Freight Technology Assessment Tool

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Freight Technology Assessment Tool
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Agenda

• Background
• Freight Technology Assessment Tool
• Methodology
• Processes
• Performance Measures
• Technology Benefits Costs
• Output
• Applying FTAT Motor Carrier Efficiency Study
• Questions

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Background Why DOT?

• Creation of Public Private Partnerships
  Government is a facilitator or convener of groups
  of stakeholders
• Ability to provide research and development
  funding (seed money)
• Neutral party with interest in success of overall
  transportation network
• Government Participation
• Highway systems are at capacity today in many
  urban areas
• Freight forecasted to double by Year 2020
• Promotion of new technologies to increase the
  efficient flow of freight.

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Background Opportunity
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Background Goals

• Reduce congestion Promote the exchange of
  information between public and private
  organizations.
• Improve efficiency Projects that promote timely
  and useful information exchange between supply
  chain partners.
• Enhance safety and security Projects that
  ensure that critical information is captured and
  disseminated to the appropriate facilities and
  organizations.

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Freight Technology Assessment Tool

• Developed in 2004-2005 for FHWA
• Project Objective Provide a tool that allows
  the users to evaluate the effects of deploying a
  technology.
• Utilizes a qualitative and a quantitative
  approach
• Qualitative analysis Rating the technologys
  effects on a set of predefined performance
  metrics
• Quantitative analysis benefit cost analysis
  based on a set of pre-defined cost drivers

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Freight Technology Assessment ToolFTAT
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FTAT Methodology

• Input
• Define the supply-chain
• Performance metrics
• Cost drivers
• The technologies or best practices
• The technology effect for each performance metric
  
• The benefits and costs for each technology
• Output
• The benefit/cost ratio, plus other financial
  measures, are computed for each technology
• The technologies score

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FTAT Methodology
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FTAT Methodology
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FTAT Processes

• Defining and mapping the supply-chain
• Option 1 Define new processes.
• Option 2 Select supply-chain processes (SCOR
  processes)
• Supply Chain partners are defined on a
  geographical map and processes are
  defined/selected for each partner
• SC Partner (level 1 view) describes the various
  entities participating in the supply chain (ie
  company, facility, organizational unit)
• Process Defined at two levels (levels 2 and 3).
  They represent the activities and transactions
  that each partner performs to move goods through
  the supply chain. Level 3 is a decomposition of
  Level 2.
• The as is cost for each process and the process
  as is cost driver

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FTAT Processes Supply Chain
Level 1
Level 2
Level 3
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FTAT Processes
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FTAT Processes
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FTAT Cost Drivers

• A characteristic that drives the changes in cost
  level
• Example Order Processing
• Cost Drivers Number of Orders Time per Order
• Uses of Cost drivers Compute process improvement
  component of a certain technology

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FTAT Cost Drivers
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FTAT Performance Measures

• Seven performance attributes
• Reliability
• Responsiveness
• Flexibility
• Cost
• Asset Management
• Safety
• Security

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FTAT Performance Measures

• Each performance attribute includes a set of
  performance metrics, for example
• Transportation lead time
• Order fulfillment lead time
• shipments received damage free
• schedules changed within lead time
• Shipment Security
• shipments visible/traceable during
  transportation
• Cash to cash cycle time

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FTAT Performance Measures
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FTAT Technologies

• Costs of technology are the total amount of money
  invested to realize, implement, and sustain a
  supply chain technology
• Benefits of a technology are the positive
  monetary gains on the supply chain, including
• Cost savings resulting from improving processes
• Cost savings resulting from eliminating processes
• Reduction or elimination of miscellaneous costs
  such as customs fees, pilferage, etc.

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FTAT Technologies
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FTAT Technologies
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FTAT Technologies
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FTAT Technologies
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FTAT Technologies
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FTAT Analysis

• Quality Function Deployment - QFD is a
  qualitative analysis technique that can be
  utilized to motivate organizations to focus on
  their most critical needs. It is a methodology
  for taking the input of numerous stakeholders and
  using that information to drive the decision
  making process.
• Benefit Cost Analysis - a quantitative analysis
  technique that evaluates the monetary benefits of
  a set of technology projects versus their
  associated costs (NPV, BCR, IRR, etc.).

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FTAT Analysis
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FTAT Output
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Applying FTAT Motor Carrier Efficiency Study

• MCES Directed by SAFETEA-LU Section 5503
• Major Study Components
• Identify high-priority motor carrier
  inefficiencies
• Examine the application of wireless technology to
  provide needed capabilities
• Perform hypothetical benefit-cost analysis
• Progress to Date
• Defined supply chain segments
• Identified process-specific inefficiencies
• Captured data to define effects of inefficiencies
• Will use FTAT to Perform Preliminary B/C Analyses
• 10 Scenarios
• Various trucking operations and trip types

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Applying FTATMotor Carrier Efficiency Study
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Applying FTATMotor Carrier Efficiency Study
Level 2 Process Depiction
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Applying FTATMotor Carrier Efficiency Study
Level 2 Allocation of Inefficiencies
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Applying FTAT Motor Carrier Efficiency Study
Specific Inefficiency Effects
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Applying FTATMotor Carrier Efficiency Study
Level 3 Subprocess Depiction
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Applying FTATMotor Carrier Efficiency Study
1. Input specific data regarding current activity
results, duration, and costs
Using FTAT
2. Identify likely individual changes to activity
results, duration, and costs, at the subprocess
level
5. Examine changes to overall bottom line,
including performance enhancements and costs
4. Execute calculations within FTAT
3. Input anticipated implementation and use costs
for technology and process changes
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Applying FTATMotor Carrier Efficiency Study

• The MCES FTAT Analysis Results Will
• Clarify Opportunities
• Better define specific sources of inefficiencies
• Quantify and qualify potential benefits
• Enhance Knowledge
• Consolidate information from multiple sources
• Provide numerical evidence
• Facilitate Decision-Making
• Provide means for comparative analysis
• Provide basis for selecting Phase II pilot
  projects

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Questions/Discussion
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User Guide
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Contact Information

• Randy Butler FHWA
• randy.butler_at_dot.gov
• 202.366.9215
• Paul Belella Delcan
• pbelella_at_delcan.com
• 703.752.6060 X 104
• Nathan Rychlik Productivity Apex, Inc.
• nrychlik_at_productivityapex.com
• 407.384.0800