Trane Technologies Embraces a Digital Twin to Optimize Logistics
Tom France, the vice president of distribution at Trane Technologies, gave an entertaining presentation in early October of this year at a FourKites online conference. Trane Technologies uses the FourKites real-time transportation visibility and yard management solutions to help optimize logistics.
Trane Technologies had sales of $12.5 billion in their last financial year. The company provides climate control solutions under brands that include Trane – commercial and residential heating, ventilation, and air conditioning (HVAC), American Standard – residential HVAC, and Thermo King – transport refrigeration. Two thirds of the company’s revenues come from equipment sales. The remainder comes from aftermarket sales and service. The company has committed itself to providing efficient and sustainable climate control solutions that reduce global emissions linked to the heating and cooling of buildings and food waste. The company aspires to run an integrated supply chain focused on creating a seamless process from customer demand through the entire product and service lifecycle.
The Trane supply chain is challenging. The equipment they ship is often too large to go in one truck and needs to ship in multiple pieces. They have a returns supply chain, including returnable packaging; returns can be tricky. But they also ship aftermarket parts, which is more normal freight. Consequently, they ship in modes designed to support very large products – roll-on/roll-off ships and heavy air – to modes for small products, like parcel, as well as truckload and less-than-truckload. They had 150,000 shipments just in the US last year. They ship to 6,000 dealers on any given day.
Trane is using FourKites yard management system (YMS) at 11 sites. This was partially driven by the increasing difficulty in getting carriers to accept loads. There is more demand for trucks than supply. Carriers have choices. To be relevant with transportation providers, Mr. France explained, Trane needs to be friendly for carriers to do business with. The yard management system allows truckers to choose the slot they want and allows truckers to get back on the road faster.
But the YMS and real time visibility, when integrated with warehouse and transportation management systems, also allows for more optimal operations. If a yard has 50 dock slots available, those slots need to be used efficiently. The visibility in the system allows for better decisions to be made about what the mix of trailer and carriers needs to be, which dock doors can be used for live loading versus loads that should be dropped in the yard, and for a leveling of volumes across the sites. Better visibility into how full the trailers were and what was in trailers allowed Trane to move from a first in first out process at the docks to being able to make better decisions on which truck really needed to be worked on as soon as possible. In short, the solution empowered better and more rapid decision making.
While there were a variety of benefits, including better service to customers, Trane got payback from this implementation in less than 3 months based just on reducing their detention fees. This project is part of their journey to get to full digital twin of their supply chain including regional control towers. Mr. France said some companies want to jump from a low level of visibility maturity to a robust control tower environment working on one version of the truth. He cautions against that, there is value in the journey.
“Start at your worst facility”, Mr. France advised. During the pilot, you may learn that even though the technology works, it can’t work well if there are data gaps. Once your company understands the data gaps, accountability must be established. This accountability needs to happen in two areas: Who is responsible for data analytics and data defects at your company? And, what is the methodology to hold carriers accountable if they are providing incorrect or untimely data?
Mr. France’s most interesting advice centered around how to pick an IT supplier. “I used to think, we should not be an early adopter; that that is nothing but trouble. But being a fast follower is just being a follower.” In today’s environment, there is no reason not to be an early adopter. You can work with a company on the leading edge of visibility, FourKites in his opinion, start small, and then scale fast.
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