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Mid-America Transportation Center Fall Lecture Series Technology at Werner 1 Tom Clements [email protected]

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MATC Fall 2012 Lecture Series

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Page 1: MATC Fall Lecture Series: Tom Clements

Mid-America Transportation Center Fall Lecture Series

Technology at Werner

1

Tom [email protected]

Page 2: MATC Fall Lecture Series: Tom Clements

COMPANY PROFILE

2

2011 Revenue: $2 billion 2011 Net Income: $103 million

NASDAQ: WERN Alliance Carriers: 8,500

Trucks: 7,300 Trailers: 23,165

Premium provider of transportation and logistics services, specializing in Truckload, Intermodal, LTL, Ocean and Air services.

Page 3: MATC Fall Lecture Series: Tom Clements

RECOGNIZED LEADER

3

2012, 2011, 2010, 2009

Page 4: MATC Fall Lecture Series: Tom Clements

THE STRENGTH OF WERNER

4

Global, Comprehensiv

e Portfolio

Award-Winning Customer Service

Technology Driven

Customizable Logistics Strategies

Consistent, Credible and Conservative

Page 5: MATC Fall Lecture Series: Tom Clements

COMPREHENSIVE SOLUTIONS

5

Werner offers complete 3PL supply

chain solutions across all shipping modes

and geographies, from network design

through implementation.

Freight Management

With a network of 7,300 trucks, 8,500 alliance carriers and ocean, air and rail providers, we offer

unsurpassed delivery solutions worldwide.

Freight Movement

Providing door-to-door services for

companies of all sizes and industries as they

compete in today’s global marketplace is what sets us apart.

Global Implementation

Our tools provide customers instant

visibility across their supply chain, which allows them to better

manage their business.

Technological Advantages

Page 6: MATC Fall Lecture Series: Tom Clements

THE PATH OF WERNER PROGRESS

6

1980• Deregulation

1986• IPO

1992• GPS on all trucks• Dedicated, Regional

and TC fleets formed

1998• Electronic driver

logs (EOBR)

1999• Mexico launch• Canada designated

fleet formed

2003• Brokerage and

Intermodal expansion

2006• Werner Global Logistics

formed• China launch

2007• LH fleet reduction

2009• Safety improvement initiative• Australia launch

2008• Fuel MPG initiative• Balanced portfolio

initiative

1956• Founded by

C.L. Werner

Page 7: MATC Fall Lecture Series: Tom Clements

TECHNOLOGY AREAS

7

Werner leverages many technological

advances to improve equipment

performance and reduce diesel fuel

consumption.

Equipment / Fuel

Werner has long been the leader in using

technology to ensure compliance and safety within the

federally regulated trucking industry.

Regulation

Trucking may be simple, but Werner's

complex systems provide a competitive

advantage over others in the industry.

Systems

Our tools enable our customers to leverage

our experience and technological

investments to manage their transportation

network.

BI / GIS / Analysis

Page 8: MATC Fall Lecture Series: Tom Clements

ENVIRONMENTAL SUSTAINABILITY

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Fuel Efficiency Initiativeso Aerodynamic trucks & trailerso ArrowShield trailer skirt developmento Speed management & driving behavioro Automated tire inflation systemso Computer controlled truck idling and paperless log systemo Weight reduction strategieso LNG / CNG Engineso Continual in-depth testing of the latest fuel saving technologies

Page 9: MATC Fall Lecture Series: Tom Clements

EQUIPMENT – ARROWSHIELD

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• Proprietary trailer skirting system

• Internal development and testing more than 12 months

• U.S. Environmental Protection Agency SmartWay®

Transport Partnership verified

• Overall highway efficiency gain of 4 to 5 percent

Page 10: MATC Fall Lecture Series: Tom Clements

EQUIPMENT – WEIGHT REDUCTION

10

Key items of focus:

• Reducing wheel base length• Single wide based tires• Dead or non-drive rear axles on tractors• Smaller sleepers • Reducing fuel tank size• Aluminum wheels on trailers• Aluminum cross members on trailers• Horizontal exhaust system

Aggressively pursuing weight reduction in our tractors & trailers.

Page 11: MATC Fall Lecture Series: Tom Clements

BEHAVIOR – DRIVER TRAINING PROGRAMS

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Areas where driver behavior can impact fuel consumption:

• Equipment maintenance

• Minimizing out-of-route miles

• Implementing proper driving habits:• Speed• Acceleration• Progressive shifting• Hard Break Monitoring

• Eliminating unnecessary truck engine idling

Page 12: MATC Fall Lecture Series: Tom Clements

EQUIPMENT – DRIVER COMFORT

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100 percent of fleet is currently equipped with idle reducing technology.

