March 2015

From Paralysis To Recovery, Optimization Offers Ports New Tech Remedy – a BoldIQ byline

Eight weeks is what the port of Oakland estimated it would take to recover from the paralyzing effects of the west coast port labor disputes. As much as eight weeks of delays for domestic car manufacturers to receive parts, grocery stores to receive food and retailers to get their hands on the new Apple Watches. And eight weeks for the U.S. exporters to get their goods to market overseas – at least those goods that will not have lost precious shelf life in this period of time.

With West Coast ports handling roughly a quarter of U.S. international trade valued at $1 trillion annually, the cargo backlog at its 29 ports is monumental. Associated Press recently noted that if you stacked all the backlogged containers from the ports of Los Angeles and Long Beach alone, they would rise to more than 300 miles, higher than the orbit of the International Space Station.

Did the port backlogs really have to reach this excessive level, or is it just a part of doing business when importing and exporting by sea freight? In today’s world of big data and advanced analytics, why can’t the ports have systems in place to recover more quickly from these types of events? Or better yet, how can they be poised to minimize the backlogs to begin with if we are to assume that disruptive events like the port slowdown can and will happen again?

The recent crisis is not an isolated event — there have been disruptions in the past and there will be again – whether from labor disputes, political strife or catastrophic weather conditions.

The ports cannot expect an improved result by waiting for the next disruption to occur and again try to figure out how to recover in the midst of a crisis. Ports must re-examine the overall philosophy that governs their entire operation, so when they are faced with the next disruption, they can recover far more quickly and the impact will be minimized.

Right now ports operate with various degrees of computer-assisted decision-making. Where it exists, like in staffing, container planning or berth scheduling, it provides more of a planning aid.

Systems such as these certainly offer a degree of efficiency. But they largely still rely on human intuition, offer little to no insight into how decisions impact the port as a whole, and don’t provide a level of planning and solutions that exceed the operators’ own planning capability. The vulnerability of this philosophy is dramatically heightened whenever there is a disruption because the port is trying to react to a disruptive situation in an already non-optimized operating environment.

To overcome and preempt this damaging ripple effect, ports need to deploy an operations philosophy that accounts for and takes advantage of the entire sum of their parts. Within a very complex and unpredictable environment, ports need to know that they are maximizing each and every resource within a port for their own benefit and the benefit of their customers. And they need to be able to adjust rapidly to any change or disruption they face.

Ports should not have to question whether resources are in the most optimal location to minimize wait-times, cost and maximize the efficient transport of goods. Once ports accept a holistic view of operations management, they can then look at the technologies available today to realize their full potential.

So ports may wonder, what does an optimized port system look like? Do the technologies even exist to provide real-time dynamic operations optimization? The ports don’t need to look any further than the aviation industry.

Take private jet company JetSuite. Built by one of the founders of JetBlue, JetSuite’s business model of affordable, on-demand air travel depends on a holistic operations philosophy. The company has figured out how to maximize its resources relative to the needs of the entire airline rather than just its individual parts.

Like the ports, JetSuite must operate within a highly regulated, complex and unpredictable environment, managing factors such as fluctuating customer demand, regulatory and operational constraints, resource maintenance, changing fuel prices, staffing schedules, and of course unpredictable weather.

But unlike the ports, JetSuite deploys a technology to manage all of its resources in a dynamic real-time fashion. Despite daily changes and disruptions and fierce competition among more established airlines, the young airline has risen to fourth in total revenue hours flown and second in aircraft utilization among its peers.

Similar systems have been deployed for transportation, drones and staffing management, which have realized as much as 16 percent reductions in operating costs and 20 percent increases in capacity using only existing resources. These industries have begun to realize the value of operations-focused advanced technologies.

Our ports can realize this value, too. They can increase throughput of their ports without investing in capital or trying to enlarge their geographic footprint. And they can diminish the damage done to global trade by such a labor dispute.

Instead of taking eight weeks to recover, what if the port only took four? This is attainable with the technologies we have today. This kind of operations optimization could make a difference of millions, if not billions, of dollars. Beyond the pure dollar impact, harnessing this type of technology will help ensure the longevity of importers and exporters and the economy as a whole.

Just as any other dynamic industry, the ports have very little control of when or what disruptions will happen in the future. But they do have the ability to transform the way they run their operations and how to best optimize resources so that every disruption recovery is far faster, less costly and, as a result, less burdensome on our economy.

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BoldIQ Looks To Mitigate Supply Chain Disruptions – An Industrial Distribution story by Mike Hockett

The manufacturing supply chain is still recovering from a nine-month long standoff between longshore workers and employers on the U.S. West Coast ports, and will for months to come. The labor dispute caused major disruptions resulting from port shutdowns, accused slowdowns, and all-in-all created a massive backlog of cargo that prevented goods from reaching warehouses and store shelves.

The port labor mess, which finally came to a resolution Feb. 20, was the most prominent example in the last few years of the major effects such a crisis can have on the supply chain. Other disruptions caused by labor issues, weather, accidents, or human error are unpredictable for those at ports, distribution centers, and factories.

