (wireless) supply chains span multiple capabilities, such as providing mobile worker tools to access and share information, such as deliveries and delivery confirmations, or monitoring the location, condition or behavior of mobile assets, such as trucks.

Position and Adoption Speed Justification: Maximizing the effect of mobile/wireless technologies on the supply chain requires high levels of standardization and the redesign of business processes based on the unique needs of mobile people and assets, and a technology's capabilities, such as real-time data capture, input and distribution. Simply applying mobile technology (such as RFID) to established processes, however, is not likely to yield much return on investment (ROI). After much hype for using mobile/wireless technologies as the foundation for real-time SCM, most companies use the technology for location-focused services such as finding a specific vehicle.

Emerging mobile applications will use the capabilities offered by mobile technologies, such as GPS tracking or pulling data from the vehicle's engine computer to create new or enhanced business solutions that exploit these capabilities for added benefit. For example, GPS on a vehicle could be used to "geo-fence" a location such that a message to the facility is automatically generated when the vehicle is within a specified distance. Tools such as appointment scheduling could then use this information to automatically confirm an appointment.

Mobility solutions pulling data from onboard computers on trucks distributing that information using satellite communications are mature, but historically expensive. Newer solutions exploit less-expensive technologies, such as cellular, and are making the value of these solutions available to a much larger market. As such, the solutions built around the increased availability of information, such as automated hours of service or vehicle/driver performance based on vehicle activities (for example, idling or hard-stopping) are becoming more pervasive.

User Advice: Be realistic about the potential for mobile/wireless technologies to improve your SCM processes. Maximizing the value from mobile technologies will depend on an enterprise's ability to leverage real-time data in improved or new processes that include automated alerts and are based on consistent data communication standards. Develop a multiphase IT strategy that leverages mobile/wireless technologies' short-term potential, such as vehicle inventory management, and establishes an infrastructure to fully exploit a technology's long-term potential, such as automated appointment scheduling, or real-time routing and scheduling.



Business Impact: A mobile/wireless supply chain brings the real-time enterprise scenario closer to SCM, and although initial solutions will augment established processes with moderate benefits from automation, future generations of solutions will exploit mobility technologies to engineer new or significantly enhanced processes that add greater levels of value.




Sample Vendors: EDS; PeopleNet; Qualcomm; Rockwell; Sprint Nextel; Symbol; Turnpike Global Technologies; @Road

Sliding Into the Trough Cargo Portals Analysis By: Dwight Klappich

Definition: Cargo portals are Internet-based, protected Web sites that enable all partners in a transportation community to query maritime vessel operators or air cargo carriers for real-time space availability and pricing, to book shipments and to track the status of en-route cargo. The portal provides an expanded planning horizon and enables fast, corrective action when shipment milestones aren't met.

Position and Adoption Speed Justification: These portals will gain broad acceptance as the preferred method of obtaining end-to-end visibility into cargo carrier capacity, pricing, booking, en-route status reporting and exception management.

User Advice: Shippers that are part of an established shipping community should consider Web portal implementation to serve that entire community.

Business Impact: Cargo portals improve efficiency of important transportation functions, including space availability, order booking, supply chain tracking and exception alerts, reporting and management.




Sample Vendors: Ezycargo; Global Freight Exchange (GF-X); GT Nexus; Inttra; Unisys (Cargo Portal Services)

RFID in Government Analysis By: Jeff Vining

Definition: Radio frequency identification (RFID) is an automated data collection technology that uses radio frequency waves to transfer data between a reader and a tag to identify, track and locate an item. RFID does not necessarily require physical line of sight or contact between the reader and the tagged item. An RFID reader is an RF device that emits a signal through an antenna. This signal is received and responded to by the RFID tag. Readers come in various forms: A portal reads tags as they pass through it. A handheld reads tags in a portable manner. Mounted readers are affixed to mobile assets to communicate with tags.



Position and Adoption Speed Justification: Governments continue to hype RFID as an asset management tool that provides total visibility within a supply chain or as a chain-of-custody control and management tool for important documents. Toll payment and contactless cards have been in use for some time, while other applications are emerging for further use in the transportation conveyance system, such as proximity border cards. Various RFID applications will be found within government and defense organizations; however, there is minimal coordination among many of these organizations regarding these projects. Some governments are looking into RFID applications for identity and access control, or to improve the tracking of the food supply, as the Hawaii Department of Agriculture does. Some governments will be slower in adopting RFID-enabled management systems, and others will determine ways in which RFID is better than bar coding. Nevertheless, many operators of critical infrastructure and governments will use RFID for inspection identification or to track personnel at facilities and sites for security, audit and safety reasons. The costs are higher and will slow the adoption rate. Thus, look for sensory technology to intertwine with RFID tags to observe and communicate environmental conditions in large government sensor farms or at ports of entry, warehouses, data centers and public transportation.

User Advice: RFID requires an infrastructure beyond tag/reader that will require data storage and a network to facilitate performance. RFID-enabled projects can monitor high-value items or assets with long use cycles. Start with isolated examples where benefits can be measured and problems can be solved without affecting the entire organization's workflows. Because of the item-by-item nature of RFID, it is well-suited to progressive deployments or specific areas.

Business Impact: This will reduce work time and increase accuracy for tracking of assets, loss prevention, inventory management, logistics and traffic management. The impact will vary across government segments and regions as part of the logistics challenge, and to facilitate flows of public modes of transportation and the supply chain. Gartner expects that next-generation sensors will move from portable devices to fixed/wireless sensing technologies that interact with the mobile operator when they pass by sensors.




