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CEO
LoJack Supply Chain Integrity
Forney, Texas

LoJack SCI's cargo tracking and recovery system is filling the holes in the supply chain.

In 13 years as a senior vice president at Ingram Micro, Robert Furtado developed the company's logistics and supply chain programs. The difficulty in building sophisticated technology for the largest computer products manufacturer in the country was watching the product go out the door.

"The most frustrating part for me was that, as soon as I turned it over to a carrier, I lost all visibility and control and assumed all risk," Furtado said.

Perhaps that's why it's so rewarding for him to embark on his most recent venture as CEO of LoJack Supply Chain Integrity. In 2004, Furtado became a founding investor and director of a company called Supply Chain Integrity, in which LoJack began investing in 2006. Last year, the stolen vehicle recovery experts became a majority shareholder in the company, creating LoJack SCI.

As a major investor, Furtado has achieved a certain satisfaction in overseeing a product that enables logistics providers to maintain control of their cargo as it moves through the supply chain. The InTransit system, combining GPS, cellular and radio frequency technology, offers covert cargo tracking with real-time surveillance and Web-based monitoring, all integrated with law enforcement for dispatch and recovery. The tracking device is typically implanted somewhere in the cargo, not in the transport vehicle. A 24-hour monitoring center keeps a close watch on the goods.

"Most of the time with thefts, the cargo is long gone after the truck is recovered, and the value is worth much more than the truck or trailer," Furtado said.

Success stories with the cargo tracking are compelling. In one case in Texas, Furtado said, there was a hijacking at gunpoint of tobacco products. The movement of the load was monitored, police were notified and the million-dollar load was secured in 40 minutes. In another case, a cell phone manufacturer's cargo was stolen, and when LoJack SCI helped authorities secure the valuable load of cell phones in a warehouse, law enforcement also discovered an additional $4 million worth of stolen goods and tied the thieves to organized crime in the Miami area.

Dan Greenberg, new product manager at Fujifilm, is a client of LoJack SCI. Fujifilm manufactures cartridges that are used by large corporate IT data centers, which are required by law to back up data. LoJack SCI created a customized product called Tape Tracker, essentially a mock tape cartridge housing the tracking technology that fits in with the rest of the cargo being moved.

"We had evaluated a couple other players, some defense contractors and other tracking companies, but no one could offer the level of customer service and real-time monitoring that was backed by LoJack," Greenberg said.

Furtado said there are already hundreds of customers with thousands of devices deployed.

"Most security money is spent in guarding facilities and not in the supply chain," said Furtado. "There is an increasing awareness about risk management in in-transit operations as opposed to goods sitting in a warehouse, and I'm trying to bring a higher level of protection to the part of the supply chain that is the most vulnerable."

--By Erin Gazica

Robert Furtado developed a solution to a problem in the supply chain that persisted without a solution--the theft of in-transit cargo, mostly expensive cargo. An answer could give his company, LoJack Supply Chain Integrity, a competitive advantage.

But Furtado believes in sharing, and he has become something of an industry advocate offering help with solving a difficult, industrywide problem and developing a set of best practices. He defines part of his job as raising the awareness of the problem even among his competitors, but certainly among the industry at large.

In particular, Furtado works with the Supply Chain Information Sharing and Analysis Center to help the industry become far more knowledgeable about the vulnerabilities of cargo during the actual in-transit process. The results are exciting: millions of dollars worth of cargo recovered while "on the road."

CEO
GreenRoad Inc.
Redwood City, Calif.

GreenRoad's monitoring system coaches bad drivers, from veteran taxicab owners to teens newly issued driving privileges.

Ten years ago, the biggest thing in the logistics industry was supply chain management software. Today, it's a standard tool, and no company could compete without it. Dan Steere, CEO of Redwood City, Calif.-based GreenRoad Inc., said the feedback he's received so far about the company's driving monitoring system launched in 2007 indicates that, in a few years, it will be impossible to manage a fleet of vehicles without it.

While it might sound like a lofty statement, the GreenRoad system has impressed investors, risk managers, insurance companies and consumers.

GreenRoad's service provides instant, in-vehicle feedback from a red-yellow-green LED display. Sensors analyze up to 120 separate driving events in five categories: speed handling, cornering, lane handling, braking and acceleration. Patented algorithms associate risk with vehicle movement and categories of driving and automatically assess driver safety.

Drivers are classified as red (high risk, 50 or more risky events per 10 driving hours); yellow (attention required, 20-49 risky events); or green (safe, 0-19 risky events). The data feed from the device in the vehicle automatically updates the online reports and analysis available to drivers and fleet managers. Web-based and e-mail reports provide individual trip detail, risk analysis and coaching.

"With camera systems, you have to take all the data and footage and look at it frame by frame and see what is good and bad," said Robin Harbage, a consultant at EMB who previously spent 20 years with Progressive Insurance, mostly in product development. "This system with the lights, they show you immediately if you do something good or bad and later translate that into a score. The immediacy of the feedback makes improving driver behavior automatic."

Dave Huber, a director at AAA who is analyzing the GreenRoad system in a pilot program aimed at improving driving safety in teens, said the product stands out compared with other systems, particularly in-vehicle video cameras viewed by drivers as "Big Brother."

"The emphasis is on coaching rather than others that are focused on reporting, which in a world with teenagers would be seen as kind of punitive," Huber said. "Rather than being caught doing something bad--Johnny was speeding--an alternative approach is to provide a little more insight into the behavior and ideally make suggestions to avoid some of those risky behaviors."

Huber said the GreenRoad system is appealing in many ways. It fits the AAA brand in regard to encouraging safety, and it finds a middle ground between teens and parents. GreenRoad also offers reward incentive programs for green drivers and can be leveraged by insurance companies to offer reduced rates for safe drivers.

GreenRoad's service has been implemented by more than 60 fleets in trucking and other industries including Stagecoach, T-Mobile, LeFleur Transportation, Ryder and the U.K. Ministry of Defense. The system has been shown to reduce crash costs by 49 percent and cut fuel usage by 7 percent to 11 percent. At about $30 a month per vehicle, users can see a return on investment in the first month.

"In my mind, as an insurance executive, this just blows me away," said Harbage. "If we could see this safety improvement throughout the auto industry, we would see an incredible drop in accidents across the board."

Steere said GreenRoad's system has been validated across every class of vehicle and across different countries and vastly different driving populations, from long-haul truckers and public bus drivers to taxicab operators and new teen drivers.

"We've led the way in a more effective approach to quantify risk," Steere said.

--By Erin Gazica

Port Enterprise Risk Manager
Port of Oakland
Oakland, Calif.

Risk manager for the Port of Oakland reels in an environmental deal worth bragging about.

When it comes to managing risk in the country's ports, the West Coast poses some unique challenges. Narrow in on the San Francisco Bay area of California, and environmental issues are particularly troublesome.

"Environmental is a major issue in West Coast ports," said Jane Keegan, risk manager for the Port and Airport Enterprise Department of the City of Oakland. "The biggest threat for our development can be environmental litigation, and I don't think it's anywhere near what it is on the East Coast. You're really doing risk analysis every day with environmental issues."

In the 20 years that Keegan has been with the port, she's become quite acquainted with its known environmental issues that had not been covered by insurance or third-party indemnification. The port is on 19 miles of property, largely created land on the waterfront that is highly regulated. