# Presentation: 193745

## Freight Technology Assessment Tool

**Freight Technology Assessment Tool**

## Agenda

- Background
- Freight Technology Assessment Tool
- Methodology
- Processes
- Performance Measures
- Technology Benefits & Costs
- Output
- Applying FTAT – Motor Carrier Efficiency Study
- Questions

## Background – Why DOT?

- Creation of Public Private Partnerships – Government is a facilitator or convener of groups of stakeholders
- Ability to provide research and development funding (seed money)
- Neutral party with interest in success of overall transportation network
- Government Participation
- Highway systems are at capacity today in many urban areas
- Freight forecasted to double by Year 2020
- Promotion of new technologies to increase the efficient flow of freight.

## Background – Opportunity

## Background – Goals

- Reduce congestion – Promote the exchange of information between public and private organizations.
- Improve efficiency – Projects that promote timely and useful information exchange between supply chain partners.
- Enhance safety and security – Projects that ensure that critical information is captured and disseminated to the appropriate facilities and organizations.

## Freight Technology Assessment Tool 

- Developed in 2004-2005 for FHWA
- Project Objective:  Provide a tool that allows the users to evaluate the effects of deploying a technology.
- Utilizes a qualitative and a quantitative approach
- Qualitative analysis: Rating the technology’s effects on a set of predefined performance metrics
- Quantitative analysis: benefit cost analysis based on a set of pre-defined cost drivers

**Notes:**
RWB

## Freight Technology Assessment ToolFTAT

## FTAT Methodology

- Input
- Define the supply-chain
- Performance metrics
- Cost drivers
- The technologies or best practices
- The technology effect for each performance metric
- The benefits and costs for each technology
- Output
- The benefit/cost ratio, plus other financial measures, are computed for each technology
- The technologies score

**Notes:**
RWB

## FTAT Methodology

**FTAT Methodology**

**Notes:**
RWB

## FTAT Methodology

**FTAT ****Methodology**

## FTAT Processes

- Defining and mapping the supply-chain
- Option 1: Define new processes.
- Option 2: Select supply-chain processes (SCOR processes)
- Supply Chain partners are defined on a geographical map and processes are defined/selected for each partner
- SC Partner (level 1 view) – describes the various entities participating in the supply chain (ie company, facility, organizational unit)
- Process – Defined at two levels (levels 2 and 3).  They represent the activities and transactions that each partner performs to move goods through the supply chain.  Level 3 is a decomposition of Level 2.
- The “as is” cost for each process and the process “as is” cost driver

**Notes:**
RWB

## Level 1

- Level 2

- Level 3

**FTAT Processes – Supply Chain**

## FTAT Processes

## FTAT Processes

## FTAT Cost Drivers

- A characteristic that drives the changes in cost level
- Example: Order Processing
- Cost Drivers: Number of Orders & Time per Order
- Uses of Cost drivers: Compute process improvement component of a certain technology

**Notes:**
RWB

## FTAT Cost Drivers

## FTAT Performance Measures

- Seven performance attributes
- Reliability
- Responsiveness
- Flexibility
- Cost
- Asset Management
- Safety
- Security

**Notes:**
RWB

## FTAT Performance Measures

- Each performance attribute includes a set of performance metrics, for example
- Transportation lead time
- Order fulfillment lead time
- % shipments received damage free
- % schedules changed within lead time
- Shipment Security
- % shipments visible/traceable during transportation
- Cash to cash cycle time

**Notes:**
RWB

## FTAT Performance Measures

## FTAT Technologies

- Costs of technology are the total amount of money invested to realize, implement, and sustain a supply chain technology
- Benefits of a technology are the positive monetary gains on the supply chain, including:
- Cost savings resulting from improving processes
- Cost savings resulting from eliminating processes
- Reduction or elimination of miscellaneous costs such as customs fees, pilferage, etc.

**Notes:**
RWB

## FTAT Technologies

**Notes:**
RWB

## FTAT Technologies

**Notes:**
RWB

## FTAT Technologies

## FTAT Technologies

## FTAT Technologies

## FTAT Analysis

- Quality Function Deployment - QFD is a qualitative analysis technique that can be utilized to motivate organizations to focus on their most critical needs.  It is a methodology for taking the input of numerous stakeholders and using that information to drive the decision making process.
- Benefit Cost Analysis - a quantitative analysis technique that evaluates the monetary benefits of a set of technology projects versus their associated costs (NPV, BCR, IRR, etc.).

**Notes:**
RWB

## FTAT Analysis

## FTAT Output

## Applying FTAT Motor Carrier Efficiency Study

- MCES – Directed by SAFETEA-LU Section 5503
- Major Study Components:
- Identify high-priority motor carrier inefficiencies
- Examine the application of wireless technology to provide needed capabilities
- Perform hypothetical benefit-cost analysis
- Progress to Date:
- Defined supply chain segments
- Identified process-specific inefficiencies
- Captured data to define effects of inefficiencies
- Will use FTAT to Perform Preliminary B/C Analyses
- 10 “Scenarios”
- Various trucking operations and trip types

## Applying FTATMotor Carrier Efficiency Study

## Applying FTATMotor Carrier Efficiency Study

**Level 2 Process Depiction**

## Applying FTATMotor Carrier Efficiency Study

**Level 2 Allocation of Inefficiencies**

## Applying FTAT – Motor Carrier Efficiency Study

**Specific Inefficiency Effects**

## Applying FTATMotor Carrier Efficiency Study

**Level 3 Subprocess Depiction**

## Applying FTATMotor Carrier Efficiency Study

**Using FTAT:**

**1.****	****Input specific data regarding current activity results, duration, and costs**

**2.****	****Identify likely individual changes to activity results, duration, and costs, at the subprocess level**

**3.****	****Input anticipated implementation and use costs for technology and process changes**

**4.****	****Execute calculations within FTAT**

**5.****	****Examine changes to overall “bottom line, including performance enhancements and costs**

## Applying FTATMotor Carrier Efficiency Study

- The MCES FTAT Analysis Results Will:
- Clarify Opportunities
- Better define specific sources of inefficiencies
- Quantify and qualify potential benefits
- Enhance Knowledge
- Consolidate information from multiple sources
- Provide numerical evidence
- Facilitate Decision-Making
- Provide means for comparative analysis
- Provide basis for selecting Phase II pilot projects

## Questions/Discussion

## User Guide

## Contact Information

- Randy Butler – FHWA
- randy.butler@dot.gov
- 202.366.9215
- Paul Belella – Delcan
- pbelella@delcan.com
- 703.752.6060 X 104
- Nathan Rychlik – Productivity Apex, Inc.
- nrychlik@productivityapex.com
- 407.384.0800