Sample Vendors: Alien Technology; Atmel; IBM; Savi Technology; Symbol Technologies; Texas Instruments; Unisys

Recommended Reading: "Report Highlight for Market Trends: Radio Frequency Identification, Worldwide, 2007-2012"

"Cool Communication Applications, 2007"

Transportation Industry RFID (Asset) Analysis By: Dwight Klappich; Tim Payne

Definition: Transportation radio frequency identification (RFID) solutions are specifically targeted at the tracking of carriers' mobile assets (not inventory) and returnable assets, such as carrier-owned containers, trailers and rail cars.

Position and Adoption Speed Justification: Expensive assets, such as tractors, trailers, locomotives, rail cars and cargo containers, have relatively long life spans. This enables amortization over a longer time frame, and makes RFID tagging, reader and antenna costs more affordable, relative to these items. In addition, assets that operate in a closed-loop supply chain



are ideal for tagging, and return on investment can be achieved in a relatively short time. Other mobile technologies using cellular technology, such as onboard devices and GPS, could offset advances in RFID for power units, because they can provide tracking in addition to other value-added capabilities.

User Advice: Carriers should monitor RFID deployment in this environment and deploy pilot projects of their own to understand what business advantage is available to them. A wide range of technologies (such as active, passive, Wi-Fi and battery-assisted) is available, and these solutions need to be matched to system requirements and performance characteristics. Tag and reader technology is more-robust, and the focus is switching to the middleware and applications that interpret the reads and provide the optimization capability in terms of positioning mobile assets in the right place and the right time.

Business Impact: This technology includes the ability to track and monitor expensive mobile assets, thereby reducing asset loss and maintenance costs. The visibility of inventory movement in the supply chain can be improved, which is an important secondary benefit for enterprises that can take advantage of that visibility to manage their operations.




Sample Vendors: Alien Technology; Check Point Software Technologies; GlobeRanger; IBM; Intermec Technologies; Manhattan Associates; Motorola; OATSystems; RedPrairie; SAMSys Technologies; Texas Instruments; TrenStar

Maintenance, Repair and Overhaul Analysis By: Kristian Steenstrup

Definition: These software systems support the maintenance, repair and overhaul (MRO) cycle of work — primarily for aircraft and other complex equipment. This software can be used for other transportation equipment, usually by a specialized third-party repair and maintenance company, but sometimes by the owner or operator. The scope of functionality is based closely on the enterprise asset management (EAM) software used in other industries, but with some specific, important differences. One distinction is in breadth, with the inclusion of a customer service and billing cycle. The suite needs to cater to external customers, from a scheduling perspective and from a billing perspective alike. Another difference is in functional "depth," because the software needs to deliver a very sophisticated level of detail in component hierarchy and dependencies, extending across the full component life cycle. There are many other differences from EAM in terminology, standard checks, compliance reporting and other areas of industry-specific functionality.

Position and Adoption Speed Justification: This technology is of great interest to airlines and equipment maintenance companies, because it is critical to keep expensive assets online and not down for repair, while continuing to fulfill high-reliability, compliance and regulatory reporting requirements. The term "MRO" was more prominent in the industry during the rise of low-cost airline operations and the wave of aircraft maintenance outsourcing. It is less prominent from a Hype Cycle perspective, as airlines consider MRO in the wider context of systems and as MRO operators look to full-suite ERP alternatives.

User Advice: An MRO system is a must if you are providing maintenance operations. Newer-generation systems are important if this is your business. Consideration needs to be given to the wider integration needs and the possibility of using broader-scope ERP suites for this function.



Business Impact: Operational efficiency is affected.



Maturity: Early mainstream

Sample Vendors: infoTRAK; IFS; Lawson Software; Mxi; Oracle; SAP

Recommended Reading: "The EAM Market Shows Growth and Consolidation"

Driver Load Matching Analysis By: Dwight Klappich

Definition: Driver load matching is the automated matching of remotely located vehicles, trailers and drivers, connecting them with the most-suitable loaded trailer for their next-day runs. It takes rules and constraints into consideration, and this information is typically communicated via wireless networks and in-cab PCs, or other mobile devices.

Position and Adoption Speed Justification: To date, this technology has been implemented by leading adopters with broad geographic service. Demand is growing, and rollout to many midsize truckers may be expected, probably in a hosted model. Operating efficiency and driver morale can be improved with this application, especially if drivers can return to their home bases with full loads more frequently. The painfully high turnover rate for drivers makes their retention a very high priority.

User Advice: This is a useful application for truckers with a broad geographic operating area. Given overall driver shortages and low retention rates, improved driver morale (and thus retention) can be as important as operating efficiency.

Business Impact: Driver load matching can lead to improvements in freight operations, client satisfaction and retention, dispatching, driver/operator communications and scheduling, and driver retention.




Sample Vendors: Direct Freight Services; OrderPro Logistics; Schneider National; Teletouch; TransCore

Fleet Vehicle Tracking Analysis By: Dwight Klappich

Definition: Fleet vehicle tracking enables trucking and railway companies to locate and track the movements of mobile assets in real time, using onboard sensors, and cellular or satellite links. Carriers can monitor exact tractor and trailer locations, engine performance, fuel state, hours of operation, maintenance problems, cargo temperature and tampering alerts. This is also an essential component in dynamic driver-load matching applications.

