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Transportation industry operational pressures have increased dramatically as energy and other input costs have soared. Even as economic pressures rise, carriers and shippers must deploy new technologies to achieve customer satisfaction, growth, efficiency and operating cost goals.
2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.
TABLE OF CONTENTS
Analysis ............................................................................................................................................. 4 What You Need to Know ...................................................................................................... 4 The Hype Cycle .................................................................................................................... 5 The Priority Matrix ................................................................................................................ 7 Off The Hype Cycle .............................................................................................................. 8 On the Rise........................................................................................................................... 8 Transportation Predictive Analytics and Simulation ................................................ 8 Carbon-Sensitive Planning and Execution .............................................................. 9 Real-Time (Mobile) Routing................................................................................... 10 Shipment and Package Tracking .......................................................................... 11 Transportation Carbon Accounting ................................................................... 12 Vehicle Information Hub ........................................................................................ 13 At the Peak ......................................................................................................................... 14 Radio Frequency Identification for Logistics and Transportation .......................... 14 Carrier Performance Management........................................................................ 16 Financial Import and Export Management ............................................................ 17 TMS Multimodal/International................................................................................ 17 Dock Scheduling and Carrier Appointment Management ..................................... 18 Mobile (Wireless) Supply Chain Management ...................................................... 20 Sliding Into the Trough ....................................................................................................... 21 Cargo Portals......................................................................................................... 21 RFID in Government.............................................................................................. 21 Transportation Industry RFID (Asset).................................................................... 22 Maintenance, Repair and Overhaul....................................................................... 23 Driver Load Matching ............................................................................................ 24 Fleet Vehicle Tracking ........................................................................................... 24 Global Visibility for TMS ........................................................................................ 25 Traffic Data Services ............................................................................................. 26 Wireless Supply Chain .......................................................................................... 27 Remote-Diagnostic Telematics ............................................................................. 28 Climbing the Slope ............................................................................................................. 29 Fuel Management.................................................................................................. 29 Enterprise Asset Management .............................................................................. 29 TMS Multimodal/Domestic..................................................................................... 30 Commercial Telematics ......................................................................................... 31 Multicarrier Parcel Manifesting .............................................................................. 32 Navigation Solutions.............................................................................................. 33 Entering the Plateau ........................................................................................................... 34 Geographic Information Systems for Mapping, Visualization and Analytics ......... 34 Revenue Management (Yield Management)......................................................... 35 Transportation Routing and Scheduling ................................................................ 35 Appendixes ......................................................................................................................... 37 Hype Cycle Phases, Benefit Ratings and Maturity Levels .................................... 39 Recommended Reading.................................................................................................................. 40
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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LIST OF TABLES
Table 1. Hype Cycle Phases ........................................................................................................... 39 Table 2. Benefit Ratings .................................................................................................................. 39 Table 3. Maturity Levels .................................................................................................................. 40
LIST OF FIGURES
Figure 1. Hype Cycle for Transportation, 2008 ................................................................................. 6 Figure 2. Priority Matrix for Transportation, 2008.............................................................................. 8 Figure 3. Hype Cycle for Transportation, 2007 ............................................................................... 37
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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ANALYSIS
investment beyond compliance and improve operating effectiveness, or improve custom service and client retention. Carriers must adhere to government regulations regarding passenger and cargo security; however, they also should seek ways to leverage the information that's collected in ERP, CRM and SCM systems, deliver more-timely and comprehensive decision-making data, and enhance operating efficiency. Technology innovation is continuing in radio frequency identification (RFID) systems, and even more in fleet/mobile tracking systems. Both offer leverage to cargo carriers when integrated with back-end business systems. Although RFID hype has eased during the past two years, some solutions are continuing to emerge (such as container tracking), but demand has been low. However, fleet/mobile tracking systems are being used in more and more enterprises, and the breadth and depth of solutions offered around these technologies, such as automated vehicle locating solutions that leverage GPS, are increasing. As less-expensive technologies emerge, such as cellular instead of satellite or other hardware alternatives, the market potential has expanded, and now smaller carriers and shippers are considering these technologies.
Given the extreme operational pressure that shippers and carriers are enduring, the scope of this Hype Cycle focuses primarily on technologies that affect operational effectiveness, or provide cost containment or reduction. Although many of the technologies can support passenger travel and cargo transportation, more emphasis is being placed on cargo, given the scope and impact of the cargo industry on global commerce. Many of the maturing technologies focus on intermodal cargo shipments (such as transportation management, vehicle tracking and routing, container tracking and status reporting, package tracking, cargo portals, and customs imports/exports). Given the mobile nature of transportation, mobility and telematics are becoming fundamental operating platforms for transportation providers; and although some solutions are maturing, innovation is continuing (see Figure 1).
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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visibility
Radio Frequency Identification for Logistics and Transportation Carrier Performance Management Financial Import and Export Management TMS Multimodal/International Transportation Dock Scheduling and Carrier Appointment Management Routing and Mobile (Wireless) Supply Chain Management Scheduling Cargo Portals Revenue Management RFID in Government (Yield Management) Transportation Industry RFID (Asset) Maintenance, Repair Geographic Information and Overhaul Systems for Mapping, Visualization and Analytics Driver Load Matching Fleet Vehicle Tracking Navigation Solutions Global Visibility for TMS Traffic Data Services Wireless Supply Chain Multicarrier Parcel Manifesting Commercial Telematics TMS Multimodal/Domestic Enterprise Asset Management Fuel Management
Vehicle Information Hub Transportation Carbon Accounting Shipment and Package Tracking Real-Time (Mobile) Routing Carbon-Sensitive Planning and Execution
Remote-Diagnostic Telematics
As of June 2008
Technology Trigger
Trough of Disillusionment
Slope of Enlightenment
Plateau of Productivity
time
Years to mainstream adoption: less than 2 years 2 to 5 years 5 to 10 years more than 10 years obsolete before plateau
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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benefit
5 to 10 years
Transportation Predictive Analytics and Simulation Vehicle Information Hub
transformational
high
Commercial Telematics Fuel Management Shipment and Package Tracking TMS Multimodal/Domestic
Financial Import and Export Management Mobile (Wireless) Supply Chain Management Remote-Diagnostic Telematics TMS Multimodal/ International
moderate
Cargo Portals Carrier Performance Management Dock Scheduling and Carrier Appointment Management Enterprise Asset Management Fleet Vehicle Tracking Geographic Information Systems for Mapping, Visualization and Analytics Global Visibility for TMS Multicarrier Parcel Manifesting Navigation Solutions Traffic Data Services Transportation Industry RFID (Asset)
Carbon-Sensitive Planning and Execution Driver Load Matching Maintenance, Repair and Overhaul Real-Time (Mobile) Routing Wireless Supply Chain
low
As of June 2008
On the Rise
Transportation Predictive Analytics and Simulation
Analysis By: Dwight Klappich
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Definition: Operational transportation planning and management applications are maturing, but these traditionally focused on planning and optimizing, given a known set of planning data, such as orders and shipments to be executed in a particular time frame. Operational planning systems are good at optimizing around what is known today but are not intended to look into the future to help predict conditions based on limited information. For example, a transportation planner might want to forecast load volumes many months in advance to determine whether there is enough committed capacity when needed, or a user might want to evaluate traffic patterns around major metropolitan areas to do a better job of avoiding traffic congestion. Position and Adoption Speed Justification: The use of forward-looking, predictive modeling tools in a transportation context is its initial stage, and most users have built their own capabilities using various generic analytical or simulation toolkits. A small number of TMS vendors are adding some limited forward-looking planning capabilities, such as freight forecasting, tactical planning and transportation network design. TMS vendors will continue to add advance-planning capabilities, but this will center around their core TMS planning engines and data model. Other vendors that provide raw simulation tools or generic optimization engines likely will create semipackaged vertical templates based on work they do with early adopters to construct transportation-oriented simulation and planning toolkits. These vendors will be more adept at considering conditions external to the TMS, such as traffic patterns and economic models. The latter solutions will be stand-alone external tools used by a small number of planners. User Advice: If your predictive-modeling needs are aligned directly with the TMS and focus on forecasting and planning future transportation requirements, then direct your attention to the incumbent TMS provider. If the need is freight-related but is not aligned with the data housed in the TMS (such as traffic or economic data), then consider generic simulation and modeling tools, but expect to build your own solution for the next few years. Business Impact: Although operational planning reduces costs and improves service for the given parameters, data and constraints, predictive tools can have an equal or greater impact on planning, because they look forward and can identify and plan around future events that would adversely affect the day-to-day operational plan. For example, if the organization is in a capacity crunch, then the operational planning engine can determine how best to operate under these conditions, whereas using predictive tools instead might have enabled the organization to avoid the problem. Benefit Rating: Transformational Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: i2; Quintiq; SAS
today, in the future, users will need to consider other factors that affect their environment, such as direct operational emissions of other pollutants, energy consumption and waste generated. Position and Adoption Speed Justification: Tools exist that can minimize or optimize variables that can be inferred to affect carbon footprint, such as transportation planning to minimize wasted miles, which can be inferred to reduce carbon emissions. However, tools that explicitly include carbon footprint as an optimization goal and have content databases that provide carbon footprint variables, such as a diesel truck of a certain size emits so much carbon dioxide per mile driven, are just now emerging. Other solutions, with a business intelligence base, are being developed to help enterprises measure and monitor the carbon emissions of their operations. Narrowly focused tools will first emerge on top of existing applications such as transportation management systems (TMSs) or network design, and these will simply add carbon considerations as variables or data elements. However, it will be several years before moreholistic solutions emerge that span multiple functional/application domains and that provide a more-complete picture of an organization's carbon footprint to the degree that an enterprise can effectively determine the costs of an environmentally sustainable and profitable business operation. User Advice: Identify the largest contributions your supply chain makes to the environment. Complement your carbon footprint analysis, and move toward resource intensity analysis. Adopt supply chain management technologies new attributes, data and new models that identify, track and reduce your supply chain's ecological footprint. Business Impact: At a minimum, these solutions will enable enterprises to comply with emerging governmental mandates and regulations, as well as leverage their adoption of "green" initiatives as good publicity. However, in many cases, optimizing around green considerations has complementary business justification, as reducing emissions can reduce other costs. For example, reducing wasted miles driven for a green initiative translates to significant savings on fuel and overall transportation costs. Benefit Rating: Moderate Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: Barloworld; i2; Infor; Lawson Software; SAS; Supply Chain Consulting (Australia)
monitoring solutions emerge and become more pervasive, the routing system could receive notification of a traffic congestion problem that would delay a driver and for which rerouting might be warranted, and the system could dynamically recalculate the route and communicate the new route to the driver in real time. Position and Adoption Speed Justification: Real-time routing solutions are nascent, and, so far, only a few vendors are testing the reach of these types of solutions. Initial solutions will be adaptations of traditional routing and scheduling wherein a route can be replanned and a dispatcher will control the process. In the future, more automated solutions will emerge wherein real-time data within and outside the organization, such as traffic data, will be used to more automatically direct daily activities. User Advice: Users should first get daily routing and scheduling under control, so the first priority is to implement more-traditional routing and scheduling solutions. Mature users of commercial routing and scheduling looking for incremental benefits should determine what, if anything, their current vendor is or plans to do in regard to real-time routing. However, most users should conduct a new investigation, considering their incumbent vendor, as well as others. Business Impact: Real-time routing will add incremental benefits to mature users of routing and scheduling, further reducing costs and improving service. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: Descartes Systems Group; Manhattan Associates; RedPrairie
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Exposing tracking information through the use of a Web service will extend its value by enabling users that have service-oriented architecture (SOA)-compliant applications to embed tracking information in their business applications. Some ERP and transportation management system (TMS) vendors now support this capability with leading carriers that support Web services. User Advice: Package tracking systems from well-established and technologically sophisticated carriers are highly reliable and deliver promised benefits. Shippers should carefully evaluate systems or services from newer entrants or nontechnology-sophisticated carriers to determine what services they offer, as well as their maturity and reliability. Shippers should determine if these services are needed and, if so, focus on carriers with proven offerings. Business Impact: The primary business effect is significantly improved customer satisfaction and repeat business. A secondary effect is increased operating efficiency in delivery vehicle routing and dispatch. Benefit Rating: High Market Penetration: 5% to 20% of target audience Maturity: Emerging Sample Vendors: Con-Way; FedEx; Freightquote.com; Intermec Technologies; National Air Cargo; PeopleNet; Pitney Bowes; UPS
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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and allocated at that level. Although this appears to be a logical method, no solutions are currently available. No one knows what the cost of managing carbon at this level will be, and no one has put forth a realistic value proposition for doing this. Position and Adoption Speed Justification: While reporting is useful and partially doable with current TMS applications, there are no commercial systems fully doing it. However, the ultimate vision of end-to-end "actual" accounting of carbon across an extended supply chain is unrealistic for the near future. Missing today are standards in terms of carbon emission definitions, measurement and emissions expectations for a given activity, and the quality and reliability of emerging carbon footprint data is suspect. More-robust tools will emerge during the next 10 years that support increasingly sophisticated carbon accounting first, within an enterprise and, later, across the extended supply chain. Even when actual costing tools emerge, few enterprises will adopt them comprehensively across their organizations. Additionally, given the low adoption of ABC, which is quite mature, the adoption of actual carbon costing is likely to have a similarly low adoption rate for at least the next 10 years (and likely longer). User Advice: Enterprises should plan and budget for a multiyear journey to move from basic carbon reporting to end-to-end actual carbon accounting. Business Impact: Carbon footprint is a politically sensitive area receiving a lot of attention. The value in transportation and logistics will be more marketing spin, because the value is derived mainly from improved transportation operations, which TMSs already provide. Therefore, adding the carbon as a reporting element is more political than value-add. Benefit Rating: Low Market Penetration: Less than 1% of target audience Maturity: Embryonic Sample Vendors: i2; JDA Software Group; Oracle OTM; SAS
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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User Advice: To support consumer demand for portable devices in the vehicle, the automotive industry can create competitive differentiation through vehicle information hubs that ensure a safe and satisfying user experience in the automobile. In particular, original equipment manufacturers (OEMs) and suppliers must focus on developing innovative connectivity (personal-area networks [PANs] and wide-area networks [WANs], for example), user interfaces (touch-based haptic steering-wheel-based input systems, for example) and output technologies (audio and head-up displays, for example). Additionally, they must collaborate with companies outside the automotive industry, such as consumer electronics leaders and software/hardware providers. Vehicle information hub-centric offerings don't address all vehicle information and communication technology (ICT)-related needs, and have some reliability challenges due to a simplified technology design that minimizes embedded technologies (for example, for safety-related applications such as automated airbag deployment notification). Hence, vehicle manufacturers should consider complementing a vehicle-hub solution with a traditional telematics service. Business Impact: Vehicle manufacturers will be able to increase revenue from vehicle information hub offerings and create a flexible method to enable users to access their portable devices in the vehicle. This will help the automotive industry to overcome some of the main challenges regarding product life cycle limitations for embedded electronics (such as the fact that consumer electronics evolve much faster than vehicles, often leading to outdated technologies in automobiles). Benefit Rating: Transformational Market Penetration: Less than 1% of target audience Maturity: Emerging Sample Vendors: Azentek; Continental; JCI; Magneti Marelli; Microsoft Recommended Reading: "Microsoft, Hyundai Embrace Device-to-Vehicle Integration" "Cool Vendors in the Automotive Industry, 2008" "Ford Shifts Vehicle Hub Concept Into High Gear"
At the Peak
Radio Frequency Identification for Logistics and Transportation
Analysis By: Dwight Klappich; Tim Payne Definition: Radio frequency identification (RFID) is an automated data collection technology that uses radio frequency waves to transfer data between a reader and a tag to identify, track and locate that item. RFID does not necessarily require physical sight or contact between the reader and the tagged item. An RFID reader is a radio frequency device that emits a signal through an antenna. This signal is received and responded to by the RFID tag. Readers come in various forms. A portal reads tags as they pass through it. A handheld device reads tags in a portable manner. Mounted readers are affixed to mobile assets to communicate with tags. RFID tags are small devices that have a range of capabilities in terms of memory, read range and level of read/write, and contain a variety of information from product serial number to product history. There are two basic categories of tags passive and active. Passive RFID, specifically ultrahigh frequency (UHF) passive, is the most-common form of RFID system in the logistics marketplace. A passive tag does not have a battery, and collects the necessary power from the radio interrogation of the reader; it provides only minimal information such as identification numbers and has a very limited read distance. Thus, these are fairly inexpensive tags that cost
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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from 10 cents to $10, with a range not normally exceeding 20 feet. Active RFID uses an attached battery to respond to a reader and provides more capabilities, such as the ability to identify individual items. Thus, the cost of active RFID runs from five dollars to hundreds of dollars, with a range not normally exceeding 300 feet. Additionally, battery-assisted passive technology (essentially, this is a low-cost active tag, but it is referred to as battery-assisted passive because it uses passive RFID protocols) is being researched and enables the long read range of active tags to be combined with the low cost of passive tags. Position and Adoption Speed Justification: While there have been numerous applications of RFID hyped for inventory management, RFID and similar sensory technologies are emerging as an asset management tool that provides some level of asset visibility within a supply chain. Airlines facing economically challenging conditions will be slow adopters of RFID-enabled management systems. Many large carriers and shippers will consider RFID-enabled projects because of the global adoption of electronic manifesting. However, standard RFID technologies alone cannot provide long-range geolocating such as tracking the location of a vehicle miles from its domicile, so look for sensory technologies to intertwine with RFID tags to observe and communicate location and environmental conditions. A trend is the combination of sensory technologies RFID/GPS, RFID/onboard computer, RFID/bar codes, RFID/Wi-Fi and others. Sensor-based combinations will become more viable with the standardization of the interface between the tag and the sensor, currently defined as Gen2 Class 3. There has been an assumption that a network of connected RFID readers will emerge at ports of entry, warehouses or mobile assets such as on light rail, which has yet to materialize beyond narrow pilots. The technical and architectural requirements of sensory-based combinations or "automated identification technologies" will be dramatic in scale. If the technical and architectural realities are achieved, it will be vital to understand what to do with all the data now being collected along a sensory supply chain. The use of RFID varies by segment, with asset management such as tracking returnable assets and transportation leading adoption. On the government track, be prepared for RFID-enabled projects to monitor assets with relatively long use cycles. Toll payment and contactless cards have been in use for some time, while applications in logistics and traffic management are emerging. However, RFID will not replace bar codes or other mobility solutions such as GPS. The various technologies will coexist because each technology is suitable in specific process situations. With airlines, adoption is slowed by the difficulty in substantiating a business case and differing ownership of the baggage equipment. In some airports, it is the airlines; at others, it is the airport. Additionally, adoption is slow with airlines because of the need for numerous locations (airports) and airlines to adopt the same technology to achieve the vision. Unless there is a mandate or all these groups can come to some form of agreement, baggage handling will continue to be a niche market. User Advice: Monitor and be aware of various privacy impact assessments. Participate in RFIDenabled tracking systems, if only as a pilot project, to gain experience and positioning for widespread adoption of larger RFID-based system implementations in the future. RFID will require an infrastructure beyond tag/reader; it will require data storage and network performance. Business Impact: Major initiatives that use or propose to use this technology will include tracking of assets, loss prevention, inventory management, rail transportation, logistics, toll payment, traffic management, and transportation asset tracking and control. The impact and business value will vary across industry segments, proposed use, or business solutions and regions. Within a single enterprise, the value will be derived from the potential additional benefits of using RFID technologies versus other identification technologies such as bar coding. In these cases, a costbenefit analysis should compare the various identification technologies, and RFID should only be chosen if the business case proves RFID to be the better approach. The grander, yet so far
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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elusive, vision is the value RFID would offer as part of the extended supply chain and logistics challenge, where RFID would be used to track, monitor and facilitate the flows of products and modes of transportation across the global supply chain. To achieve the end-to-end vision, which remains just a vision today, RFID standards must emerge that define a set of requirements that the system components must follow to operate across enterprises and geographies. For example, global supply chains will require a set of common standards to facilitate proper interchanges of information across all the entities involved in an international shipment transaction. Benefit Rating: Transformational Market Penetration: 1% to 5% of target audience Maturity: Emerging Sample Vendors: Alien Technology; Atmel; IBM; Intermec Technologies; Lockheed Martin; Manhattan Associates; Motorola (Symbol Technologies); Savi Technology; Texas Instruments Recommended Reading: "Hype Cycle for Radio Frequency Identification, 2005" "Positions 2005: RFID Is Set to Redefine Industry Processes" "RFID Isn't the Passport to Fast, Trouble-Free Baggage Handling" "RFID Alone Can't Resolve Cargo Container Security Issues" "RFID Enables Sensory Network Strategies to Transform Industries"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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actions; the resulting information can be used to identify carriers to drop or be used to negotiate improved terms in the future. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: i2; JDA Software; LeanLogistics; Manhattan Associates; Oracle OTM; Sterling Commerce; Transplace
TMS Multimodal/International
Analysis By: Dwight Klappich Definition: Global logistics applications help automate the movement of goods globally by ensuring that processes are synchronized with all the parties involved in the international shipment. International shipments are typically complex, multileg movements in which goods and information flow among many constituencies, such as suppliers, port operations, governments, ocean and air carriers, and domestic truck or rail carriers. Global logistics must support different modes of transportation, such as by water, truck, rail and air, with unique planning and execution
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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requirements not traditionally addressed by domestically oriented transportation management system (TMS) applications designed for domestic, truck and rail transport. Position and Adoption Speed Justification: Solutions are changing rapidly because of pent-up buyer demands and consideration of global shipping requirements by many enterprises, coupled with the increasing economic pressures to reduce supply chain costs. Although solutions are incomplete, they are maturing rapidly, and support for international shipping requirements is improving. Getting accurate source data, such as vessel sailing schedules, as well as difficulties in modeling the complexities of itinerary construction across multiple models, such as wait time at port, have limited adoption of these solutions as well. User Advice: Enterprises with significant international logistics operations should consider these solutions, paying particular attention to the breadth and depth of the TMS solutions being considered, with equal or greater attention focused on the global logistics domain expertise of the vendors. Business Impact: Complexity and the rising cost of global logistics, particularly rising fuel costs, combined with the need to manage international operations cost-effectively and with sufficient management controls for the safe and secure transit of goods, drive the need for software to help manage global logistics operations. Benefit Rating: High Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: GT Nexus; i2; JDA; JDA (Manugistics); Log-Net; Manhattan Associates; Oracle; SAP Recommended Reading: "A Self-Diagnostic Model for Building a TMS Business Case and Evaluating TMS Sourcing Options" "Report Highlight for Market Trends: Transportation Management Systems, Worldwide, 20062011" "Issues to Consider When Building a TMS Business Case and Evaluating TMS Sourcing Options" "TMS Sourcing Options Are Expanding With the Increase in the Number and Types of Products" "Evaluating the Efficacy of TMSs as SaaS" "Stratifying Transportation Management Systems: A Multilevel View" "Magic Quadrant for Transportation Management Systems, 2007" "Hype Cycle for Transportation, 2007"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Carriers, customers and suppliers with pending shipments or receipt requests can query the