design for small & micro road freight enterprise

Design for Small & Micro

Road Freight Enterprise

Liu JingService System Design

2014.09-2015.06

P 1 - 4

P 5 - 6

P 7 - 20

P 21-22

P 23-27

P 28-44

1 Background2 Methodology3 Research4 Co-design5 Case Study6 Service Desgin

discover define develop deliver

46.9 %production value

of service industry 38.5 %service provider

in service industry

2013China GDP

65%percent

2013employed population

in China

20%

equal relations

customer

service provider

service provider

customer

equal relations

planned economy

planned economymarket economy

market economy

P 1

BACKGROUND1

1 Background

Service Provider in ChinaIn 2013 China national GDP, the third Industry accounted for 46.9%, the first time exceeded the proportion of secondary industry; while the service sector employees has reached 296 million, accounting for 38.5% of total employment population, is the largest industrial employment. Put these two number together to see, we can know that service providers have created higher value than the average of creation of employment.

Relation between Service Provider and CustomerService providers as the main stakeholder in the service system, has a very important role. But in china, the service provider and the customer have unequal relationship, because the customer always thinks that “customer is the god”. Meanwhile, some service providers in some area have other eyes on customer. In conclusion, these two main stakeholder in china are in unequal relation, so this project wants to balance such situation.

SMRoad Freight Enterprise

All types of enterprises

76 %SM enterprise

<300 person

<20 million

staff

revenue

ServiceIndustry

Small and micro service

enterprises

Small and micro

enterprises

BACKGROUND

P 21 Background

Small & Micro enterprise in China"national small and micro enterprise development report" shows that until the end of 2013, there are15,278,400 totally enterprises, in which there are 11,698,700 small and micro enterprises, accounting for 76.57% of the all enterprises.

SM Service EnterpriseMix the small and micro enterprise with the service industry, we can get the idea of small and micro service enterprise. From the second half of 2010 by the impact of complex domestic and international economic situation, the development of SM service enterprises are facing a series of problems, such as rising labor costs, decreasing domestic demand and external demand, and so on.How to create better environment for the SM service enterprises to develop, is the aim of this project.

1980sthe rise of

individual transport

Unified Integration Individual Dispersion

≈ 7,100,000

≈ 2.5

SM road freight enterpriseroad freight

90 %Line Logistics

enterprise

each companyown trucks

P 3

BACKGROUND

1 Background

SM Road Freight EnterpriseAccording to incomplete statistics, if the entire road freight market can be seen as a huge iceberg, the SM road freight enterprise can be accounted for over 90%. SM road freight enterprises normally has less than 2.5 trucks for each company, so they have a limited scale and service quality.

Market StructureChina's road freight market structure experience changes after the 1980s, in which year China opens the market to the outside. With the rise of individual transport, the original plan-based market mechanism is broken, the whole transportation industry becomes disperse. Large-scale professional transportation companies have dispersed into many SM road freight enterprise.

Small & MicroRoad Freight Enterprise

disordered

poorsparse

small

Smiling Curve of Road Freight Market

expresslogistics zone

contract logisticstruck manufacturer

petroleum

goods ownerhighway

line logisticslogistics equipment

individual drivermaintenance shopSM road freight enterprise

BACKGROUND

P 41 Background

Main Features ofSM Road Freight EnterpriseSM road freight enterprise include the line logistcis and individual driver, which have small business scale and limited vehicle sources. According to some literature, the main features about the SM road freight enterprise mianly are “small,sparse,disor-dered and poor”. SM road freight enterprises mainly exists in different areas in the whole China, without unit organization department.

Continuous System of Service System

service

feedback

service

feedback

service

feedback

service

feedback

service

feedback

service

feedback

service

feedback

provider 1 provider 2 provider 3 ... ...user provider n

P 5

METHODOLOGY2

2 Methodology

design for service provider

improveenvironment

optimize experience

upgradeproviders’ level

improveservice quality

Service System Designfor Service Providermore service

requirements

more needsfrom serviceprovider

METHODOLOGY

P 62 Methodology

Service System Design forService ProviderDesigning for service providers is a sustainable process, providing the good experience to service provider and the customer together. With social innovation develops, every one can be the service provider and the customer together, when the one gets good service and experience, in turn the one can provide better service for others. In such continuous service system, people have mutual benefit between each other.

parking lot parking lotparking lot

4S store small maintenance shop4S store

freight information market freight information marketfreight information market

personal driver the third-party logisticstruck seller

Observation and Interview

Participant Observation

In-depth Interview

Stakeholder

Service Process Demand Analysis

Interaction Media

P 7

RESEARCH3

3 Research

Research Framework In this project, obeservation, interview, participant obervation and in-depth interview are used in the research process. Through the research, the stakeholder, the service process and the interaction media three parts of service system can be defined. Then, demands from the service provider can be concluded.

pick up goods in warehouse

Shanghai——Kunshan Jianhu——Panjin

the warehouseparking lot in Shanghai Baoshan

driving on the way driving on the waydriving on the way

driving on the way rest stationdeparture from Jiangsu

Various instruments unload in the destinationdriving on the way

RESEARCH

P 83 Research

Place

Method

Interviewee

Quantity

Huahuan FIM

Observe/Interview

Driver/Line logistics

3PL/Agency

25

Volvo 4S Store

Observe/Interview

Driver

Technician

3

Dongfeng Reseller

Observe/Interview

Salesman

3

Maintenance Point

Observe/Interview

Technician

3

Others

Tel-Interview/Online

Driver

Goods owner/3PL

12

Research ProcessThe research includes two parts:

Part 1. Interview research — through different ways to get some insights from the stakeholders. In the project, finally have interviewed 45 stakeholders.

Part 2. Participant research — taking two trips together with the drivers, observing the real experience in the whole process. Get the insights about the interaction media of the transportation process.

Mr HuangGoods Owner

45 years old

Small and medium sized companyFreight volumes are no more than fifty ton per timeOnly require basic delivery service

Small Logistics companies are his first choice when Mr Huang is choosing a logistics company, price is the most important thing compared with accuracy, efficiency and safety.