Position and Adoption Speed Justification: Vehicle-tracking systems require sophisticated communication devices and software that traditionally small and midsize carriers could not afford, but trends in mobile technologies are providing more cost-effective solutions that will enable



smaller users (five or more vehicles on the road) to adopt these types of capabilities. Early offerings were too costly to achieve mass penetration, but new low-cost solutions enable even small and midsize carriers' data analysis and driver feedback features. Capabilities such as GPS-enabled mobile devices and phones, along with lower-cost tools to connect to the vehicle, will enable more than just tracking, which will improve the business case and increase adoption.

User Advice: Smaller users should first consider buying or subscribing to commercial solutions focusing on functionality and cost alike, buying only what fits the business case. Larger organizations should consider newer, less-expensive commercial solutions, as well as developing their own tracking systems by buying and combining off-the-shelf technologies, instead of paying for costly subscription services from some traditional providers. Focus on integrating navigation data with logistics and asset management applications.

Operators should implement vehicle-tracking systems when the pain of empty loads, idle drivers, and "lost" tractors and trailers visibly affects customer satisfaction or operating efficiency.

Business Impact: Fleet operators may enhance their operations effectiveness, dispatching and routing processes, and security systems.




Sample Vendors: GPS Management Systems; IBM; Intermec Technologies; mTrack; NextBus; Outfitter Satellite; PeopleNet; Qualcomm; Squarerigger; Telogis; Trimble; Turnpike Global Technologies; @Road

Global Visibility for TMS Analysis By: Dwight Klappich

Definition: Global visibility for transportation management improves connectivity and visibility across facilities, multiple transportation modes, transportation providers, trading partners, suppliers, customers and, eventually, governments. Historically, track and trace functionality has given users the ability to trace individual shipments by shipment identification number over a specific leg of the itinerary. However, global visibility enables companies to track and trace international orders and shipments across the entire shipment itinerary, keyed by order or shipment number, as well as detect event-driven problems early and notify recipients of problems. While visibility is not restricted to international shipping, the complexity, cycle time and number of steps involved in international logistics make visibility more critical in these environments.

Position and Adoption Speed Justification: Event management applications are maturing, but data quality issues and connectivity to carriers and other constituencies — such as suppliers, forwarders, brokers and governments — remain difficult, although improving. Capturing movement information beyond large constituencies that are typically electronic data interchange (EDI)-enabled remains nascent. EDI continues to be the dominant way to connect with trading partners, but has limited worldwide adoption beyond large, sophisticated trading partners, such as ocean carriers and third-party logistics companies. However, many solutions now have simplified trading-partner portals that enable easier capture of data from less sophisticated or automated trading partners. Transportation visibility solutions first emerged as stand-alone applications built to pull information from multiple systems, but adoption of these systems was hampered by challenges in sourcing and maintaining data. Newer visibility tools are delivered as components of commercial transportation management software (TMS), and since the TMS



houses a high percentage of the needed data, adoption is accelerating. Stand-alone visibility solutions are becoming less competitive, though still desired by users that outsource transportation to a third party, or do not have or plan to have a TMS.

User Advice: Midsize to large international shippers (1,000 or more containers per year) in dynamic international logistics environments will benefit from improved visibility. Early adopters of stand-alone solutions should consider on-demand global visibility solutions, where upfront costs are minimized. TMS users should first consider the visibility solutions offered by their TMS provider, only considering stand-alone solutions if their TMS vendor lacks a visibility offering or if their offering is inadequate.

Business Impact: Given the increased risk of managing a global supply chain, visibility to potential problems is critical to managing global logistics operations effectively. However, visibility alone provides only incremental value, because although it can identify and diagnose problems, it cannot resolve them. The value of visibility increases when it is integrated with other applications, such as a TMS, where problems can be identified, diagnosed and resolved in a single environment.




Sample Vendors: Descartes Systems Group; GT Nexus; i2; Log-Net; Management Dynamics/BridgePoint; Oracle OTM; SAP; TradeBeam

Recommended Reading: "Magic Quadrant for Transportation Management Systems, 2007"

Traffic Data Services Analysis By: Thilo Koslowski

Definition: Traffic data services use historical, real-time (that is, from sensors) and/or predictive (that is, based on historical information) data regarding road conditions, flow of traffic and so on to provide routing guidance to drivers. Increasingly, companies are using actual driving information from vehicles and cell phones to determine traffic flow (floating car data). The information is used in applications, such as navigation solutions, to enable drivers to reach their destinations faster. Traffic data is typically broadcast using wireless technologies such as FM frequencies or wireless spectrums such as general packet radio service (GPRS).

Position and Adoption Speed Justification: Traffic data services have been available to the automotive industry for a long time in Europe (for example, the Trafficmaster service) and are emerging in North America and Asia/Pacific. However, only during the past two years have new data communication technologies and predictive modeling methods been developed. While traffic data services have the potential to create a positive experience for drivers, most applications have not yet developed a solid and reliable value proposition. The challenge is to leverage traffic data in the most meaningful way to influence consumers' driving decisions before they start to drive to a destination. The common consumer misconception is that the sheer availability of traffic information will lead to shorter driving times. In most cases, this is not the case. For example, rush-hour traffic often eliminates the availability of any alternative routes.

User Advice: Develop new applications that provide consistent value to consumers based on traffic data. Such new applications will use traffic information in a time management application context (for example, scheduling applications such as Outlook) to determine alternative meeting



times or driving strategies (perhaps suggesting that you leave the office 10 minutes earlier to arrive on time) based on predicted and real-time traffic flow.

Business Impact: Traffic data services and applications improve the utility of a vehicle beyond basic transportation and enable vehicle manufacturers to elevate the value of their products to customers.