system to determine available dock times. In the most-sophisticated optimization systems, these external queries are held together with load tenders and optimally assigned at a specified point based on maximum resource use. For example, if there is congestion during a particular period, then the system would not operate on a first-come, first-served appointment basis. Instead, the materials being delivered or shipped would be evaluated based on criticality or capacity to determine which appointments must be scheduled during the congested period, and which can be scheduled during alternative periods. Position and Adoption Speed Justification: Scheduling functionality is a long-standing concern among many of the world's largest shippers. However, recent challenges in carrier capacity, increasing customer requirements around on-time shipment performance, and the effects of government mandates (such as hour of service rules that demand faster and more-consistent shipment turnaround) are driving more enterprises to evaluate this technology. In addition, a scheduling and appointment management system can be used in conjunction with constraintbased warehouse optimization to begin creating a supply chain execution model that moves more toward flow-through and cross-docking models. Integration with warehouse management systems (WMSs), transportation management systems (TMSs) or yard management systems (YMSs) is becoming a more-important consideration, and vendors of these types of solutions are adding rudimentary, often Web-based, appointment requesting and dock door allocation. More-advanced solutions are emerging from the leading WMS vendors. Current models use portals to request appointments, but increasing acceptance and availability of mobile applications offer the potential to move this closer to the driver and mobile assets, as well as to add additional capabilities such as geo-fencing, wherein a GPS device notes when a truck is within a certain distance of the distribution center and the appointment can then be electronically confirmed. User Advice: Users with capacity constraints in their yard or dock areas should evaluate this system. In addition, users that are capacity-constrained within the warehouse should evaluate dock scheduling and optimization as part of an overall flow-through system. Users with large numbers of unnecessary penalties for excessive dwell time caused by drivers having to wait for a dock should also look at these technologies. Business Impact: Dock scheduling and carrier appointment management reduces the amount of administrative time required to set carrier appointments and manage the dock schedule. If managed properly, this approach can improve relations with an enterprise's carriers, customers and suppliers, because the system can be more responsive than manual processes. Finally, scheduling and appointment management can improve the overall throughput and capacity of a warehouse by optimizing appointments and activities, reduce operating labor costs by reducing idle time, and reduce transportation costs by increasing the number of cross-docking opportunities. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: i2; Manhattan Associates; Oracle; RedPrairie Recommended Reading: "Report Highlight for Market Trends: Transportation Management Systems, Worldwide, 2006-2011" "Issues to Consider When Building a TMS Business Case and Evaluating TMS Sourcing Options"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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"TMS Sourcing Options Are Expanding With the Increase in the Number and Types of Products" "Evaluating the Efficacy of TMSs as SaaS" "Stratifying Transportation Management Systems: A Multilevel View" "Magic Quadrant for Transportation Management Systems, 2007" "Hype Cycle for Transportation, 2007"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Business Impact: A mobile/wireless supply chain brings the real-time enterprise scenario closer to SCM, and although initial solutions will augment established processes with moderate benefits from automation, future generations of solutions will exploit mobility technologies to engineer new or significantly enhanced processes that add greater levels of value. Benefit Rating: High Market Penetration: 20% to 50% of target audience Maturity: Adolescent Sample Vendors: EDS; PeopleNet; Qualcomm; Rockwell; Sprint Nextel; Symbol; Turnpike Global Technologies; @Road
RFID in Government
Analysis By: Jeff Vining Definition: Radio frequency identification (RFID) is an automated data collection technology that uses radio frequency waves to transfer data between a reader and a tag to identify, track and locate an item. RFID does not necessarily require physical line of sight or contact between the reader and the tagged item. An RFID reader is an RF device that emits a signal through an antenna. This signal is received and responded to by the RFID tag. Readers come in various forms: A portal reads tags as they pass through it. A handheld reads tags in a portable manner. Mounted readers are affixed to mobile assets to communicate with tags.
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Position and Adoption Speed Justification: Governments continue to hype RFID as an asset management tool that provides total visibility within a supply chain or as a chain-of-custody control and management tool for important documents. Toll payment and contactless cards have been in use for some time, while other applications are emerging for further use in the transportation conveyance system, such as proximity border cards. Various RFID applications will be found within government and defense organizations; however, there is minimal coordination among many of these organizations regarding these projects. Some governments are looking into RFID applications for identity and access control, or to improve the tracking of the food supply, as the Hawaii Department of Agriculture does. Some governments will be slower in adopting RFIDenabled management systems, and others will determine ways in which RFID is better than bar coding. Nevertheless, many operators of critical infrastructure and governments will use RFID for inspection identification or to track personnel at facilities and sites for security, audit and safety reasons. The costs are higher and will slow the adoption rate. Thus, look for sensory technology to intertwine with RFID tags to observe and communicate environmental conditions in large government sensor farms or at ports of entry, warehouses, data centers and public transportation. User Advice: RFID requires an infrastructure beyond tag/reader that will require data storage and a network to facilitate performance. RFID-enabled projects can monitor high-value items or assets with long use cycles. Start with isolated examples where benefits can be measured and problems can be solved without affecting the entire organization's workflows. Because of the item-by-item nature of RFID, it is well-suited to progressive deployments or specific areas. Business Impact: This will reduce work time and increase accuracy for tracking of assets, loss prevention, inventory management, logistics and traffic management. The impact will vary across government segments and regions as part of the logistics challenge, and to facilitate flows of public modes of transportation and the supply chain. Gartner expects that next-generation sensors will move from portable devices to fixed/wireless sensing technologies that interact with the mobile operator when they pass by sensors. Benefit Rating: Transformational Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: Alien Technology; Atmel; IBM; Savi Technology; Symbol Technologies; Texas Instruments; Unisys Recommended Reading: "Report Highlight for Market Trends: Radio Frequency Identification, Worldwide, 2007-2012" "Cool Communication Applications, 2007"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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are ideal for tagging, and return on investment can be achieved in a relatively short time. Other mobile technologies using cellular technology, such as onboard devices and GPS, could offset advances in RFID for power units, because they can provide tracking in addition to other valueadded capabilities. User Advice: Carriers should monitor RFID deployment in this environment and deploy pilot projects of their own to understand what business advantage is available to them. A wide range of technologies (such as active, passive, Wi-Fi and battery-assisted) is available, and these solutions need to be matched to system requirements and performance characteristics. Tag and reader technology is more-robust, and the focus is switching to the middleware and applications that interpret the reads and provide the optimization capability in terms of positioning mobile assets in the right place and the right time. Business Impact: This technology includes the ability to track and monitor expensive mobile assets, thereby reducing asset loss and maintenance costs. The visibility of inventory movement in the supply chain can be improved, which is an important secondary benefit for enterprises that can take advantage of that visibility to manage their operations. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Adolescent Sample Vendors: Alien Technology; Check Point Software Technologies; GlobeRanger; IBM; Intermec Technologies; Manhattan Associates; Motorola; OATSystems; RedPrairie; SAMSys Technologies; Texas Instruments; TrenStar