Espar Heater Electric APU

Diesel APU

Page 13: MATC Fall Lecture Series: Tom Clements

TIRE STRATEGIES

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• Single wide-based• Automatic tire inflation system

• MPG savings• Tire consumption

Page 14: MATC Fall Lecture Series: Tom Clements

EQUIPMENT INITIATIVES

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1. Ultra Low Sulfur Diesel Fuel (ULSD)

2. Lowered idle rpm

3. Advanced lubricant

4. Automatic engine shut-offs

5. Minimized tractor-trailer gap

6. Lighter weight equipment

7. DEF

8. Single drive axle

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1213

14

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9. Trailer boat tails

10. Automated tire inflation

11. Aerodynamic tractor models

12. Stationary fifth wheel

13. Speed reduction

14. Trailer skirting

15. Wide based tires

16. Under Tray System

16

2

38

65

17

8

10

9

Page 15: MATC Fall Lecture Series: Tom Clements

WERNER ENTERPRISES’ IMPACT

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Results from fuel saving initiatives:

• 20 consecutive quarters of YOY improvement to mpg

• More than 50 million gallons saved from 2007 to YTD 2012

• More than 560,000 ton reduction in carbon footprint from 2007 to YTD 2012

Page 16: MATC Fall Lecture Series: Tom Clements

FUEL MPG IMPROVEMENT

1Q11 2Q11 3Q11 4Q11 1Q12 2Q125.505.605.705.805.906.006.106.206.306.406.506.606.706.806.907.00

6.40

MP

G

Trucks 7,300 7,300

Mi / Truck 495 495

MPG 6.125 6.850

$/G 4.086 4.086

Mi/Day 3,613,500 3,613,500

G/Day 589,959 527,518 62,441

$/Day     $ 255,134

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Page 17: MATC Fall Lecture Series: Tom Clements

HOS AND EOBR

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HOS impact on shippers Utilization decrease per tractor in the marketDecreased driver wage potentialDecreases capacity thus increases the number of tractors needed to haul the same amount of goods

Overall impact higher transportation costs

In late 2011, the U.S. Court of Appeals for the Seventh Circuit overturned the FMCSA’s proposal that would require carriers that have a 10 percent or higher rate of noncompliance with HOS rules in any single compliance review to put EOBR technology in place to monitor HOS.

The FMCSA announced various changes effective February 2012, with a compliance date of July 2013.

Primary rule change: 34 hour restarts will now need to include two periods between1 a.m. and 5 a.m.

Page 18: MATC Fall Lecture Series: Tom Clements

SAFETY PROCESS

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Computer Based Training (CBT)• Specific driver training (computer testing, pictures, video)• Courses cover all aspects of driving, including seasonal planning• Accessible from home or terminals• Will be accessible in trucks with new Qualcomm units

Safety Improvement Training• Safety KPI scorecard• CSA monitors• Corporate training• Constant focus

Page 19: MATC Fall Lecture Series: Tom Clements

PAPERLESS

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Paperless OrientationOn-line applicationsWhen you re-apply we recall previous app infoData for all employment forms is collected before arrivalDuring Orientation Electronic Signature Capture Image merge and driver approval

Scott Andersen - Werner Enterprises Professional of the Year 2011 Nebraska Trucking Association September 2011

Saves ½ day of orientation for 300+/- driver hires per week.

Page 20: MATC Fall Lecture Series: Tom Clements

DRIVER CONTACT

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Driver Portal• Self service help 24/7• Increased access to information

Text messages• Not while they are driving• Not while they are sleeping

Page 21: MATC Fall Lecture Series: Tom Clements

LIGHTWEIGHT SOLUTIONS

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Drive cost out of the supply chain with a Werner Enterprises value differentiator

Project Initiative

• Increase your shipment weight capacity to more than 50,000, thus reducing your number of shipments

• Reduce your carbon footprint without adding cost or complexity

Multiple options for creative solutions

Page 22: MATC Fall Lecture Series: Tom Clements

IT STAFFING OVERVIEW

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• Analysis & Information Systems (AIS)• 130 IT Staff• SMART Transportation Management System

Java, Cold-Fusion, Informix• Document Imaging, Portals, Internal Apps

.Net (C#), SQL Server• DBA’s, Analytics, GIS, BI

DB2, SQL Server, .Net, • Help Desk, System Administrators, Analytics

• Management Information Systems (MIS)• 30 IT Staff• IBM AS/400• Controls Asset Functions

Page 23: MATC Fall Lecture Series: Tom Clements

METHODOLOGY

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AIS uses the SCRUM methodology for Agile software development.