Roei Ganzarski, President and CEO of BoldIQ, envisions a world where disruptions don’t need to be so disruptive. While supply chain crises can’t be predicted, their effects can be minimized through preparation, and that’s the purpose behind Seattle-based BoldIQ, which pilots a resource optimization and disruption management software.

In a nutshell, the software uses real-time data to create the best possible operating plans for an organization, taking all of its data into account including resources, demand, costs, rules, and constraints.

The key word with BoldIQ is optimization – designed for during times of disruption, as well as times of calm. The software takes into account all the moving parts of an operation and finds the solution that maximizes efficiency. So even when things are running smoothly, BoldIQ can find ways to increase profitability and growth.

Any company could grow by adding more resources. It can buy more trucks, hire more people, add warehouse space, etc. But that kind of growth is very costly. The aim of BoldIQ is to spur growth by maximizing resources already in place.

“By optimizing your business in real-time, all the time, you’re able to grow without investment,” says Ganzarski.

BoldIQ’s origins and most prominent applications so far have been in aviation, but the company is looking to branch out into more supply chain operations. Be it in shipping, fleet management, distribution, staffing, inventory, or beyond, there’s a wealth of opportunities.

“The key that we focus on right now is world complex dynamic industries,” says Ganzarski. “So basically it’s any industry in which you have a lot of resources, a lot of demand, where your environment continues to change every day – be it for good reasons or bad. They include transport, staffing, on-demand delivery, healthcare, energy distribution, aviation, etc. In all those industries, there is no such thing as a “plan” – there is just the best thing to do right now. And it changes, it could be a minute from now or an hour. That’s where our software sits, takes all that data, and continues to pump out the best solution for that specific operation and that specific organization for that period of time.”

How it works

So how exactly does BoldIQ work? How does it create an optimal operation solution? The software uses an algorithm that breaks an environment into four key parts: Resources, data around demands, rules and regulations, and business drivers. To illustrate this, let’s apply it to the ports industry.

  1. Resources – This would include ships, cranes, trucks, and employees, as well as the cost for each.
  2. Data around demands – This would include the number of ships/containers/trucks needed, how many of each are going in and out, how many are going on cranes, trucks, and trains.
  3. Rules and regulations – This would include port labor agreements/contracts, safety rules and limits.
  4. Business drivers – This includes operational goals such as easing the trade of goods, and the ports’ financial goals.

The software takes those four factors in real-time and says “with what I see now, what should I do?” and creates a solution that minimizes disruption and maximizes efficiency.

“It’s a chess game. You want to look 3-4 steps ahead, but every move of your opponent makes you adjust,” Ganzarski says. “This software says ‘this is the best plan right now.’ Now all the user has to do is see what options it gives them.”

The software can take much of the guess work out of supply chain disruptions. For example, if truck or shipment of valves is going to be late to a distribution center, or machinery breaks down, delaying an outbound shipment, the platform creates a solution that optimizes current inventory. Instead of naturally saying, ‘these valves were supposed to go to these 10 stores, so now those 10 stores will be out,’ inventory can be optimized to say, ‘I could now move this truck of valves to different stores where sales would be higher.’

“The engine, because it’s not very industry specific, can adapt to various problems with industries,” Ganzarski says. “You can apply it all the way up and down the supply chain to improve the overall industry.”

Origins

BoldIQ’s roots are in aviation. The software was built in the early 2000’s by PhD members of global software company Citrix as a means of driving all the moving parts of DayJet, an on-demand airline. DayJet operated with Citrix’ software for three years before going bankrupt in the 2008 economic downturn. But out of that, the software and key members of DayJet were retained, and the operation was moved to Seattle, where it eventually became BoldIQ.

“What we do today is basically – for lack of a better word – generalize that original engine, and continue to enhance it and expand on it,” Ganzarski says. “Today what it does is produce schedule plans in real time – and I’m talking milliseconds and seconds – for the best use of all of your resources to meet your demands – at any given time, given all of your data.”

Success Story

One of the best examples of what BoldIQ can do for an operation is what it’s done with private jet company JetSuite. In 2011, the California-based company had approximately 35 staff members and five planes servicing California, Nevada, Arizona, New Mexico, and Oregon. JetSuite set out to provide its service to a wider audience, but ran into challenges surrounding logistics and inventory. Things like last-minute customer requests, operational constraints, aircraft maintenance, staffing schedules, and changing weather limited growth.

JetSuite selected BoldIQ and implemented its software, managing the airline’s day-to-day operations. Today, the results speak for themselves. Since partnering with BoldIQ, JetSuite has grown from a $7 million company to more than $50 million in 3½ years, doubling its top-line revenue for four years straight. The company now has more than 200 staff members and 20 planes, servicing around 3,000 cities in the U.S., Mexico, Canada and the Caribbean. Recently, JetSuite was ranked fourth in total hours flown and second in aircraft utilization by aviation research group ARGUS International, even as the youngest charter airline of all companies considered.

What’s new?

BoldIQ is certainly staying busy. Following the lead of JetSuite, several other companies that provide airlines with operations management systems have recently partnered with with BoldIQ to utilize its software. Merlot.aero announced their partnership last November, and Jeppesen Solution followed suit in December. Back in June 2014,GlobeAir announced BoldIQ as its software provider in its integration of private jet platform PrivateFly.com. BoldIQ has also been looking into drone management.

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