Sample Vendors: Inrix; Traffic.com

Recommended Reading: "Navigation Evolution: Device-Independent and Services-Centric"

"Vehicle Navigation Must Evolve or Face Commoditization"

Wireless Supply Chain Analysis By: Thilo Koslowski

Definition: Wireless supply chains represent the integration of radio frequency identification (RFID), Wi-Fi, cellular phones and more to improve the effectiveness of supply chains, logistics and distribution-related processes by automating data capture, communication and activities.

Position and Adoption Speed Justification: Maximizing the effect of wireless technologies on the automotive supply chain requires higher levels of standardization and the redesign of business processes based on a technology's capabilities, such as real-time data input. Wireless technologies applied to current processes do not warrant required investments such as RFID. After much hype for using wireless technologies as the foundation for real-time supply chain management, most automotive companies use the technology for location-focused services such as finding a specific vehicle within a vehicle manufacturer's inventory, or for vehicle identification such as automated scanning for servicing at the dealership.

User Advice: Be realistic about the potential of wireless technologies to improve your supply chain processes. Maximizing the value from RFID technologies will depend on an enterprise's ability to leverage real-time data in improved or new processes that include automated alerts, and are based on consistent data communication standards. Develop a multiphase IT strategy that leverages wireless technologies' short-term potential, such as vehicle inventory management, and establishes an infrastructure to fully exploit a technology's long-term potential, such as automated parts identification and replenishment. In addition, enterprises must define the depth of identification that can be serialized per individual item, such as airbags, or be generic, such as simple replacement for a bar code.

Business Impact: A wireless supply chain brings the real-time enterprise scenario closer to the automotive industry, minimizes production bottlenecks and improves the industry's ability to address demand peaks.




Sample Vendors: EDS; Rockwell; Symbol



Recommended Reading: "Cost Cutting in Automotive Means Preparing for Uncertainty While Preserving Agility"

"How Manufacturers Can Leverage Wireless Technology"

Remote-Diagnostic Telematics Analysis By: Thilo Koslowski

Definition: Remote-diagnostic technologies provide the ability to deliver onboard vehicle-related performance and quality data to a central monitoring application.

Position and Adoption Speed Justification: Despite a clearly defined value proposition for end users, vendors and business partners in the automotive value chain, remote-diagnostic applications have yet to be deployed on a broad scale, especially outside the commercial vehicle segment. To realize potential benefits, such as cost savings, quality improvements and enhanced customer experiences, companies are carefully exploring their technology options and business models. The main challenge lies in developing and automating business processes that can take advantage of remote-diagnostic services. This will involve collaboration from vehicle manufacturers, major parts suppliers and the dealership-servicing network, which will take much organization, investment and a transformation of processes. Most recent initiatives for remote diagnostics have focused on prototype and launch vehicle testing efforts. The idea is to use remote-diagnostic technologies to capture and communicate telemetry data from the vehicle to the manufacturer's testing or quality center.

User Advice: Develop a business case for remote diagnostics that focuses on minimizing warranty costs, improving product quality and enhancing the customer's ownership experience throughout the vehicle product life cycle. Seek input and participation from multiple departments and value chain partners to maximize benefits. For example, dealerships should be involved to provide an optimized experience based on the benefits of remote diagnostics (that is, the dealer automatically orders replacement parts and schedules a service appointment based on information collected from the remote-diagnostic system).

Business Impact: Remote-diagnostic telematics improve vehicle quality, minimize warranty costs and, ultimately, can improve profit margins. They empower OEMs and dealers to maximize CRM potential, they accelerate and automate repair/maintenance scheduling and parts ordering with dealers and suppliers, and they improve the reporting of recurring mechanical vehicle problems to manufacturers, suppliers and institutions (for example, the Transportation Recall Enhancement, Accountability and Documentation Act). Furthermore, remote diagnostics can benefit manufacturers during the product testing phase and ensure high-quality reliability.



Maturity: Emerging

Sample Vendors: ADT; Cross Country Automotive Services; GE; Hughes Telematics; IBM; OnStar

Recommended Reading: "In-Vehicle Technologies Provide Differentiation Opportunities for U.S. Commercial Vehicle Manufacturers"



Climbing the Slope Fuel Management Analysis By: Dwight Klappich; Robert Goodwin; Cynthia Moore

Definition: Fuel management involves budgeting, contract management and inventory management systems, which ensure economical, timely and uninterrupted fuel supply.

Position and Adoption Speed Justification: Because fuel is one of the largest direct cost components of transportation organizations, fuel planning, logistics and optimization are key requirements to address supply, demand, cost and quality. Fuel production capacity and availability have been and will continue to be affected by weather (hurricanes), shipping problems (rail capacity) and shipping potential (pipe-line) and bulk transportation (rail/truck/barge) availability.

User Advice: Integrate fuel management into asset management models, use it in analyzing portfolio optimization and link it as an input or event into energy trading and risk management efforts and into enterprise risk management.

Business Impact: With exploding energy costs significantly affecting the transportation industry, more effectively managing, planning, budgeting and buying fuel and its use has become more strategically relevant to users in the transportation industry. Fuel management technology affects the supply chain, and its management (and energy trading and risk management) models are evolving to incorporate the influence of emission trading costs. Enhanced functionality can simulate and calculate detailed costs for fuel, purchased power, maintenance and emission allowance credits to optimize the financial impact on the enterprise and mitigate financial risk to the service provider that results from fuel supply and demand volatility, cost fluctuations and regulatory changes.