• User-driven project requests

• 30-day sprints (development cycles)

• Prioritized backlog of to-do items

• Trust users to know what they do for the business

• Quick steps to perform complex tasks

Page 24: MATC Fall Lecture Series: Tom Clements

DEVELOPMENT CYCLE

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Waterfall Method

ProjectApproval & Rank Requirements

Identification`

Approve Plan

Functional Test Plan

Code, Unit Test, DocumentSign Off

QA and Systems Test

Deploy to Production

Approve

Scrum Method

ProjectApproval & Rank

Approve

Sign Off Sign Off Sign Off Sign Off Sign OffApprove Plan Approve Plan Approve Plan Approve Plan Approve Plan

Months

Sprints

= Business Involvement = Usable Functionality Released

= Inspect / Adaptive Feedback

Page 25: MATC Fall Lecture Series: Tom Clements

INFRASTRUCTURE

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• Two on site data centers, one remote site Disaster recovery data center• Diesel generators and fuel• IBM DS8800 Storage• IBM Metro Global Mirror

• Trends:• Redhat Linux use growing• Virtualization across several operating systems

• 20-60 hosts per server

• Direct data line to China

• AVAYA VOIP Phones

Page 26: MATC Fall Lecture Series: Tom Clements

EDI

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• 3 Million EDI transactions per month

• Converting onto Sterling International

• Historically batch processing was common• Now Java Message Service (JMS) Queues and Web Services make it real-time

• High Availability• Off-site location running as a production instance• HQ data centers and offsite balance workload

• E-mail EDI enables carriers without EDI to send EDI status updates via the web• Can be done on a smart phone

Page 27: MATC Fall Lecture Series: Tom Clements

EVENT NOTIFICATION

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• Shipment booked• Booking confirmed• In gated full at origin/late gate• Shipment sailed/late sailing• Documents sent• Arrived port/late arrival• U.S. Customs cleared• U.S. Customs exam hold/release• U.S. OGA exam hold/release• Available at destination/late

availability• Delivered/late delivery

Transit Exception Notifications• Late gate• Late sailing• Late arrival• Late availability• Late delivery

Page 28: MATC Fall Lecture Series: Tom Clements

OPTIMIZATION

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• Java backend ColdFusion user interface• More than 1,000 mileage calls per second• Production rate structure• Driver scheduling• Modified Vehicle Routing Problem (VRP)

• Genetic Algorithm's

• Chipper (continuous solution)• Continuous Moves Solver• John Henry’s Hammer• Timeline

Page 29: MATC Fall Lecture Series: Tom Clements

IMAGING

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Werner Enterprises Imaging System (WEIS)

• Internally developed imaging system

• 11 departments fully automated

• 45,000 new images per day

• Over 220 million images in DB2

• Retrieval time is less than 1 second

• Average image size is 35K (200dpi Tiff G4 image)

Savings

• A single 4 drawer file cabinet = 50,000 pages

• 4,400 paper file cabinets worth of images

Page 30: MATC Fall Lecture Series: Tom Clements

MOBILE

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• Dedicated mobile development team

• Internal iPad Executive KPI App• Werner News App (Coming Soon!)

• Phone Gap• Responsive Design• Challenges with screen size, resolution, browsers…

• Werner is not BYOD

Page 31: MATC Fall Lecture Series: Tom Clements

BUSINESS INTELLIGENCE

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• Enterprise Data warehouse DB2• SQL Server• SQL Server Reporting Services• SQL Server Analysis Services• Data Cubes

• 10 years ago reporting was monthly in order to support a pat on the back, bonus, or need to improve.