Business Impact: Operational efficiency is affected. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Early mainstream Sample Vendors: infoTRAK; IFS; Lawson Software; Mxi; Oracle; SAP Recommended Reading: "The EAM Market Shows Growth and Consolidation"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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smaller users (five or more vehicles on the road) to adopt these types of capabilities. Early offerings were too costly to achieve mass penetration, but new low-cost solutions enable even small and midsize carriers' data analysis and driver feedback features. Capabilities such as GPSenabled mobile devices and phones, along with lower-cost tools to connect to the vehicle, will enable more than just tracking, which will improve the business case and increase adoption. User Advice: Smaller users should first consider buying or subscribing to commercial solutions focusing on functionality and cost alike, buying only what fits the business case. Larger organizations should consider newer, less-expensive commercial solutions, as well as developing their own tracking systems by buying and combining off-the-shelf technologies, instead of paying for costly subscription services from some traditional providers. Focus on integrating navigation data with logistics and asset management applications. Operators should implement vehicle-tracking systems when the pain of empty loads, idle drivers, and "lost" tractors and trailers visibly affects customer satisfaction or operating efficiency. Business Impact: Fleet operators may enhance their operations effectiveness, dispatching and routing processes, and security systems. Benefit Rating: Moderate Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: GPS Management Systems; IBM; Intermec Technologies; mTrack; NextBus; Outfitter Satellite; PeopleNet; Qualcomm; Squarerigger; Telogis; Trimble; Turnpike Global Technologies; @Road
houses a high percentage of the needed data, adoption is accelerating. Stand-alone visibility solutions are becoming less competitive, though still desired by users that outsource transportation to a third party, or do not have or plan to have a TMS. User Advice: Midsize to large international shippers (1,000 or more containers per year) in dynamic international logistics environments will benefit from improved visibility. Early adopters of stand-alone solutions should consider on-demand global visibility solutions, where upfront costs are minimized. TMS users should first consider the visibility solutions offered by their TMS provider, only considering stand-alone solutions if their TMS vendor lacks a visibility offering or if their offering is inadequate. Business Impact: Given the increased risk of managing a global supply chain, visibility to potential problems is critical to managing global logistics operations effectively. However, visibility alone provides only incremental value, because although it can identify and diagnose problems, it cannot resolve them. The value of visibility increases when it is integrated with other applications, such as a TMS, where problems can be identified, diagnosed and resolved in a single environment. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: Descartes Systems Group; GT Nexus; i2; Log-Net; Management Dynamics/BridgePoint; Oracle OTM; SAP; TradeBeam Recommended Reading: "Magic Quadrant for Transportation Management Systems, 2007"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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times or driving strategies (perhaps suggesting that you leave the office 10 minutes earlier to arrive on time) based on predicted and real-time traffic flow. Business Impact: Traffic data services and applications improve the utility of a vehicle beyond basic transportation and enable vehicle manufacturers to elevate the value of their products to customers. Benefit Rating: Moderate Market Penetration: 5% to 20% of target audience Maturity: Adolescent Sample Vendors: Inrix; Traffic.com Recommended Reading: "Navigation Evolution: Device-Independent and Services-Centric" "Vehicle Navigation Must Evolve or Face Commoditization"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Recommended Reading: "Cost Cutting in Automotive Means Preparing for Uncertainty While Preserving Agility" "How Manufacturers Can Leverage Wireless Technology"
Remote-Diagnostic Telematics
Analysis By: Thilo Koslowski Definition: Remote-diagnostic technologies provide the ability to deliver onboard vehicle-related performance and quality data to a central monitoring application. Position and Adoption Speed Justification: Despite a clearly defined value proposition for end users, vendors and business partners in the automotive value chain, remote-diagnostic applications have yet to be deployed on a broad scale, especially outside the commercial vehicle segment. To realize potential benefits, such as cost savings, quality improvements and enhanced customer experiences, companies are carefully exploring their technology options and business models. The main challenge lies in developing and automating business processes that can take advantage of remote-diagnostic services. This will involve collaboration from vehicle manufacturers, major parts suppliers and the dealership-servicing network, which will take much organization, investment and a transformation of processes. Most recent initiatives for remote diagnostics have focused on prototype and launch vehicle testing efforts. The idea is to use remote-diagnostic technologies to capture and communicate telemetry data from the vehicle to the manufacturer's testing or quality center. User Advice: Develop a business case for remote diagnostics that focuses on minimizing warranty costs, improving product quality and enhancing the customer's ownership experience throughout the vehicle product life cycle. Seek input and participation from multiple departments and value chain partners to maximize benefits. For example, dealerships should be involved to provide an optimized experience based on the benefits of remote diagnostics (that is, the dealer automatically orders replacement parts and schedules a service appointment based on information collected from the remote-diagnostic system). Business Impact: Remote-diagnostic telematics improve vehicle quality, minimize warranty costs and, ultimately, can improve profit margins. They empower OEMs and dealers to maximize CRM potential, they accelerate and automate repair/maintenance scheduling and parts ordering with dealers and suppliers, and they improve the reporting of recurring mechanical vehicle problems to manufacturers, suppliers and institutions (for example, the Transportation Recall Enhancement, Accountability and Documentation Act). Furthermore, remote diagnostics can benefit manufacturers during the product testing phase and ensure high-quality reliability. Benefit Rating: High Market Penetration: 5% to 20% of target audience Maturity: Emerging Sample Vendors: ADT; Cross Country Automotive Services; GE; Hughes Telematics; IBM; OnStar Recommended Reading: "In-Vehicle Technologies Provide Differentiation Opportunities for U.S. Commercial Vehicle Manufacturers"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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addition, wireless and mobile EAM field applications are improving asset data management access in the field. User Advice: Packaged EAM systems are becoming more prominent as functional breadth increases and companies move through software replacement cycles brought on by mergers, increased production goals or the difficulty of support for legacy systems. EAM integration with GISs and mobile devices via enterprise information management (EIM) is enabling data quality improvement and enforcing data management business processes as part of the EAM workflow. Utilities of all kinds should be planning the use of packaged EAM software for fixed or distributed assets. Business Impact: Affected areas include materials management, field service, transmission and distribution field operations, engineering and asset management, and fleet management. Benefit Rating: Moderate Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: IBM Tivoli; Invensys; Mincom; Oracle; SAP; Ventyx Recommended Reading: "Cost Cutting in Utilities Can Come From Better Asset Management" "The Rise of the Machine in Enterprise Asset Management"
