George Harry, CEO of Red Ball Express, was frustrated and upset with the latest
ID: 363296 • Letter: G
Question
George Harry, CEO of Red Ball Express, was frustrated and upset with the latest quarterly report on profit margins and overall level of profit for the company. Increased fuel prices were a concern for several of the previous quarters during the current year, but George thought that this quarter would be better since fuel prices had declined somewhat. However, Red Ball’s operational costs were approximately the same this quarter as the previous three quarters. Just then, Dave Smith, one of his newest hires, came into his office without knocking, which was unusual. George could tell that Dave was excited and then Dave exclaimed, “Wow, George, did you see the latest issue of Motor Carrier News?” George indicated that he had not had the opportunity to review the magazine, and asked, “What is so darn exciting about it?” “Well, our biggest competitor, Roadway Carriers, was featured in an article for their cost-saving initiatives.
They are expected to make a significant improvement in their profit for the last quarter. Our shareholders are really going to be upset when they see our quarterly results.”
George wondered how Roadway did it and immediately asked Dave that question. Dave indicated that the article discussed some new technology that they were using to improve equipment and driver productivity. Specifically, he mentioned RFID tags and GPS systems. George was not familiar with the new technologies and asked Dave to prepare a report on technology that Red Ba.
CASE QUESTIONS:
1. Help Dave prepare this report by providing some information on the benefits of RFID tags and GPS systems in the transportation industry.
2. Are there additional technologies that Red Ball could implement to help them improve efficiency? Explain.
Explanation / Answer
Q 1. Help Dave prepare this report by providing some information on the benefits of RFID tags and GPS systems in the transportation industry.
A 1.
RFID stands for Radio Frequency IDentification and GPS stands for Global Positioning System
RFID is a technology that incorporates the use of electromagnetic or electrostatic coupling in the radio frequency portion of the electromagnetic spectrum to uniquely identify an object. RFID technology consists of 3 components: 1. antenna
2. transceiver (often combined into one reader) and
3. transponder (the tag).
The antenna uses radio frequency waves to transmit a signal that activates the transponder. Transponder, once activated, transmits data back to the antenna. The data is then used to notify a programmable logic controller to trigger an action. The action could be as simple as raising an access gate or as complicated as interfacing with a database to carry out a monetary transaction.
RFID, by virtue of its many advantages, is an extremely popular system in the logistics domain. Some of its benefits are as follows:-
1. There is no limit to the data capacity of an RFID tag
2. They can be read multiple times and has a very long life
3. They are very secure
4. Multiple tags can be read simultaneously
Some of the usage of RFID is as follows:-
1. By pairing the asset to its owner and or a location, the RFID tag can send instant alerts if an asset is moved out of a location without its owner, or moved to a prohibited location.
2. The tag provides provides an audit trail of asset movement.
3. The tags for document tracking greatly reduces the time spent searching for books or documents. It can be used to identify items that are misplaced or not stored appropriately, thus improving the organisation of documents, materials and files.
4. They make the transfer of confidential files and documents more secure
GPS or Global Positioning System is a network of around 30 orbiting satellites that orbit the Earth. Due to this system, anybody on the planet with a GPS receiver can send precise details of his/her position with extreme accuracy. Some of the benefits of this system is as follows:-
1. Accurate position mapping with a small chip
2. Tamper proof and works 24 X 7
In the transportation industry, both RFID and GPS have been proved to be immensely beneficial. Some of the inherent benefits of these two techniques that help this industry are as follows:-
1. Reduces costs arising out of manual error and intervention
2. Improves efficiency by effective tracking
3. GPS will help in identifying the best possible route thus reducing running cost
4. RFID will increase in safety and security thus reducing in pilferage or lost cases
5. Manage truck and people load through use of both GPS and RFID
6. Customer satisfaction
Overall the use of RFID and GPS has great potential to help a logistics company reduce cost, improve efficiency, improve customer satisfaction and become more competitive in the market.
Q 2. Are there additional technologies that Red Ball could implement to help them improve efficiency? Explain.
A 2.
The base of the transportation industry is on th fleet management, staff management, customer management and operations management. Some of the other techniques that can help Red Ball improve its efficiency are as follows:-
1. Sensor technology can be fitted on to the vehicles and accurate information on multiple things related to the vehicle parameters can be monitored. This will help improve preventive maintenance and thus reduce downtime of vehicles causing inefficiency in the system
2. Load optimization can improve the delivery efficiency vastly thereby increasing revenue per fleet unit. Clubbing of deliveries will help in reducing the costs and increase revenue.
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