He prefers to build a long-term relationship with a specific logistics company, normally the contract will be resigned every 1 to 3 years. Once Huang has something to deliver, he directly call the logistics company or send goods to its warehouse. In other case, several logistics companies bid for the deal. In this way owners sacrifice efficiency to get lower prices.

There are many cases, long-term cooperation company has one price, when he needs to find social vehicles, he needs to do valuation by himself.

Sometimes thay do not sign, or sign with one responsible person (3PL or agency) the relevant contract, which involves the insurance of the goods.

Not use the network platform much, as much as possible to do business with acquaintances.

Only ask for very basic transportation service which almost every driver and logistics company can provide. Thus he is often price oriented. This leads to fierce price competition in the long-haul transportation market.

Their demands are unstable. Both destinations and departures may vary. “Wherever there is construction, there is my equipment should go, from Shanghai to Chengdu, Chengdu to Beijing, Beijing to Hangzhou, etc.” Besides, volumes are not constant either. Less than load trucking happens quite often.

Some cities don’t have freight information centers like Huahuan and online freight market is not widely used. They will spend much time on finding a company, comparing prices and bargaining. One deal was made at the price of 800 RMB while the first one asking for 1600 RMB 100% more than the final price. But a whole afternoon was the cost for saving 800 RMB.

Even though numerous drivers’ information is accessible to Mr Huang through freight information markets, he finds no references or records to support him to make a decision besides price, personal relationship and feelings. Besides, after drivers take goods and set out a journey, goods owners have no idea where their goods are. They cannot track their goods.

Persona Feature

Way of Delivery

Pricing Standard

Agreement

Network Mode

Price Oriented

Unstable demand

Time-consuming

Trust Vacancy

Persona Needs

P 9 3 Research

RESEARCHStakeholder

Main Stakeholder ResearchThe SM road freight system mianly includes three main stakeholders:

1. GOODS OWNERhaving the goods sources and requirments to transport the goods.

2. TRANSPORTERservice provider in such transportation system, mainly are individual driver and line logistics company, which seen as the SM road freight enterprise.

3. 3PLthe third party logistics company, including the logistics company and the agency together. They connect the goods sources and the transporter.

Wang has built up a certain circle of acquaintances in his hometown, while the goods owner can provide some fixed sources. Third-party logistics company sometimes provide some goods. Although fixed supply is fixed, also affected by the market situation, if the owner’s business is good, supply is good. But when the business is not good, Wang needs to run their own relationship to find sources of goods.

Most business are from acquaintances, just once time of cooperation, Wang will know whether there are opportunities for continued cooperation. Under the impact of the goods owner’s market, Wang needs to maintain good relations with the goods owner, such as on New Year holidays, he will take a visit to the goods owner

Wang’s goods sources are mainly from fixed goods owners, and usually are steel or instrument, which are not vulnerable to theft. Theft of goods in some areas is very serious, even life-threatening, Wang’s one friend came into such situation before.

Sometimes he will choose to transport special cargo, but special cargo such as dangerous goods transportation requires certification, such as flammable goods, etc. Transportation also has other pecial requirements, like must have two drivers with GPS. Of course, the payment is quite high.

Usually determined by mileage and type of goods and weight, according to the market, Wang talks with the agency, then the agency talks with the goods owner. If there is no intermediary participation, both driver and goods owner get more profit.

Transportation price will vary depending on whether it is return journey, often the return journey has lower price.

By offering goods owner the paper receipt from the goods receiver, drivers get paid through cash or through bank card payment. Sometimes encounter delays in payment, Wang can only pay time to deal with the goods owner. But the fixed goods owners have generally not repudiation.

There already is information application like "HCB", but the installation requires fees, but more cost-effective than the information center. But the overall feeling of Wang is not reliable, fear of false information, he feels more credible in face to face. Based on experience, Wang looks for more convinced sources from Information Center.

He bought a second-hand truck at the beginning when the goods supply was not fixed; after business is stable Wang buys new truck. Because of the high cost of the truck, Wang reconsider for a long time, such as how much load, how much goods supply each month, how much wages appropriate for the partner, etc.

Goods Sources

Goods Type

Transportation Price

Payment Mode

Network Mode

Operation Cost

Persona Feature

Mr WangIndividual Driver

32 years old

Graduated from high school 24-year-old began to learn driving, do a three-year apprenticeship Bought a 9.6 m truck after 5 yearsNow anchored at a third-party logistics company

Persona NeedsWang needs to weigh the "fuel cost" and "toll cost", choosing highway means high toll cost while going below means high fuel cost. At the same time due to its devastating environmental pollution, typically between 7: 00-22: 00 trucks are not allowed to enter the downtown area of the city. Choosing route also needs to consider regulatory policy, otherwise driver will be fined.

Wang is more concerned about security, this is a psychological vigilance that every driver should have. He will check the weather conditions before departure. He does not use GPS, more likely asks a friend for the route recommendation, which can sometimes escape police.

Upon arrival, as they are not familiar with the area, drviers could not find the source of goods through acquaintances circle, only resort to local logistics information center. Cost of each information center is different, between 100~300RMB.

Usually Wang has to wait 1-3 days, sometimes waits a little longer. In any case, Wang has to wait until there is goods before returning. Because the cost of toll and fuel makes the profit is very limited, if the return is still empty, plus the cost of return trip, there is no profit at all.

Sometimes return goods is far away from the parking lot, back and forth loading unloading will take a long time, also increase the costs. If driver encounters a fight cargo situation from many places, even worse.

After Wang knows the goods owner, he will leave his contact information, if transportation is satisfying, they can directly contact for next deal to avoid the agency.

Working hours for Chinese drivers are extremely long. For long-haul trucking, 2 drivers take turn to drive. When one is driving, the other is sleeping in the truck. It is normal for them to drive 8 hours continuously.

Because driver’s education is not high, Wang lacks of market sensitivity, it is difficult for him to develop into a large-scale logistics company. He lacks of experience of operation management, usually just relys on personal experience management, lacking of long-term planning and vision.

