BP monitors the rails

For any company that ships products by rail, RFID is old hat. For the past 15 years, to generate data points for routing and scheduling, the railroad industry has used electronic tags that trigger CLMs (Car Location Messages) every time a car passes a scan point.

But BP has broken new ground. Along with adding car-mounted GPS devices to improve tracking, the company has deployed sensors to detect the temperature of the payload, determine how full a car is, measure the ambient temperature, and log any horizontal or vertical impact events.

The sensors are hardwired to a custom-configured computer on the car. The computer, which uses a battery pack that lasts three to five years, has a transmitter connected to a satellite system. The data is encrypted, compressed, and sent back via satellite to the communications provider, which decompresses the data and forwards it to BP. There, a homegrown, exception-based application built on Microsoft’s .Net platform aggregates and analyzes all the data.

By adding sensors to the railcars, the international mining, oil, and gas company combines location data with product, railcar, and shipment data, giving BP what project lead John Diendorf calls “comprehensive visibility.”

BP software engineers kicked the value of the solution up another notch when they added a decision-support solution for its supply-chain managers to optimize shipments to customers. For example, BP railcars are leased, not owned. If a railcar has been unloaded, but is now sitting idle at the customer site, that costs BP money. A BP manager who bases customer pricing on a cost-to-serve model can use that information during contract negotiations to help the customer understand the repercussions of holding on to equipment, according to Diendorf.

BP also believes the solution will dramatically increase the number of “turns” or cycles it gets out of equipment. The system has built-in thresholds, so that if a car sits idle due to a derailment, for example, an alert shoots to the customer service representative.

Diendorf also says the system helps BP be a more responsible shipper of hazardous chemicals. Not only does BP know where its product is at all times, but with the use of sensors, it also knows if a car is leaking or if a hatch has come open in transit.

Future plans call for BP to share its data with customers. Until now, paper and fax systems left gaps in the basic information given to customers, such as what products were in route. By knowing what the shipment is and when it will arrive, customers can reduce the amount of safety stock they keep on hand.

Diendorf expects a significant ROI on BP’s $1 million-plus investment, but BP policy would not allow him to be more specific in details. One indication of the project’s success, however, is that BP is preparing to deploy the system in its European operations.

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