• 5 years ago weekly reports were the standard• Now reporting needs to be real time

• Users also like self service• Visualization is also key to alerting users

Page 32: MATC Fall Lecture Series: Tom Clements

GIS

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Team4 Developers (2 US, 2 China)

SoftwareESRI ServerESRI DesktopUsed Google for a short trial

ImpactGeocode every shipment recordCustomer Maps & AnalysisRoad closure event responseiMap 2.0 enterprise application

Page 33: MATC Fall Lecture Series: Tom Clements

FREIGHT VISIBILITY

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Page 34: MATC Fall Lecture Series: Tom Clements

CURRENT TRUCK LOCATIONS

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Page 35: MATC Fall Lecture Series: Tom Clements

FUTURE TRUCK LOCATIONS

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Page 36: MATC Fall Lecture Series: Tom Clements

ROUTE VISIBILITY

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Page 37: MATC Fall Lecture Series: Tom Clements

DETAILED INFORMATION

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Page 38: MATC Fall Lecture Series: Tom Clements

ALERTS & ACTIONS

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Real time alerts can be thrown for a variety of reasons:

Truck not moving when we think it should

Load may be delayed

Truck Out-of-Route

Truck breakdown

Split location coordination

Truck due for preventative maintenance

Actions that could be preformed within the map:

Message driver

Assign load to truck

Assign vendor to breakdown

Message shipper and consignees

Page 39: MATC Fall Lecture Series: Tom Clements

WHAT’S NEXT

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New user interface

Keyboard Shortcuts

Further integration with

legacy systems

User Profiles

Search History

Saved map state

Embedded documentation and training videos

Page 40: MATC Fall Lecture Series: Tom Clements

DEDICATED SERVICES

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• Supply Chain Analysis & Optimization• Optimization Performance Monitoring & Tuning• Continuous Process Improvement • On-Site Customer Analysis• Rapid Response• Special Events• Site Selection• GIS Maps

Analysis and Design Team

• Backhaul Team• Trainer Teams• Slip Seats• Pod Drivers 3 Trucks : 4 Drivers

Continuous Improvement

Page 41: MATC Fall Lecture Series: Tom Clements

THE ROI IN SUPPLY CHAIN ENGINEERING

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• Mode Optimization: 3-6%

• Load Optimization: 8-15%

(LTL to multi-stop or pool consolidation)

• Continuous Moves: 2-5%

• Vendor/Supplier Compliance: 6-15 %

(inbound management)

• Transportation Staffing Overhead: 10-30% depending on factors relating to centralization and degree of current automation.

Page 42: MATC Fall Lecture Series: Tom Clements

CASE STUDY DOLLAR GENERAL

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Scope of Work

Werner Enterprises operates a Dedicated fleet with 600 trucks servicing 8 facilities. The fleet handles inbound and outbound shipments. We deliver to more than 7,000 stores per week with 99 percent on-time service.Werner Enterprises’ TMS manages the shipment execution for Dollar General’s carrier base, including storing all customer delivery data for Dollar General’s entire network.

Challenges

Surge demands of the small box retailer and the cost pressure of the recession.

Solutions

Werner Enterprises provides additional support for seasonal surges, ranging from 40 to 120 trucks on short notice - usually in less than 24 hours.Werner designed and implemented Slip Seat and Trainer Team solutions, reducing Dollar General’s cost by more than $10 million annually.

2011 Annual Revenue = $125.5 millionLength of relationship (Dedicated): 1994 - present

Page 43: MATC Fall Lecture Series: Tom Clements

CASE STUDY ANHEUSER-BUSCH

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Scope of Work

Werner Enterprises operates a Dedicated fleet of 150 trucks and 36 person loading/spotting team servicing the Columbus, Ohio brewery.

Challenges

Replace an underperforming, long-time incumbent at Anheuser-Busch’s second largest brewery in conjunction with the design and purchase of specialized equipment.

Solutions

Werner Enterprises worked closely with the equipment manufacturers and Anheuser-Busch to design a lightweight tractor and trailer solution. Werner Enterprises seamlessly executed a three phase ramp-up encompassing the delivery of 150 new tractors and 500 new trailers.

Continuous Improvement: We increased the backhaul contribution by more than 90 percent and improved driver productivity by more than 13 percent, resulting in more than $1 million in annual savings.

2010 Annual Revenue = $45 millionLength of relationship (Dedicated): 2001 - present

Page 44: MATC Fall Lecture Series: Tom Clements

CASE STUDY OFFICE MAX

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Scope of Work

Dedicated provider in OfficeMax’s three distribution centers:

Hazelton, PA McCalla, AL

Las Vegas, NV

Challenges

Solutions

2011 Annual Revenue = $36.3 millionLength of relationship (Dedicated): 2001 - present

Page 45: MATC Fall Lecture Series: Tom Clements

For more information visit: www.werner.com

Follow us on Facebook and Twitter

Thank You

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Tom [email protected]