In the spring of 2012, a new plant manager assessing the operations at the Daimler Trucks North America (DTNA) plant in Saltillo, Mexico, made a request to corporate headquarters: Find a way to handle the 1,000 or so trailers that were creating chaos in the yard. Daimler's information technology (IT) department got involved, deciding the plant should use a cloud-based yard management system (YMS).
What led the truck maker to take the cloud route rather than buy the necessary software? It was largely a question of infrastructure, according to the company. "Working in Mexico is hard," says Roderick Flores, a technology manager at DTNA's headquarters in Portland, Ore. "We did not want to have to set up servers in Mexico. That's why we chose a service solution in the cloud."
CLOUD CONTROL
Daimler Trucks North America, the largest manufacturer of heavy- and medium-duty trucks in North America, operates four factories in the United States and two in Mexico. Its Saltillo plant is one of DTNA's main facilities for making its Freightliner Cascadia line of Class 8 trucks.
Every truck made in Saltillo requires at least a trailer and a half worth of parts from suppliers, according to Flores. In the past, the Saltillo plant would keep paper records on all of the inbound trailers in its yard and coordinate the yard jockeys that were repositioning the trailers with handheld radios.
The new yard management solution—a system from Alameda, Calif.-based software developer Pinc Solutions—has changed all that. The application, which became fully operational in March, uses passive radio-frequency identification (RFID) tags in conjunction with the cloud software. (Unlike so-called active tags, which have their own power source, passive tags must be "energized" by an outside device to transmit a signal identifying their location.)
Today, when a shipment from a supplier shows up at the plant, the guard checks in the truck at the gate and affixes a tag to the trailer's bottom corner. The tag links the trailer to a particular driver and bill of lading. The tag stays on until the guard removes the device at checkout.
Occasionally, a shipment with urgently needed parts goes directly to the dock door of the plant. However, a trailer normally gets parked in a staging area in the yard. The trailer's location is pinpointed by antennas mounted on "yard mules," special trucks that reposition the trailers within the yard.
As the yard mules go about their business, their antennas generate a signal to ping the passive tags and identify the spot where the trailer is parked. The trailer locations are then relayed to the cloud-based software, which maintains an up-to-the-minute record of the equipment in the yard.
The yard mule drivers use computers in their vehicles to communicate with the cloud-based YMS. The computers allow them to record trailer movements, information that's also relayed to the cloud software via a 4G cellular connection. A plant supervisor can view the trailer locations on a map on a special website. The supervisor also uses the website to coordinate the movements of trailers from the yard to the dock door, thus maintaining the flow of parts required for truck production. Instructions entered on the website by the supervisor are relayed back to the yard mule drivers.
In setting up the system, the biggest hurdle for DTNA was the lack of adequate telecommunications in the northeastern Mexico desert, according to Flores. In 2012, in the Saltillo plant area, there was only one Telcel tower for cellular communication. A 4G system from Nextel Communications, a unit of Sprint Nextel Corp., was used to provide sufficient mobile broadband Internet access to laptops and other mobile devices. "Had we had the telecom in place, this project would have been done in three months," Flores says.
BETTER VISIBILITY, HIGHER THROUGHPUT
As for the results of the project, the solution appears to be paying off in increased throughput and efficiency at the Saltillo plant. Flores says DTNA now has 99 percent visibility into the whereabouts of trailers at the facility. That has allowed DTNA to unload four to six trailers an hour. Before, it was two to three.
Because the system has a fix on trailer locations, DTNA no longer needs workers to walk around the yard conducting equipment audits. Status updates allow DTNA to promptly notify the motor carrier when a trailer has been unloaded and can be retrieved. This reduces demurrage and detention charges imposed by truckers for delays in returning their equipment.
DTNA is now planning to roll out the yard management application at its other North American plants. In addition, Flores says he plans to use YMS data to develop metrics to drive further operational improvements.
With DTNA well past the YMS learning curve, what advice would Flores give to a logistics manager considering such a system? Know your requirements before choosing a solution, and visit existing customers of vendors under consideration.
Says Flores: "You need to go see the system in action."
Gartner, Inc.