Sometimes the reason is that goods owner has more urgent goods sources than expected, while having to select overloading. Sometimes drivers will be caught and penalized, while 12 points deduction finished, the driver needs to learn again for new license.

To increase revenue, Wang had to choose overloading, but the damage to the vehicle and the security threat is very serious, such dangerous action just for the survival makes drivers helpless.

Route and Road

Empty Return

Fatigue driving

Short of Management

Overload Problem

P 103 Research

RESEARCHStakeholder

RESEARCHStakeholder

Mr GaoLine Logistics Company

42 years old

Owns 20 drivers and 10 vehivlesHas fixed customers, regularly Jiangsu-Dongbei routes8-9 years working experienceHas a special business license - road transportation permission

Line logistics company can get business more easily from the goods owners, which always are the fixed goods factory with whole trucks goods. Compared with individual drivers, Mr Gao has more stable goods sources, generally has transportation tasks every day.

Mostly tMr Gao has fixed routes or lines that they prefer. Sometimes go ”Everywhere” for more profit.

The trucks are owned by the company and Gao decides which one drivers should use. If a truck breaks down, the company tries to fix it themselves and but sometimes maintenance people come to the company’s parking lot to fix a truck.

The drivers hired are from the same hometown with Gao, who will be more trustable for the boss. Ad most of the drivers are familiar with each other before they work together, it saves time for them to communicate.

The payment of drivers include the base and performance payment based on the work performance. That means more work can get more money, so drivers also want return goods, even though the income of return goods finally belongs to Mr Gao.

During their trip, they need to keep all the receipts, such as the ones from the road tolls. They give them to their boss so that they can get the money back from him. The boss will in turn give the receipts to the transport buyer and charge them for the fees.

They find new customers through friends or they get contacted by companies. Most people do not trust the internet, there are some dishonest people in the business.

His company has offices in the cities his trucks go to. In each office he hires a manager to find goods in those locations.

Mr. Gao uses the internal communication system between the trucks to call his colleges. Such system can check the position of goods and drivers.

It can take 2-3 days to reach the destination, after that the boss need to find new goods for their return trip. It may take a few days and then the boss will pay for a hotel.

Management of Drivers

Persona Feature

Goods Sources

Payment Mode

Network Mode

Operation Cost

Persona Needs

Gao does not care much about the return goods, as even though drivers return with empty, he can also have some profit.

Sometimes the vehicle needs to be back in hurry as there is new business, so drivers have no choice but empty return. But the general situation is that, the return truck goods are from different places, which means that some goods are new and others may be called back with some problems.

It is annoying that such mixed goods can not be loaded at the same time that drivers need to wait for a long time.

Mr Gao usually will inform the drivers about goods receiver’s information before they leave the departure if there is new return goods. The main problem for Gao is that finding a good new return goods need time to call and reply again and again.

When the goods owners are someone that very trustable, drivers can spend less time at the destination and return as soon as possible.

Gao thinks that anyone can start working in the trucking business, no matter their background or education. In his opinion, this creates disorder and chaos within the business.

Logistics markets are getting crowded. Inferior companies are knocked out. Net profit rate decreases while net income increases. Firms offering only basic transportation service lose market share, replaced by professional integration logistics companies.

The owner/boss of the Logistic company pays the police 1000 rmb/moth to avoid fines for overloading.

It happens that the drivers get caught for overloading even tough their boss bribes the police, when they dothey get a mark in their driving licence. 12 marks = a suppressed driving licence. they feel pressure from theboss to overload.

Sometimes the needs of goods transportation is out of the ability of Gao, so he will try to contact some social vehicles. Gao use more freight information market than the website, and when he meets some new drivers who have good coopration, Gao will save the contact information.

He does not trust his drivers as he thinks some of them make money from gasoline.Meanwhile, different drivers have different skills and qualities, while good drivers are difficult to stay for long time.Gao needs to find new drivers more frequently than before.

Market Competition

Weak Legal Awareness

Truck Sources

Empty Return

Communication

P 11 3 Research

P 123 Research

Su’s husband goes out for goods owner, through social network to spread their business. They keep in touch with each other so that if goods owner needs turcks, Mrs Su can directly find social vehicle for them.

As the agency does not have their own trucks, they do not have much advantages in copeting with other 3PL or line logistics companies.

Directly take the information fees, usually such fees are paid by the transporter, which will be include in the transportaion fees.

Su needs to pay the rent of desk in freight information market, which is given to the owner of that market. Take the Huahuan Shanghai Market for example, agency will need to pay the rent year by year. For some markets that with better environment or facilities, agency need to pay higher.

Generally sign the order with transporter, then the final agreenment contract will be signed between the transporter and the goods owner.

Get freight information from the website and the app, after confirming, Su sells the information to some available drivers.

Su is facing competition wih other agency as well as 3PL. The ralation between agency and agency is a little bit unique, they are competitors and partners at the same time: if one agency has one goods info but not find a suitable truck, he/she can transfer this goods info to other agency friends. But after information has been shared, it will bring the next competition.

The agency has the same function with 3PL, that providing transportation services for goods owners, but do not have the vehicle by themselves. They can provide individual drivers with lower prices, but without high quality to ensure, that costs time for the agency persuade the goods owner to trust them.

Su has already created stable cooperation relations with some individual drivers, but there are many drivers choose to avoid the agency after they transport once time for the new goods owner. For the individual drivers and goods owners, eliminating the intermediate links means saving time and costs.

But for Mrs Su, she needs continiouly find new goods sources, which in turn can attract more individual drivers. This is a long-term process of mining.

Easily substituted

Mrs SuAgency

42 years old

The couple has one desk in the freight information marketThe husband finds the goods owner, and the wife finds the truckProvides freight information but no trucks

Persona Feature

Persona Needs

Mr MaThird-party Logistics Company

34 years old

Start with indivdual driver, then develop into 3PLNew company help big customer with logistics serviceHas the road transportation permission

Mr Ma directly contact with the factory, and his company is responsible for the logistics service of one district. Such goods sources are stable that the goods owner generally has fixed transportation requirements.