Maturity: Mature mainstream

Sample Vendors: SolArc (RightAngle); Sungard Energy (Energy Softworx); Ventyx

Recommended Reading: "Predicts 2006: Energy and Utilities' Outlook Shaped by Merging Market Forces"

Enterprise Asset Management Analysis By: Kristian Steenstrup

Definition: Enterprise asset management (EAM) consists of asset management, work management and materials management. Additionally, EAM datasets provide a platform for business intelligence applications that focus on asset management decision support, such as asset investment prioritization, that optimizes business value, minimizing the cost of support and the risk of failure. Asset management is a high-priority application for any asset-intensive business such as energy, utilities and manufacturing. EAM has specific processes and structures to support maintenance of plant, mobile and linear assets.

Position and Adoption Speed Justification: EAM vendors are enabling integration with other core applications, such as geographic information systems (GISs), data historians and condition-monitoring tools, to provide data that supports asset investment and maintenance decisions. In



addition, wireless and mobile EAM field applications are improving asset data management access in the field.

User Advice: Packaged EAM systems are becoming more prominent as functional breadth increases and companies move through software replacement cycles brought on by mergers, increased production goals or the difficulty of support for legacy systems. EAM integration with GISs and mobile devices via enterprise information management (EIM) is enabling data quality improvement and enforcing data management business processes as part of the EAM workflow. Utilities of all kinds should be planning the use of packaged EAM software for fixed or distributed assets.

Business Impact: Affected areas include materials management, field service, transmission and distribution field operations, engineering and asset management, and fleet management.




Sample Vendors: IBM Tivoli; Invensys; Mincom; Oracle; SAP; Ventyx

Recommended Reading: "Cost Cutting in Utilities Can Come From Better Asset Management"

"The Rise of the Machine in Enterprise Asset Management"

TMS Multimodal/Domestic Analysis By: Dwight Klappich

Definition: Transportation management system (TMS) multimodal domestic refers to TMSs intended for and used in a specific region or geography, such as North America or Western Europe. These are holistic solutions intended to manage domestic freight operations. TMSs are used to plan freight movements; perform freight rating and shipping across all modes (truck load, less than truck load, air, parcel, rail and intermodal); consolidate orders; select the appropriate route and carrier; communicate (tender) with carriers; and manage freight bills and payments. These systems are used for domestic freight operations, not international or global shipping.

Position and Adoption Speed Justification: Domestic multimodal TMS solutions are a mature market, first emerging in the early 1990s. However, until recently, penetration, was limited to large shippers (more than $100 million per year in freight spend), because of the high cost of TMS applications and the constrained benefits of more-narrowly focused applications. With expansion in the TMS footprint to now holistically cover most freight activities, from planning to execution to settlement, as well as more options for how users buy these types of solutions, the market has now expanded to include shippers from as little as $15 million per year in freight spend.

Although overall market adoption is estimated at slightly more than 20%, large shipper adoption is far higher, and smaller shipper adoption remains quite low, but is growing rapidly. It is evolving rapidly because of pent-up buyer demand and consideration of global shipping requirements by many enterprises. Although solutions are incomplete, they are maturing rapidly, and support for international shipping requirements is improving.

User Advice: Enterprises with more than $15 million in annual freight spend that spans multiple modes of transportation should consider using TMS, but they should be diligent in creating a business case and selecting solutions that fit their budgets. Larger shippers with $50 million or more in annual freight spend should consider these solutions as well, paying particular attention



to the breadth and depth of the TMS solutions being considered, with particular focus on the planning engines of these solutions.

Business Impact: Rising transportation costs, particularly rising fuel costs, combined with the need to manage freight operations cost-effectively and provide high customer service, make TMS almost a necessity for medium to large shippers. Cost reduction and payback are high, with most organizations finding less than 12-month return post-implementation.




Sample Vendors: Descartes Systems Group; HighJump Software; i2; Infor; JDA Software Group (Manugistics); LeanLogistics; Logility; Manhattan Associates; Oracle OTM; Precision Software a Division of QAD; RedPrairie; SAP; Sterling Commerce; Transplace

Recommended Reading: "A Self-Diagnostic Model for Building a TMS Business Case and Evaluating TMS Sourcing Options"





Commercial Telematics Analysis By: Thilo Koslowski

Definition: Commercial telematics are fleet- and trucking-segment-targeted automotive information and communication technologies/services. They enable networks between commercial vehicles/fleets and IT applications, with a focus on improving productivity and profitability.

Position and Adoption Speed Justification: Different IT and service vendors continue to improve functionality, back-end integration and business value for commercial telematics applications, which is leading to the growing penetration of such applications in the existing commercial fleet market (aftermarket). Vehicle manufacturers' efforts to develop factory-embedded commercial telematics applications are increasing more slowly than anticipated, primarily because of long product development cycles and difficulties in defining a viable business model for such offerings, especially subscription-based services. Fleet operators' expectations regarding the functionality of in-vehicle technologies have increased, and companies are expecting to pay less for such offerings. Countries in Europe are more advanced than the United States and most countries in Asia/Pacific regarding commercial telematics, primarily because of government involvement in monetizing commercial traffic (that is, road-charging initiatives).

User Advice: Communicate and market a clear value proposition: productivity improvements, cost savings and reduced risks for fleet managers (for example, via remote diagnostics). Establish partnerships with integrators to develop an effective telematics solution that ties into back-end logistic and fleet management applications. Explore opportunities to integrate with ERP systems, leveraging fleet-specific information.