TMS Multimodal/Domestic
Analysis By: Dwight Klappich Definition: Transportation management system (TMS) multimodal domestic refers to TMSs intended for and used in a specific region or geography, such as North America or Western Europe. These are holistic solutions intended to manage domestic freight operations. TMSs are used to plan freight movements; perform freight rating and shipping across all modes (truck load, less than truck load, air, parcel, rail and intermodal); consolidate orders; select the appropriate route and carrier; communicate (tender) with carriers; and manage freight bills and payments. These systems are used for domestic freight operations, not international or global shipping. Position and Adoption Speed Justification: Domestic multimodal TMS solutions are a mature market, first emerging in the early 1990s. However, until recently, penetration, was limited to large shippers (more than $100 million per year in freight spend), because of the high cost of TMS applications and the constrained benefits of more-narrowly focused applications. With expansion in the TMS footprint to now holistically cover most freight activities, from planning to execution to settlement, as well as more options for how users buy these types of solutions, the market has now expanded to include shippers from as little as $15 million per year in freight spend. Although overall market adoption is estimated at slightly more than 20%, large shipper adoption is far higher, and smaller shipper adoption remains quite low, but is growing rapidly. It is evolving rapidly because of pent-up buyer demand and consideration of global shipping requirements by many enterprises. Although solutions are incomplete, they are maturing rapidly, and support for international shipping requirements is improving. User Advice: Enterprises with more than $15 million in annual freight spend that spans multiple modes of transportation should consider using TMS, but they should be diligent in creating a business case and selecting solutions that fit their budgets. Larger shippers with $50 million or more in annual freight spend should consider these solutions as well, paying particular attention
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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to the breadth and depth of the TMS solutions being considered, with particular focus on the planning engines of these solutions. Business Impact: Rising transportation costs, particularly rising fuel costs, combined with the need to manage freight operations cost-effectively and provide high customer service, make TMS almost a necessity for medium to large shippers. Cost reduction and payback are high, with most organizations finding less than 12-month return post-implementation. Benefit Rating: High Market Penetration: 20% to 50% of target audience Maturity: Early mainstream Sample Vendors: Descartes Systems Group; HighJump Software; i2; Infor; JDA Software Group (Manugistics); LeanLogistics; Logility; Manhattan Associates; Oracle OTM; Precision Software a Division of QAD; RedPrairie; SAP; Sterling Commerce; Transplace Recommended Reading: "A Self-Diagnostic Model for Building a TMS Business Case and Evaluating TMS Sourcing Options" "Issues to Consider When Building a TMS Business Case and Evaluating TMS Sourcing Options" "TMS Sourcing Options Are Expanding With the Increase in the Number and Types of Products" "Stratifying Transportation Management Systems: A Multilevel View" "Magic Quadrant for Transportation Management Systems, 2007"
Commercial Telematics
Analysis By: Thilo Koslowski Definition: Commercial telematics are fleet- and trucking-segment-targeted automotive information and communication technologies/services. They enable networks between commercial vehicles/fleets and IT applications, with a focus on improving productivity and profitability. Position and Adoption Speed Justification: Different IT and service vendors continue to improve functionality, back-end integration and business value for commercial telematics applications, which is leading to the growing penetration of such applications in the existing commercial fleet market (aftermarket). Vehicle manufacturers' efforts to develop factoryembedded commercial telematics applications are increasing more slowly than anticipated, primarily because of long product development cycles and difficulties in defining a viable business model for such offerings, especially subscription-based services. Fleet operators' expectations regarding the functionality of in-vehicle technologies have increased, and companies are expecting to pay less for such offerings. Countries in Europe are more advanced than the United States and most countries in Asia/Pacific regarding commercial telematics, primarily because of government involvement in monetizing commercial traffic (that is, road-charging initiatives). User Advice: Communicate and market a clear value proposition: productivity improvements, cost savings and reduced risks for fleet managers (for example, via remote diagnostics). Establish partnerships with integrators to develop an effective telematics solution that ties into back-end logistic and fleet management applications. Explore opportunities to integrate with ERP systems, leveraging fleet-specific information.
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Business Impact: Commercial telematics can provide improved asset management and profit margins for fleet operators. They represent a market opportunity for service and technology providers, and enable vehicle manufacturers (for example, truck makers) to offer improved options and, potentially, increase service revenue. Benefit Rating: High Market Penetration: 20% to 50% of target audience Maturity: Adolescent Sample Vendors: IBM; Qualcomm; T-Systems Recommended Reading: "From Enlightenment to Mainstream: The Resurgence and Transformation of Telematics" "In-Vehicle Technologies in Europe Present Opportunities and Challenges for Commercial Vehicle Manufacturers"
Position and Adoption Speed Justification: Basic multicarrier parcel manifesting is a mature solution category, and most companies that need a solution have one, so many new decisions are driven based on technology obsolescence criteria. However, this market is undergoing change and we see new capabilities emerging as part of the stand-alone parcel solutions. Although multicarrier parcel manifesting is mature in distribution environments, many companies have large parcel operations in other areas of their businesses, or they are not traditional shippers, but have a large parcel shipping need. These environments might be found in sales groups, banks, financial institutions, insurance companies or universities, where the organization has many individuals shipping parcels, and the goal is to provide consistency and discipline to this process, as well as ensure that rules (such as select least cost carrier) are adhered to. Leveraging multiuser Web-based technologies enables distributed users to access a common system to ensure control. This market is nascent. In addition, we find parcel capabilities becoming integrated with multimodal TMS, wherein parcel is one of the available mode choices, but the system can also look to consolidate parcel shipments to find less-costly shipping alternatives, such as combining multiple parcel shipments into one less-than-truckload (LTL) shipment, which would have lower total cost.