Meanwhile, one factory has many 3PL in cooperation, as different logistics companies take responsibilities of different districts, in which way they are in a relation of competition and cooperation.

Mr Ma already signs the contract with the factory, and in the contract they have the stable payment for the transportation service. Ma’s profit mainly comes from the price difference between the payment and the salary of drivers. If the factory wants to have the insurance, the 3PL will take care of that.

According to the transportation requirements, Ma makes the assignment of trucks: part of goods will be transported by his own trucks, and others will be taken by the known line logistics companies, then the left more will need to choose good indivdual drivers from the freight market.

Find the individual drivers from the freight information market or the online website. Ma has few worries about the theft phenomenon, in which drivers take away the goods.(this happens few years ago, now it is rare)

Sign agreenment with the factory and fixed line logistics company.

Starting trying to use website or APP to find individual drivers, Ma will keep vigilance.

Although with stable goods sources, Ma will also lose money when (affected by the market competition, sometimes Ma’s cost is more than the actual cost of transport services previously provided)

The market gets increasingly competitive, the goods owner has great fluctuations in requirements. Meanwhile the price is not fixed within the industry, sometimes the price is too low as the return trucks always give lower bidding price.

When the goods are suitable for whole trucks to transport, Ma can more easily find known line logistics company. But when the goods are just few, less than whole truck, the situation is getting complex, which means that 3PL needs to find good individual drivers as line logistics companies always refuse to take such task.

It will cost more time for Ma to find the situable driver and communicate with the line logistcis company.

Persona Feature

Persona Needs

Goods Sources

Profit Mode

Truck Sources

Agreement

Network Mode

Market Competition

Communication

Goods Sources

Profit Mode

Operation Cost

Agreenment

Network Mode

Market Competition

Goods ReceiverGoods receiver will receive the goods and check the quality, if the transportation is good, tranporter will get the receipt which will be given to the goods owner for payment.

Generally transporter will keep good relations with the goods receiver, while they arrive the destination, goods receiver may help them with unloading. Meanwhile the statements from the goods receiver will affect the continious cooperation between the transporter and the goods owner.

Small Maintenance ShopTrucks mainly needs take maintenance service after driving 1000 km, individual drivers would more likely take the small family-operating maintenance shop.

With the development of technology, the requirements of maintenance quality also increase, which makes the small miantenance shop face more competitive situation. Recently, more small maintenance shops get to invest more money to provide higher quality service and products.

4S StoreThe maintenance staff get training from Volvo every year in Beijing or Shanghai. Volvo tries to follow up with the owners after they have bought their truck to make sure that they are satisfied.

It is mainly big logistics companies that buy 4S service. They takes it as a longterm investment.There is a company that modify the Volvo trucks so that they fulfil the specific requirements for transporting dangerous goods and special goods.

Truck Seller

They mostly sell trucks to medium sized logistics companies or private drivers. The bigger logistics companies have too complex procedures so it takes too much time.

The competition is hard, they will listen to the companies’ requirements about size and tonnage, then they recommend the right truck for them. Meanwhile service for the truck users appear more important, such as financial service and logistics service, etc.

Freight Information MarketFIM provide place for the information trading between the transporter and the agency, without providing any freight information. The market just takes responsibility to manage the environment inside the market, they have the power to approve or refuse the user enter into the market.

FIM can also work with the online information platform, such existing online platforms are more popular in second-line cities, not in Shanghai: as in big cities, the goods sources are more complex, and the drivers are more flexible, it needs more time efficiency, which means the traditional face to face mode is better.

P 13 3 Research

Secondary Stakeholder ResearchIn the service system, also includes the secondary stakeholder, such as the truck seller, the FIM, the miantenance shop and so on.

RESEARCHStakeholder

Agency Individual Driver Line Logistics Company 3PL Goods Owner

Agency

Most agents compete against each other.

Some agents have family relations and then they cooperate or recommend new customers to each other.

The agency provides the driver with information about the goods, such as weight, type of goods, destination and size.

The agency provides drivers with the necessary contact information to both the goods receiver and provider.The agency arrange the contract between driver and transport buyer.

LLC pays an information fee to the agency for providing information about the goods and connecting them to the transport buyer.

If something is wrong, the driver will contact the agency.

When 3PL needs the social vehicles, they will go to ask the known agency for help.Mostly, agency will find the individual driver for the 3PL.

The big company will give goods to the 3PL, when smaller company gives to the agency to find suitable drivers.The agent also acts as a security for

direct business with the driver they use the agents who are easy to find if something happens. The agent arrange contracts between the transport buyers and the drivers.

Individual Driver

The driver pays an information fee to the agency for providing information about the goods and connecting them to the transport buyer.


There drivers compete for the goods.

Drivers that are friends help each other out, give advice on the best route.

They sometimes cooperate about bigger amounts of goods.

Not much relation, they are friends.

Individual driver can find goods soures from the 3PL or FIM.Drivers pay to 3PL to get transportation permission, meanwhile they find goods by themselves and also manage themselves.

They have communication. they prefer direct connection without agents. They agree on where to pick up the goods.The driver receives the goods owner’s contact details from the agent. The drivers sometimes help with loading the goods.

Line Logistics Company

LLC pays an information fee to the agency for providing information about the goods and connecting them to the transport buyer.


Not much relation, they are friends.

LLC works as a fleet, they are colleagues or friends,without competition, they spend a lot of time on truck with each other.

They cooperate with third-party logistics companies, get paid monthly in accordance with transportation amount.

No connection

Sometimes, LLC will help the goods owner to upload the goods as they are familiar.

3PL

Generally, 3PL has its stable goods owners and goods sources.

In rare situations, some small companies will need the agency to help find truck drivers or goods.

Individual drivers can put their information under the 3PL to get transportation permission.

3PL deliver some transportation tasks to l.ine logistics company.They may have some relations,such as relatives or have the same hometown.

The logistic companies can cooperate when they need to transport big amounts of goods.

They often have a fixed contract. The logistics company gets paid per month, up front, by the goods receiver or when they return with a receipt from the goods rreceiver. Trust is important, especially if there is a first time deal. The managers of the companies sign contracts, handle communication.

Goods OwnerIn rare situations, goods owners give the goods information to the agency, to find the transporter

Goods owner pays to the driver and wants to know the situation about goods.

No connectionThe goods owner sometimes has a fixed contract with the transport buyers.

No connection

Goods Receiver

Goods receiver gets information about goods and drivers from the agency.

Goods receiver wants to track the positions of drivers, and informs drivers about the destination place.

They do not have much connection, sometimes they need the drivers help to unload goods.

Goods receivers sign the receipt to confirm the transportation.

Small Maintenance

Shop

Individual driver would more likely go to the small maintenance shop for the lower cost.

Small maintenance shop provides service for many drivers that on the road.

When 3PL meet some small problems or emergency problems, they will go to the nearest small maintenance shop.

4S StoreWhen drivers come to bigger problems, they will go to 4S Stores.Sometimes they will buy some tools from 4S Stores as they also know how to fix.

Some 4s maintenance stores have a deal with the logistic companies so that they can get regular maintenance, but mostly they visit 4S stores when they have a major problems. Some logistic companies have their own maintenance people, so they just buy some parts from the 4s store.

Truck ResellerTruck reseller sells the truck to driver, they provide product and the service.The driver needs to pay 30% fees before.

The reseller sell trucks to the logistic company. They provide a warranty, after sales services and sometimes training for drivers. The reseller sometimes have some special payment agreements with the logistic companies.

FIM can provide the place online for the logistics company to advertise.

Meanwhile the 3PL can find the truckresources from the freight informationmarket.

Freight Information

Market

The freight market provides the agency with a platform for their business. They provide them with a stall and technology such as information screens, smart phone device, printer and access to their webpage.They charge month rent for the stalls.

FIM provides the platform for the drivers to get goods. It helps save the time and improve the efficiency.

Goods ReceiverSmall

Maintenance Shop

4S Store Truck ResellerFreight

Information Market

The agency arranges contracts for the goods receivers and the

The agency provides support and security if something goes wrong.

The agency pays a rent of year to the freight market.

They pay a deposit for the “smart phone device”.

Some agency rent apartments in the new freight market, they cost about 1000RMB/month in Shanghai.

The keeps in touch with the goods receiver during the trip.

They decide when and where to meet. The drivers usually help loading off the goods.

The drivers buy maintenence service from them. They prefer small maintenance sompanies because they are cheaper.

The drivers go to the 4S maintenance store if there is a big problem with their truck. If the drivers own an expensive and advanced truck they might prefer to go to the 4S store.

They buy their own trucks there.“Entrance fee 3 per person, inquiry fee 1.5 yuan a successful transaction costs 20 yuan a single order”

The driver helps to load off the goods. They often make friends with the fixed customers. The drivers sign a contract with the goods owners upon arrival to verify that they received the

The logistics company may have some contract with them regarding small maintenance problems.

The bigger logistics company usually has a contract with the 4S maintenance company.

They may go to buy trucks.

Most of them do not need to find the goods in FIM, because the third-party logistics companies have relatively fixed supply

Goods receivers sign the receipt to confirm the transportation.

When they meet some small problems or emergency problems, they will go to the nearest small maintenance shop.

3PL usually has a contract with the 4S maintenance company.

3PL goes to the reseller to buy trucks.

They may rent for a desk in the FIM to helpp company gets more business.

Goods receiver pay the goods, as the goods owner pay for the

Sometimes the goods owner and the goods receiver are the same company. Then no money is exchanged between the two.

Small company may send their own agencys go to FIM to find drivers.

No connection

The goods receiver has indirect contact with the frieght information market through the agency.

If one maintenance store cannot fix a problem, they will recommend another maintenance company that they know.

The small maintenance store buy parts from the 4S store. They compete with them regarding smaller maintenance services.

The 4S store sell parts to the smaller maintenance stores. They are in cooperation.

In competition, as resellers can also provide the maintenance service.

Competition.If they don’t have the truck that the customer whats to buy they recommend the 4S store.

Sometimes in cooperation, while other times in competition.

Big competition.

P 143 Research

User MatrixPut the connection between each stakeholder in the user matrix, and find the social network in the system. Meanwhile, the field research finds that social network has important role in the system, as many users prefers to do business with their friends in China.

Parking Lot Destination

Warehouse

empty

pick upon road

RESEARCHService Process

P 15 3 Research

Journey 1Shanghai — KunshanThe total distance is about 60 kilometers, and counting from leaving parking lot to returning to Shanghai, this journey takes seven hours totally.

P 163 Research

RESEARCHInteraction Media

depart fromShanghai

Shanghai — Kunshan

07:40

arrive atwarehouse

08:40

arrive inKunshan

10:18

constructionplant

10:56

lunch

11:40

return

12:40

arrive in Shanghai

14:50

a blue heavy-duty-truckweights 30 ton3.8m high32 tons of cargo

pick up goods

Li controls the truck by one hand with the other hand

holding the phone, happy in talking

and making jokes withother drivers

“we finished the work until 3am today, the boss call us to work at 7 again, I feel tired now”

no other hobbiesjust play cards

with driver friends in the truck

and other places

check the order to confirmreceiving address

suddenly stopat the highroadwhile he needs tohave a rest

offloading is finished by himselfwith the truck

“the business needs to

be connected with the world”

“use brain and mouth

to get the way”

work for live, live in Baoshan,

which is in bad environment

and dirty

usually, workers will leave

around 40 years old

meet with driver return back, Li asked him

how to arrive the destination

“always drive the truck in tiring situation, sometimes drove

more than 15 hours”

call another driver in same wayMr. Huang

call Mr. Huang

“Today is festival, change to

other highroad!”

Li confirm the order with the officer of their company which locates in Yangpu District

discuss with Mr.Huang

on how to evade

policemen in the way

tell Mr. Huangabout the way and ready for lunch

call smallmaintenance

discussing on machine oilof the truck and order

service

Virtual InteractionSocial Interaction

Physical Interaction

Before In After

Parking Lot DestinationFIM

Destination

Warehouse

Departure

pick up

mail the receipt

on road

on road

empty

empty pick up

search goods

area nearparking lot

area near destination

Journey 2Jianhu — Panjin

The total distance is about 1400 kilometers, and counting from leaving parking lot to arriving in Panjin, this journey takes 24 hours totally.


P 17 3 Research

P 183 Research


depart fromJianhu lunch dinner

go ontrip

go ontrip

gasolinestation

servicestation

05:30 14:0013:008:40 20:00 21:00 23:00

servicestation

01:00

arrive freightmarket

06:10

arrive inPanjin

07:00

ready toreturn

11:20

red heavy-duty-truckweighs 30 ton3.8 meters high38 tons of cargo

Mr.Lv drivesMr.Wangrests

Mr.WangdrivesMr.Lvrests

throwthe rubbishout of the window

Mr.Wang drivesMr.Lvrests

return back to find the new

correct way

workers in the factory know thedrivers andhelp offload

had breaddrinksmoke

park the truck in a visible placeto prevent steal

runs Hainan and Northeast China Line

Lv drivesmoke

cost almost 2000 RMB

buy Dongfeng dragon

recommendedby other friends

avoid high-roadtoll station

where we met two couplesthe wifeis usually a accompanyfor the husbanddriver

“we haveno restwe have tocontinueon the road”

go to check if there is return goods supply

when Lv met person they knewhe gave themcigarettesto say hello

Lv mentioned a driver friend was extorted here

discuss which line is more easy to go

his friend ask Lv to help bring truck accessories on his return trip

get a call for

new trip business

(from Jianhu)

Lv received a phone call

there are a number

of new goods in Jianhu

Lv called the agent at destination to inquire about return good supply

call from other driver of asking him about the road

call todriverwho

will arrive destination

withsame

goods

Before In After

Jianhu — PanjinVirtual InteractionSocial Interaction

Physical Interaction

the focus interaction in process

Vehicle maintenanceConfirm the vehicle statusFoodMap

Call for source of goodsCheck the weatherConfirm receiver’s address

Vehicle recommendationGet route suggestionSource from socail network

before — physical interaction before — virtual interaction before — social interaction

Fuel efficient of vehiclePoor environment in service siteDifficult to plan routeVarious billings

Pager chat with each otherContact return goodsSearch freight rates on Internet

Easily fatiguedWork with partnerWeak legal consciousnessDanger of theft

in — physical interaction in — virtual interaction in — social interaction

Long wait while unloading Deliver receipt to get moneyFreight information centerHeteropoly facility in parking lot

Contact to driver on same wayGive route recommendationsContinue to contact the agency

Connection with receiverConnection with agency

after — physical interaction after — virtual interaction after — social interaction

Interaction MediaIn participant observation process, the interaction media can be divided into three parts: before the service, in the service and after the service. The “pain point” can be found in the process, the next ideation process is based on this result.


P 19 3 Research

(info flow)(financial flow) (goods flow)

Direct Model Transfer Model Multi-transit model

3PL

1

2

A

B

C

Transporter

Goods Receiver

Goods Owner

1

A

B

Transporter

Goods Receiver

3PL

Agency

1

2

3

4

A

B

C

D

Transporter

Goods Receiver

Goods Owner Goods Owner

SM Road Freight Operation ModelIn conclusion, the transfer model is the most popular operation model in the SM road freight market. In such model, goods owner spends less time on searching transporter through the help from the 3PL. The transporter can have more profit than the multi-transit model. Based on such market custom, this service system design will improve the connection between the goods owner and the transporter.

P 203 Research


权衡“油费”和“路费”进行选择路线

走哪条线路也需要考虑地区的路规政策

不熟悉的地段无法通过熟人圈寻找到货源

直接避开中介

行业对于身体伤害大长久工作难

欠缺运营管理的经验企业发展缓慢

只能选择超载运输

短信和电话通知和沟通

货主方面找不到任何记录帮助他选择司机

沟通需要时间和成本

物流行业门槛低

对于政府政策不是很关心

驾驶员技术和服务有差别

行业人才流失率很高好的搭档比较难找

现有网络平台利用率不高

服务平台的体验缺乏信任

车辆维修保养必备技能防止中途状况

车友推荐车辆

很少提到环境问题生意大于环境

不太清楚省油和环保之间的关联

容易困乏疲劳驾驶待解决

卸货等候漫长无聊时间难打发

联系同路司机交流经验

查询天气

人脉关系网获取货源

路线建议盗窃危险

法律意识淡薄

停车场设施杂多但大都环境差

各种缴费单回执单纸质流程繁杂

规划路线难

与中介、收货方等处理好关系

网络查询运价

确认车辆状态是否熟悉车辆很重要

能否省油新手和老手有差

相互搭档传呼机相互聊天

P 21 4 Co-design

CO-DESIGN4User Insights

Demands of SM Road Freight Enterprise

Prepare

Safety Business Awareness

need to know vehicle performanceneed timely access to maintenance

need to prevent fatigue drivingneed to protect driving safety

need more sources of goods need to reduce waiting costs of return

need to master road route & trafficneed to save operating costs

need to have fuel-efficient technologyneed to enhance eco-driving awareness

need to enhance legal awarenessreasonably increase vehicle equipment

Vehicle Maintenance

Driving Experience

Security Defense

Business Strategy

Logistics Fee

Road Condition/Routes

Legal Services

Green and Fuel Efficient

Vehicle Brand

P 224 Co-design

CO-DESIGN

Co-design ProcessTo check the demands concluded from the research, this project makes one co-design with the stakeholders. Through inviting the drviers into the design process, using role playing tools, drivers provides the important feedback on what kind of things they really care.

User Demands

SM road freight enterprises have strong demands in three aspects: safety, business and awareness. As SM enterprises are in the developing process, they need more business, which shown from the co-design.