Business Impact: Commercial telematics can provide improved asset management and profit margins for fleet operators. They represent a market opportunity for service and technology providers, and enable vehicle manufacturers (for example, truck makers) to offer improved options and, potentially, increase service revenue.




Sample Vendors: IBM; Qualcomm; T-Systems

Recommended Reading: "From Enlightenment to Mainstream: The Resurgence and Transformation of Telematics"

"In-Vehicle Technologies in Europe Present Opportunities and Challenges for Commercial Vehicle Manufacturers"

Multicarrier Parcel Manifesting Analysis By: Dwight Klappich

Definition: Multicarrier parcel manifesting enables companies to have agreements with multiple parcel carriers, while using a single technology tool to manage the relationships. This tool helps companies select the appropriate carrier, at the time of shipment, from among all contracted carriers, based on order characteristics (such as weight and dimensional properties) and delivery rules (such as delivery time and delivery zone), while considering the cost differentials of various carrier offerings. The tool also enables shippers to:

• Manage the creation of labels

• Create shipper manifests

• Provide status messages to customers or customer service representatives

• Manage carrier rates

Position and Adoption Speed Justification: Basic multicarrier parcel manifesting is a mature solution category, and most companies that need a solution have one, so many new decisions are driven based on technology obsolescence criteria. However, this market is undergoing change and we see new capabilities emerging as part of the stand-alone parcel solutions. Although multicarrier parcel manifesting is mature in distribution environments, many companies have large parcel operations in other areas of their businesses, or they are not traditional shippers, but have a large parcel shipping need. These environments might be found in sales groups, banks, financial institutions, insurance companies or universities, where the organization has many individuals shipping parcels, and the goal is to provide consistency and discipline to this process, as well as ensure that rules (such as select least cost carrier) are adhered to. Leveraging multiuser Web-based technologies enables distributed users to access a common system to ensure control. This market is nascent.

In addition, we find parcel capabilities becoming integrated with multimodal TMS, wherein parcel is one of the available mode choices, but the system can also look to consolidate parcel shipments to find less-costly shipping alternatives, such as combining multiple parcel shipments into one less-than-truckload (LTL) shipment, which would have lower total cost.



Developments continue in this area, such as technology renovation; footprint expansion to include more constraints, such as drivers and assets; and increased use of mobile technologies.

User Advice: Companies that ship individual packages using multiple parcel carriers and do not need multiple modes of transportation (full-truck, LTL, rail and ocean) should consider independent multicarrier parcel manifesting solutions. Shippers using warehouse management systems (WMSs) should look for integrated solutions with their current WMSs, while shippers using TMSs should evaluate parcel manifesting systems integrated with TMS products. Nondistribution users should focus on multiuser Web-based solutions designed for desk-top shipping or mailroom use.

Business Impact: Companies can lower parcel shipping costs and increase service levels with multicarrier parcel manifesting.


Market Penetration: More than 50% of target audience


Sample Vendors: Kewill Systems; Pitney Bowes; Precision Software a Subsidiary of QAD; UPS

Navigation Solutions Analysis By: Thilo Koslowski

Definition: Satellite navigation systems are based on the Global Positioning System (GPS), with applications in consumer and commercial markets. Satellite navigation systems are embedded in a vehicle, available as a portable unit (personal navigation device [PND]) and offered as an application in cellular phones, with an internal or external GPS antenna, or based on cellular tower or Wi-Fi-enabled triangulation (assisted GPS).

Position and Adoption Speed Justification: Market adoption for navigation solutions continues to grow steadily, primarily as a consequence of increasing consumer demand for PNDs. Emerging cellular-phone-based navigation solutions are offering alternatives for users and will further stimulate demand. Embedded satellite navigation solutions in vehicles are facing competition from portable solutions that are less costly and no longer tie navigation to a single vehicle. This will limit growth for embedded satellite navigation, and put significant price pressure on vehicle manufacturers and suppliers. Profit margins for traditional PND offerings are decreasing due to increased competition, although overall product demand continues to rise. Planned PND products that wirelessly connect to the Internet are needed to protect margins from this point on, and will provide innovation opportunities for PND manufacturers. However, cell-phone-based navigation offerings can also provide such functionality and do so by using consumers' existing data plans.

User Advice: Vehicle and device manufacturers must reduce prices for embedded and PND navigation solutions to compete with alternative platforms (that is, cellular phones), and market them as part of a complete telematics offering. Seek differentiation via partnerships and collaboration to offer added functionality in the form of dynamic, location-based services (for example, useful traffic information, buddy finders and enabling device integration).

Business Impact: Additional revenue streams are possible, especially with expanded feature sets and the potential integration of telematics services or location-based services that use Internet content.






Sample Vendors: Dash Navigation; Magellan; Nokia; OnStar; TomTom

Recommended Reading: "Dash Express Launch Could Disrupt Navigation Industry"

"Navigation Evolution: Device-Independent and Services-Centric"

Entering the Plateau Geographic Information Systems for Mapping, Visualization and Analytics Analysis By: Dwight Klappich

Definition: A geographic information system (GIS) is a series of computer-based technologies used for producing, organizing, analyzing and outputting spatial (geographical) data, as well as other associated textual, numeric and graphical data. GISs typically have capabilities for database management, mapping, image processing and statistical analysis that support the display and analysis of geographic information.

Because of the strong geographical nature of transportation and freight movements, which go from one geographic location to another, having the ability to view and analyze freight movements visually and geographically is important for spotting trends and visually monitoring current and historic activities. The analogy that a picture, or graphical representation, is worth 1,000 words is readily apparent in transportation, where highlighting data on a map can enable users to easily see things that might be harder to infer from reports and spreadsheets.