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Developments continue in this area, such as technology renovation; footprint expansion to include more constraints, such as drivers and assets; and increased use of mobile technologies. User Advice: Companies that ship individual packages using multiple parcel carriers and do not need multiple modes of transportation (full-truck, LTL, rail and ocean) should consider independent multicarrier parcel manifesting solutions. Shippers using warehouse management systems (WMSs) should look for integrated solutions with their current WMSs, while shippers using TMSs should evaluate parcel manifesting systems integrated with TMS products. Nondistribution users should focus on multiuser Web-based solutions designed for desk-top shipping or mailroom use. Business Impact: Companies can lower parcel shipping costs and increase service levels with multicarrier parcel manifesting. Benefit Rating: Moderate Market Penetration: More than 50% of target audience Maturity: Mature mainstream Sample Vendors: Kewill Systems; Pitney Bowes; Precision Software a Subsidiary of QAD; UPS
Navigation Solutions
Analysis By: Thilo Koslowski Definition: Satellite navigation systems are based on the Global Positioning System (GPS), with applications in consumer and commercial markets. Satellite navigation systems are embedded in a vehicle, available as a portable unit (personal navigation device [PND]) and offered as an application in cellular phones, with an internal or external GPS antenna, or based on cellular tower or Wi-Fi-enabled triangulation (assisted GPS). Position and Adoption Speed Justification: Market adoption for navigation solutions continues to grow steadily, primarily as a consequence of increasing consumer demand for PNDs. Emerging cellular-phone-based navigation solutions are offering alternatives for users and will further stimulate demand. Embedded satellite navigation solutions in vehicles are facing competition from portable solutions that are less costly and no longer tie navigation to a single vehicle. This will limit growth for embedded satellite navigation, and put significant price pressure on vehicle manufacturers and suppliers. Profit margins for traditional PND offerings are decreasing due to increased competition, although overall product demand continues to rise. Planned PND products that wirelessly connect to the Internet are needed to protect margins from this point on, and will provide innovation opportunities for PND manufacturers. However, cellphone-based navigation offerings can also provide such functionality and do so by using consumers' existing data plans. User Advice: Vehicle and device manufacturers must reduce prices for embedded and PND navigation solutions to compete with alternative platforms (that is, cellular phones), and market them as part of a complete telematics offering. Seek differentiation via partnerships and collaboration to offer added functionality in the form of dynamic, location-based services (for example, useful traffic information, buddy finders and enabling device integration). Business Impact: Additional revenue streams are possible, especially with expanded feature sets and the potential integration of telematics services or location-based services that use Internet content. Benefit Rating: Moderate
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Market Penetration: 20% to 50% of target audience Maturity: Mature mainstream Sample Vendors: Dash Navigation; Magellan; Nokia; OnStar; TomTom Recommended Reading: "Dash Express Launch Could Disrupt Navigation Industry" "Navigation Evolution: Device-Independent and Services-Centric"
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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rather than just reporting functions, could provide more-intuitive access to complicated business transactions, which would be a dramatic step forward in driving the adoption of this technology. User Advice: For daily route visualization, use the functionality provided by your TMS provider. For more-GIS-based analytical capabilities, users must build their own solutions, at least for the near future. Business Impact: Understanding geographical considerations in managing freight operations is necessary given the point-to-point nature of transportation. Benefit Rating: Moderate Market Penetration: 1% to 5% of target audience Maturity: Embryonic Sample Vendors: Descartes Systems Group; ESRI; Google Maps; i2; JDA Software Group; Manhattan Associates; Oracle Transportation Management; Pitney Bowes MapInfo; UPS Logistics Technologies
Definition: Transportation routing and scheduling software helps companies create truck/vehicle routes and schedules that meet delivery objectives at minimal cost and mileage. The software can create a repeatable schedule, or routes can be determined dynamically based on the input (orders), rules and constraints for meeting an objective, such as minimizing miles or cost. Shippers directly (private fleet) or indirectly (contract fleet) control the assets to be scheduled. Position and Adoption Speed Justification: Transportation routing and scheduling is a mature market, and solutions have been evolving for almost 20 years. Vendors offer proven and mature applications for major geographies such as North America and Western Europe, while other markets are only partially covered either by local vendors or some of the established vendors. The market has consolidated considerably during the past year, and only a few dominant vendors of traditional routing and scheduling remain. However, there are numerous smaller or local providers that can provide rudimentary or custom-made solutions because the underlying planning algorithms have become partially commoditized. Nonetheless, the dominant vendors provide solutions with higher-quality fit and finish than many of these smaller solutions can provide. There are some changes under way as new entrants bring to market contemporary tools, and transportation management software (TMS) vendors add more routing and scheduling functionality to their multimodal TMS solutions. Outside of developing economies, most companies that have a fleet of any size (more than 10 vehicles) are using some form of routing and scheduling solution, so most new sales are replacement sales driven by technical obsolescence, sales to growing companies in emerging economies, or by the need for moreadvanced capabilities such as linking to onboard devices for driver communication. Routing and scheduling emerged as stand-alone solutions focused exclusively on batch daily planning, but newer systems are extending the functional footprint to include more capabilities such as dynamic rerouting based on changing conditions, dispatching, driver management and mobile functions such as electronic signature or proof of delivery. User Advice: Shippers that control the day-to-day operations directly or indirectly, and need planning tools to improve route and schedule creation, are prospects for these types of solutions. New or replacement buyers should focus more attention on the technical architectures of systems they are considering and should look at their needs beyond just planning. Business Impact: These solutions create routes and schedules that minimize miles and costs. They meet delivery objectives by considering multiple constraints of the truck fleet, which, combined, help improve delivery performance and reduce delivery costs. With escalating fuel costs, improvements in routes can significantly affect fuel usage and, thus, reduce energy expenses. Benefit Rating: High Market Penetration: More than 50% of target audience Maturity: Mature mainstream Sample Vendors: Mobitrac; Ortec; Paragon Software Group; Quintiq; The Descartes Systems Group; UPS (Roadnet)
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Appendixes
Figure 3. Hype Cycle for Transportation, 2007
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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visibility
Passenger In-Flight Electronic Access Financial Import and Export Management Biometric Identity Documents RFID (Item) Cargo Portals Transportation Industry RFID (Asset)
RFID (Warehouse) Software as a Service RFID: Airline Baggage Tracking Less-Than-Truckload Package Tracking
Maintenance, Repair and Overhaul Fleet Vehicle Tracking Micro Fuel Cells Driver Load Matching Global Visibility for TMS Business Process Outsourcing CRM RFID (Case/Pallet) Digital Signage in Transportation Remote-Diagnostic Telematics TMS Multimodel/International
Transportation Routing and Scheduling Revenue Management (Yield Management) Call Centers IP Telephony
Commercial Telematics Airline Self-Service Kiosks Satellite Navigation Systems Java Platform, Enterprise Edition
Strategic Network Design Supply Chain Analytics Fuel Management Multicarrier Parcel Manifesting Microsoft .NET Application Platform Passenger Services Automated Manifest System Loyalty Marketing As of July 2007
Technology Trigger
Trough of Disillusionment
Slope of Enlightenment
Plateau of Productivity
time
Years to mainstream adoption: less than 2 years 2 to 5 years 5 to 10 years more than 10 years obsolete before plateau
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Trough of Disillusionment
Slope of Enlightenment
Plateau of Productivity
High
Moderate
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Definition Slightly improves processes (for example, improved user experience) that will be difficult to translate into increased revenue or cost savings
RECOMMENDED READING
"Understanding Gartner's Hype Cycles, 2008" This research is part of a set of related research pieces. See "Gartner's Hype Cycle Special Report for 2008" for an overview.
Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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Publication Date: 9 July 2008/ID Number: G00158938 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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