Co-design

Background

Marketing

Service Model

Business Model

investor

development

strength & weakness

target user

market positionstructure of case study

service form

main functions

profit model

P 23 5 Case study

CASE STUDY5

integrated serviceplatform

information platform

entity trading platform

Platform TypesCase Study Framework There already have service been provided for the SM road freight enterprises. There are mainly three types: information platform, entity trading platform and integrated service platform. This project will analyze the existing service platform, to find out the strength and weakness.

information platform

Background Marketing Service Model Business Model

investor

development

target user

market position

service form

main functions

profit model

2

13

P 245 Case study

CASE STUDY

Case 1WTW-WU TONG WANG Strength: Light asset management, broad and comprehensive information services, include road freight and express delivery information together. Improve the trustworthiness, bringing together a large user base and search volume. More attention attracts more sources of information, in snowball rolling way to make information more abundant.

Weakness: Website updates slow, easily lead to information redundancy, valid information is flooded. PPC prone to raise the cost of logistics, causing unhealthy competition between them, while WTW is not responsible for transactions manage-ment, making internet users within a mixed bag.

BEIJING WUTONG one internet technology company 1.SM road freight enterprises2.3PL3.Goods owner4.Logistics park

Creat the national information network, make the trucks find the goods, and the goods find the trucks.

WEB：http://www.chinawutong.com/Android app：http://m.chinawutong.com/PC：http://soft.chinawutong.com/

1.“WXT”Service fees for year.2. Fees for raising in the list（1RMB=10 points）3. Fees from advertisement position rent.

1.WXT Makes the potential customer find their needs, useful for the transporter and the goods owner, increase the trust between each side.

2.RankingWhen goods owners search the transporters, they can depend on the ranking of the transporters list.

3. Information SearchUsers can search the freight information from nation, the national area is the strength of WTW.

Starting from 2009, in 2014 have 34 stations in whole China, and the websites starts work online.

1. Safety Certification Huahuan will request the members to have certifiaction about identity, in order to maintain trust in the market mechanism.

2. Information self-check The transporter can search freight information directly on the self-service terminals, without walking in the market.

3. Electronic displayThe agency will upload goods information to Huahuan technology sector, which will eventually be displayed in their booth, the driver can see directly then find an agency to discuss.

4. Booth Transporter face to face communication with agency.

1

2

3

4

P 25 5 Case study

CASE STUDY

entity trading platform


investor

development

target user

market position

service form

main functions

profit modelHua huan freight transportation market Management, starts from one paking lot.

1.SM road freight enterprise2.3PL

Creat the offline information trading platform, making the trucks find the goods, and the goods find the trucks in a big trading market.

Offline trading center 1.Entrance fees“3 RMB per person, 1.5 RMB one time, 20 RMB for one successful order”2. Booth rental fees from the agency

Until the july in 2014, there are more than 900 booths in the market.

Case 2HUA HUAN

Strength: Through identity verification and market management, Huahuan maintains the stability of freight information market. Face to

face communication is more easy for the transporter and agency to adapt and

strengthen the authenticity of both parties.

Weakness: The management of entity trading platform consumes a lot of costs, while gathering too many vehicles also

affects the surrounding environment. Platform’s coverage is very limited, with

regional characteristics, it has not yet formed a nationwide information network. Face to

face negotiations enhance the credibility, but reducing the efficiency of the transaction, while the return journey waiting time cost has not been fundamentally improved, as

the driver still needs to wait agency.

P 265 Case study

CASE STUDY


investor

development

target user

market position

service form

main functions

profit model

Case 3“Highway Port ”Strength: Integrating online and offline synchronization of resources speeds up the efficiency of logistics and optimize the process. Providing one-stop service also improves service environment for the transporter and the 3PL. If this model gets promotion in many cities, may form a larger road freight network, fragmented freight market will be further consolidation.

Weakness: Relying on entity trading platform and a huge harbor area, this service is heavy assets. Because of many entity services, the difficulty of promoting road harbor mode increases. Although the integrated platform, this port model does not real creat the direct connection between the transporters and the goods owners, not yet solving fundamentally asymmetric information issues.

Starts from one logistics company from Zhejiang Province.

Be the connection between the transporter and the 3PL, with the system integration services, creating the whole national information network.

Base: Hangzhou Xiaoshan Economic Development ZoneWeb:http://www.tf56.com/site/front/index/index.htmlAPP: http://e.tf56.com/pc.html#xiazaiSoftware: http://e.tf56.com/pc.html#xiazai

1. The payment of 3PL warehouse rental fees 2. Rental of the area leased to small shops3. The registration fee

1. Information search on the website of the port.1. Trading floor providing face to face communication2. Facilities property provides convenient storage center for road freight3. Business package supports the hotel, etc.

There are nearly 4000 trucks into the port for goods.

integrated service platform

2

1

321

1.SM road freight enterprises2.3PL3.Goods owner

Use

r Nee

dsSe

rvic

e Fu

nctio

n



Function of Existing Platform Services




identity certificationranking

information search

information systeminfrustructure

business supporting

identity certificationinformation self-search

digital information shownagency service



Information Platform: WTW Entity Trading Platform: Huahuan Integrated Service Platform: Highway Port

TransporterAgency Goods owner

Integration

P 27 5 Case study

CASE STUDY

Case Study Result From the case study, it is found that the existing service, even though in different forms, they can fullfill some needs from the users. The existing service provides the successfull suggestions and the future potentions. In this project, the final service will based on such “integrated service” model, as it provides the integration.

Use

r Nee

dsS

ervi

ce F

unct

ion

Ser

vice

Pos

ition



Position of “New Service”




information systeminfrustructure

business supporting



Integrated Service Platform: Highway Port

21

3

4

“New Service”

improve driving safety of transporter

improve business of SM road freight enterprise

improve long-termawareness of transporter

Ena

blin

g D

esig

n

Ena

blin

g D

esig

n

Ena

blin

g D

esig

n

P 286 Service design

SERVICE DESIGN6

purpose

Pattern Language Method

observation ideationanalysis strategy

Ideation Inspired by the “pattern language method”, from purpose, observation,analysis, strategy to the ideation. Some good ideas are put forward.

Idea — Driving safety courseWhen the drivers become the members of the service, they can get the driving safety courses, to get some useful certifications.