For example, displaying move density in a specific geography might reveal the appearance of movement bottlenecks more clearly than trying to infer a potential problem from the same data in a spreadsheet. Using GIS in a transportation context enables the visualization of freight operations on maps and, more importantly, provides analytical capabilities based on this geographical information. Because of the geographical nature of freight movements, it is common for daily routes and shipment plans to be displayed on maps but less common for historical information to be analyzed and displayed geographically.

Position and Adoption Speed Justification: Most TMSs provide basic mapping capabilities, but most are simply maps that are used to display planned routes and shipments that are overlaid on the map for visualizing the days activities. Although this may be acceptable for showing daily delivery and pick-up information, the use of geographical visualization and analysis is limited in most TMSs. Many transportation groups use other GIS tools for more analytical work, such as assessing lane density, traffic congestion, traffic problems (such as seasonal road construction) or other situations by geography.

Users might benefit from considering scenarios such as viewing daily congestion in certain areas so that shipments could be scheduled to avoid these locations at a particular time of day or viewing the density of deliveries in a particular area to determine whether there might be ways to better exploit combining deliveries. Although TMS vendors add enhanced reporting-centric performance management capabilities, we anticipate that some vendors will consider adding more GIS-based analytics, even going as far as considering simulation capabilities to make this analysis more predictive.

Initial GIS analytical solutions will focus on historical reporting and analysis; however, combining GIS with other information, such as weather reports, could provide additional management capabilities. Finally, systems that use GIS-based interfaces for interactions with the system,



rather than just reporting functions, could provide more-intuitive access to complicated business transactions, which would be a dramatic step forward in driving the adoption of this technology.

User Advice: For daily route visualization, use the functionality provided by your TMS provider. For more-GIS-based analytical capabilities, users must build their own solutions, at least for the near future.

Business Impact: Understanding geographical considerations in managing freight operations is necessary given the point-to-point nature of transportation.



Maturity: Embryonic

Sample Vendors: Descartes Systems Group; ESRI; Google Maps; i2; JDA Software Group; Manhattan Associates; Oracle Transportation Management; Pitney Bowes MapInfo; UPS Logistics Technologies

Revenue Management (Yield Management) Analysis By: Dwight Klappich

Definition: Revenue management delivers real-time computer-generated pricing decisions to reservation booking agents or directly to online consumers, to negotiate the best possible price from travel, transportation and hospitality clients based on the available inventory and the amount of time before the opportunity expires. This technology was first introduced by airlines, then adopted by large hotel chains. It is now being implemented by air, rail and maritime cargo carriers for their own pricing recommendations to shippers.

Position and Adoption Speed Justification: Leading air carriers have used this sophisticated application for years. It's well-recognized for adding value to carriers and hoteliers that can manage it. Revenue management offers an attractive market for application service providers (ASPs) and established revenue management consultants who understand the discipline.

User Advice: Midsize carriers and hoteliers should seek planning and implementation advice from revenue management consulting and service companies, and ensure expert oversight is immediately available in early implementations.

Business Impact: There is significant impact on operating margins, carriers' revenue per seat mile, and hoteliers' revenue per available hotel room. It is applicable for use by global distribution services, travel and hotel reservation providers, passenger online shopping and booking Web sites, and cargo carrier pricing and space-booking Web sites and portals.




Sample Vendors: Amadeus; Datalex; EasyRMS; Galileo International; Hotellinx Systems; IdeaS; ITA Software; Manugistics; Maxim Revenue Management Solutions; PROS Revenue Management; Sabre Holdings; Unisys; Worldspan

Transportation Routing and Scheduling Analysis By: Dwight Klappich



Definition: Transportation routing and scheduling software helps companies create truck/vehicle routes and schedules that meet delivery objectives at minimal cost and mileage. The software can create a repeatable schedule, or routes can be determined dynamically based on the input (orders), rules and constraints for meeting an objective, such as minimizing miles or cost. Shippers directly (private fleet) or indirectly (contract fleet) control the assets to be scheduled.

Position and Adoption Speed Justification: Transportation routing and scheduling is a mature market, and solutions have been evolving for almost 20 years. Vendors offer proven and mature applications for major geographies such as North America and Western Europe, while other markets are only partially covered either by local vendors or some of the established vendors. The market has consolidated considerably during the past year, and only a few dominant vendors of traditional routing and scheduling remain. However, there are numerous smaller or local providers that can provide rudimentary or custom-made solutions because the underlying planning algorithms have become partially commoditized. Nonetheless, the dominant vendors provide solutions with higher-quality fit and finish than many of these smaller solutions can provide. There are some changes under way as new entrants bring to market contemporary tools, and transportation management software (TMS) vendors add more routing and scheduling functionality to their multimodal TMS solutions. Outside of developing economies, most companies that have a fleet of any size (more than 10 vehicles) are using some form of routing and scheduling solution, so most new sales are replacement sales driven by technical obsolescence, sales to growing companies in emerging economies, or by the need for more-advanced capabilities such as linking to onboard devices for driver communication. Routing and scheduling emerged as stand-alone solutions focused exclusively on batch daily planning, but newer systems are extending the functional footprint to include more capabilities such as dynamic rerouting based on changing conditions, dispatching, driver management and mobile functions such as electronic signature or proof of delivery.

