PowerPoint Presentation

Crowdsourcing and Collaborative Warehousing & LogisticsJennifer Pazour Assistant Professor, Industrial & Systems Engineering, Rensselaer Polytechnic InstituteKarl SiebrechtCEO, FLEXE, IncBrett SpectorDirector, North America Channel Sales, Iron MountainBrett Parker President & Co-Founder, Cargomatic

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Bringing the Sharing Economy to Less than Truckload Shipping

Case Study: Technology-enabled Collaborative Warehousing

Session Agenda & Introductions

Jennifer Pazour Karl SiebrechtBrett ParkerPresident & Co-Founder, CargomaticBrett SpectorCrowdsourcing and Collaborative Warehousing and LogisticsQuestions and Answers SessionAssistant Professor, Industrial & Systems EngineeringCEO, FLEXE, IncDirector North America Channel SalesIron Mountain

DefinitionsCompetitive LandscapeCompare and Contrast with Traditional Business Models

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3The On-Demand EconomyOn-Demand Systems:

Business model that matches supply resources to demand requests on demand.

Crowdsourced Systems, Sharing Economy, Gig Economy, On-Demand Peer-to-Peer (P2P) Systems:

When the demand requests are fulfilled by peers, the resources are owned by independent users. Crowdsourced Logistics Systems:

A business model for the movement and storage of goods that matches independent supply resources (warehouse space, truck space, delivery services) to demand requests on demand.

Crowdsourced Logistics Systems4Last Mile Delivery (from * to customer)Short-Haul Delivery (B2B)Long-Haul (City-to-City) DeliveryMovement of Goods: CrowdshippingStorage of Goods

*Grocery Stores*restaurant take-out

Individual Courier Services

(from customer to *)*Retailers (malls)

Shipping Containers (Country-to-Country)

Emergency Response

ALAN: Coordination of resources donated from the private sector.Marketplace that matches logistics business capabilities with the expressed needs of communities and relief agencies in response to a disaster.

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(some) Characteristics of Crowdsourced Logistics SystemsIndependent Freelance Users Control Supply ResourcesSupply resources are not owned or employed by an organization. These independent freelance users have control over access to their resources. Open Market or Open CrowdSupply resources originate from a crowd of independent users, and membership to the crowd typically has low barrier to entry.Online-to-Offline Supply resources and demand requests are matched online using a computer application, often on a smart phone, but the logistics service is performed offline (physical transport or storage of goods). Visibility RequiredUtilizes technology platforms to provide visibility into untapped underused capacity, as well as a large reach for demand requests. This results in potential asset utilization increases. 5

Allows for fluidity of use, which is in contrast to large asset-based carriers

Unlocking underutilized capacity with technology.

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Compare and Contrast Traditional Business ModelCrowdsourced Logistics Systems6

For example:

For example: Incentives & ControlSupply ResourcesDecision MakingNetwork

Supply Resources (Assets)Traditional Business ModelA single company owns or contracts resources.Results in a relatively fixed capacity. Given demand variability, companies either have extra capacity, or have customers wait.

Crowdsourced Logistics SystemsThe P2P system owns no assets. A crowd of independent freelancers provides access to their resources. Leads to the ability to scale capacity up/down, dynamically adjusting capacity to meet demand. 7

Low to no fixed costs

Supply resources are under the companies control and known. Goal is to match unknown demand requests with resources.A company can take a systematic perspective to the allocation of their resources. Incentives, Control, & Decision MakingTraditional Business ModelCrowdsourced Logistics SystemsBoth suppliers of and demand for resources are users. Both supply and demand are unknown and not in the companys direct control. Facilitates matching of decentralized entities.Need incentives to attract both supply and demand; current incentives are flexibility8

An incentive for supply in these systems is flexibility and control.

Elastic Supply Chain NetworkMany-to-Many ConfigurationInfinite ParticipantsInfinite Transfer PointsInfinite Pickup/Delivery LocationsMore complex operations (e.g., transactions, authentication)Sharing results in the ability to be closer to the end customerPotential for adaptable and resilent supply chains

Static Supply Chain Network Few-to-Many ConfigurationFinite Participants Finite Transfer Points Finite Entry PointsOperational protocols are entity-basedSecurity is based on authenticated entities (personell and facilities)Can lead to rigid, expensive (e.g. last mile) supply chainsSupply Chain NetworkTraditional Business ModelCrowdsourced Logistics Systems9

Incentives & Control

Compare and Contrast the Logistics Systems A single company owns or contracts resources. Given a fixed capacity, demand variability results in either having extra capacity, or having customers wait.

Supply Resources are under the companies control and known. Goal is to match unknown demand requests with resources.

Top-Down, centralized decision making via a single entity.Systematic allocation of resources possible.

Static Supply Chain Network Few-to-Many ConfigurationFinite Participants/Transfer Points/Entry Points Simplifies TransactionsCan lead to rigid, hard to adapt, supply chains The P2P system owns no assets, instead a crowd of independent freelancers provides access to their resources. Ability to dynamically adjust capacity to meet demand.

Both suppliers of and demand for resources are users. Both supply and demand are unknown. Need incentives to attract supply and demand. An incentive for supply in these systems is flexibility and control.

Decentralized Decision Making of Freelance Users (facilitation usually done systematically by a 3rd Party)

Elastic Supply Chain NetworkMany-to-Many ConfigurationMore complex operationsSharing results in the ability to be closer to the end customerPotential for adaptable and resilent supply chains

Traditional Business ModelCrowdsourced Logistics SystemsSupply ResourcesDecision MakingNetwork

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Case Study: Technology-enabled Collaborative Warehousing

Brett Spector, Director, North America Channel Sales, Iron MountainKarl Siebrecht, CEO, FLEXE, Inc

Unexpected returns, recalls, supply chain disruptions

Competing with Amazons delivery promise

Seasonal inventory swings or promotionsHow best to manage?Fundamental problem: warehouses are static, businesses are dynamicFixed, long-term leases are mismatch for dynamic inventory & high or uncertain growth

High fixed & committed costs

Often too much or too little capacity

Difficult and expensive to change plans

Implications:

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75%REPORT SIGNIFICANT INVENTORY FLUCTUATIONS THROUGHOUT THE YEAR

70%HAVE NO SOLUTION FOR OVER-CAPACITY AND ACCEPT IT AS SUNK COSTS