Idea — Driving informationWhile driving, the vehicle can have some devices that deliver the important driving information for the drivers.

Idea — Freight information “push”Freight information like the routs, the goods resources and some paking lots information can be recommended.

P 29 6 Service design

SERVICE DESIGN

Idea — Driving quality certificationThe service can provide some certification for the good drivers, which may help inspire the higher service quality in the market.

Idea — Green freight certificationOnly green freight company can get some special business, which will push the bad company change its behaviour.

Idea — Green freight policyAs the government are also publishing some green policy, the service can cooperate with such policy.


SERVICE DESIGN

货 · H

Timely PushSources of Goods

运 · Y

Promote Safety Driving Technology

家 · J

Create Reliable Trading Environment

Product Supplier Technician Team Goods OwnerGovernment Support Property Management Reseller Shop

OrganizerTransporter Agency

main stakeholder

secondary stakeholder


SERVICE DESIGN

HYJ Service HUO YUN JIA provides the integrated service based on the existing freight market, and each chinese word stands for the features of the “HYJ” service:

HUO will push the SM road freight enterprises the goods resources, which based on their behaviours;

YUN will promote the safety driving technology of the enterprise, such as the HUD display and the safety course;

JIA will create reliable trading environment for the agency and the transporter cooperation in a base.

provides agency trading places and identity certification

provides transporter identity certification based on data

information synchronization, data analysis

Organizer Transporter

Web HUD

Agency

Information Service

Base Service

Push Information

Identity Certification

Safety Training

Information Trading

Analyze Data

Base


SERVICE DESIGN

HYJ Service HYJ mainly includes the information service and the base service:

Information service collect the drivng data, and push the goods information to the trnasporter.

Base service keeps the face to face social network, in a way to assist the information trading.

IdentityCertification

SafetyTraining

PushInformation

AnalyzeData

InformationTrading


SERVICE DESIGN

HYJ Service In HYJ, information service and the entity base service work together:

Starts from the identity certification, then service system will push the information to the transporter, then information trading in the base, meanwhile driving data are also collected, and finally HYJ provides personal safety training to the user, which will refresh the identity of the transporter.

System Map of HYJ Service

rent and authentication fees

Organizer

WEB HUD

Agency

information synchronization, data analysisProduct Supplier

Technician Team

Goods Owner

Government Support

Property Management

Reseller Shop

Transporter

material flowinfo flow

financial flowproduce device

information construction

rent

policy

rent place

rent

property management

provides transporter identity certification based on data

membership fees

provides agency trading places and identity certification

goods information

BASE


SERVICE DESIGN

before transportation

invisible

visible

on the way after transportation

organizer organizer organizeragency agency

real-time acquisition

real-time push

update

HUD

Tran

spor

ter

Ser

vice

Ser

vice

Pro

vide

rB

acks

tage

be a memberof HYJ

identitycertification

analyzedata

analyzedata

pushinformation

pushinformation

synchronizeinformation



collectdata

enterthe base

informationtrading

enterthe base

informationtrading

safetytraining

installHUD device

routerecommendation

source of goodsrecommendation

baserecommendation

service sitesinformation

get sourceof goods

get sourceof goods

upgrademembership

departureposition

destinationposition

booksource of goods

confirmsource of goods


Base need place, need to cooperate with relevant departments, government support is essential to establish a base

Establish an information platform needs to work with HUD and other equipment manufacturers, negotiating the lease or purchase

Also need to establish partnerships with existing bases in order to establish information flow between them for a national network

Build information and base platform, as the command center, serve transporters and third-party logistics, saving time costs for both

Prior to arrival, help drivers to quickly find a return business, and through data analysis, push the appropriate sources of information

Information system through the data identify outstanding transporter, provide higher quality transportation services for 3PL, saving time of selection

Collect the driving data and analyze it to push best information for transporters. The data is from user, then the information is given to user.it is kind of co-creation

Establish a good base, to provide high quality parking service, providing the trading place

Transporter - mainly individual driver, small and micro road freight enterprises

3PL - agency or third-party logistics companies, seen as freight forwarders

Cooperate with the existing base to establish the information platform on it

Integrated analysis of collected data is the core, needs a strong technical team to support

Information Service needs good promotion and operation to make important partnership

For the early stage, the large costs are mainly used in buliding information platform and user accumulationTo establish a base can rely on the existing base

Use information system to help enhance the information trading volume, we can charge a rent to the existing base of information technology

Baesd on the aggregate amount of certain user, charge membership fees from new entrants withno information fees

conduct user-test and get feedback from users

HUD Producer

Cooperatewith existing base




GovernmentSupport

Business model canvas: HYJ Service

Technical team

Operations Team


SERVICE DESIGN


SERVICE DESIGN

Touch Point In HYJ, the transporters can directly get information from the HUD display, which is more safe than the normal display, as drivers do not need to yield.

HYJ service provides the gesture and voice interaction for the driver, to keep the safety while they are driving.


SERVICE DESIGN

Touch PointHUD DISPLAY


SERVICE DESIGN

HYJ Service —— IQ Map

Stakeholders:

T+ATransporter + Agency Transporter + Organizer Agency + Organizer

T+O A+O

social tie strength +

relationalintensity +

social tie strength -

relationalintensity -

T+O

A+O

T+A1

T+A1

2

T+O

2

3


SERVICE DESIGN

Enabling System of HYJInteraction QualityCompared with the existing service “Highway Port”, the HYJ provides more connection between the transporter and the organizer, increasing the relational intensity; meanwhile the agency and the trnasporter have more weak social tie.

active

HYJ Service —— PI Map

+

collaborative collaborative- +

active -

Stakeholders:

T+ATransporter + Agency Transporter + Organizer Agency + Organizer

T+A

T+O

T+O

A+O

A+O1

2

T+O2

3


SERVICE DESIGN

Enabling System of HYJParticipant InteractionHYJ service improves the participant of the transporter, more activities will happen between the transporter and the organizer. Such as the identity certification, and the safety driving courses.

THANKS!

design for small & micro road freight enterprise

Documents