User Advice: Shippers that control the day-to-day operations directly or indirectly, and need planning tools to improve route and schedule creation, are prospects for these types of solutions. New or replacement buyers should focus more attention on the technical architectures of systems they are considering and should look at their needs beyond just planning.

Business Impact: These solutions create routes and schedules that minimize miles and costs. They meet delivery objectives by considering multiple constraints of the truck fleet, which, combined, help improve delivery performance and reduce delivery costs. With escalating fuel costs, improvements in routes can significantly affect fuel usage and, thus, reduce energy expenses.




Sample Vendors: Mobitrac; Ortec; Paragon Software Group; Quintiq; The Descartes Systems Group; UPS (Roadnet)



Appendixes

Figure 3. Hype Cycle for Transportation, 2007



Technology Trigger

Peak ofInflated



time

visibility



As of July 2007

Transportation Routingand Scheduling


Call Centers

Java Platform, Enterprise Edition

Less-Than-TruckloadPackage Tracking

IP Telephony

Strategic Network Design

Automated Manifest System

Fuel ManagementSupply Chain Analytics

Loyalty Marketing

CRM

TMS Multimodel/International

Digital Signage inTransportation

RFID (Case/Pallet)

Business Process Outsourcing



Micro Fuel CellsFleet Vehicle Tracking

Transportation Industry RFID (Asset)Cargo Portals

RFID (Item)Biometric Identity Documents

Financial Import and Export ManagementPassenger In-Flight Electronic Access

Software as a Service

RFID: Airline Baggage Tracking

RFID (Warehouse)

Commercial TelematicsAirline Self-Service Kiosks

Satellite Navigation Systems

Passenger ServicesRemote-Diagnostic Telematics


Multicarrier Parcel ManifestingMicrosoft .NET Application Platform

Technology Trigger

Peak ofInflated



time

visibility

Technology Trigger

Peak ofInflated



Technology Trigger

Peak ofInflated



time

visibility

time

visibility





As of July 2007

Transportation Routingand Scheduling


Call Centers

Java Platform, Enterprise Edition

Less-Than-TruckloadPackage Tracking

IP Telephony

Strategic Network Design

Automated Manifest System

Fuel ManagementSupply Chain Analytics

Loyalty Marketing

CRM

TMS Multimodel/International

Digital Signage inTransportation

RFID (Case/Pallet)

Business Process Outsourcing



Micro Fuel CellsFleet Vehicle Tracking

Transportation Industry RFID (Asset)Cargo Portals

RFID (Item)Biometric Identity Documents

Financial Import and Export ManagementPassenger In-Flight Electronic Access

Software as a Service

RFID: Airline Baggage Tracking

RFID (Warehouse)

Commercial TelematicsAirline Self-Service Kiosks

Satellite Navigation Systems

Passenger ServicesRemote-Diagnostic Telematics


Multicarrier Parcel ManifestingMicrosoft .NET Application Platform



Source: Gartner (July 2007)

Hype Cycle Phases, Benefit Ratings and Maturity Levels

Table 1. Hype Cycle Phases

Phase Definition

Technology Trigger A breakthrough, public demonstration, product launch or other event generates significant press and industry interest.

Peak of Inflated Expectations During this phase of overenthusiasm and unrealistic projections, a flurry of well-publicized activity by technology leaders results in some successes, but more failures, as the technology is pushed to its limits. The only enterprises making money are conference organizers and magazine publishers.

Trough of Disillusionment Because the technology does not live up to its overinflated expectations, it rapidly becomes unfashionable. Media interest wanes, except for a few cautionary tales.

Slope of Enlightenment Focused experimentation and solid hard work by an increasingly diverse range of organizations lead to a true understanding of the technology's applicability, risks and benefits. Commercial off-the-shelf methodologies and tools ease the development process.

Plateau of Productivity The real-world benefits of the technology are demonstrated and accepted. Tools and methodologies are increasingly stable as they enter their second and third generations. Growing numbers of organizations feel comfortable with the reduced level of risk; the rapid growth phase of adoption begins. Approximately 20% of the technology's target audience has adopted or is adopting the technology as it enters this phase.

Years to Mainstream Adoption The time required for the technology to reach the Plateau of Productivity.


Table 2. Benefit Ratings

Benefit Rating Definition

Transformational Enables new ways of doing business across industries that will result in major shifts in industry dynamics

High Enables new ways of performing horizontal or vertical processes that will result in significantly increased revenue or cost savings for an enterprise

Moderate Provides incremental improvements to established processes that will result in increased revenue or cost savings for an enterprise



Benefit Rating Definition

Low Slightly improves processes (for example, improved user experience) that will be difficult to translate into increased revenue or cost savings


Table 3. Maturity Levels

Maturity Level Status Products/Vendors

Embryonic • In labs • None

Emerging • Commercialization by vendors

• Pilots and deployments by industry leaders

• First generation • High price • Much customization

Adolescent • Maturing technology capabilities and process understanding

• Uptake beyond early adopters

• Second generation • Less customization

Early mainstream • Proven technology • Vendors, technology and

adoption rapidly evolving

• Third generation • More out of box • Methodologies

Mature mainstream • Robust technology • Not much evolution in

vendors or technology

• Several dominant vendors

Legacy • Not appropriate for new developments

• Cost of migration constrains replacement

• Maintenance revenue focus

Obsolete • Rarely used • Used/resale market only Source: Gartner (June 2008)

RECOMMENDED READING

"Understanding Gartner's Hype Cycles, 2008"

This research is part of a set of related research pieces. See "Gartner's Hype Cycle Special Report for 2008" for an overview.



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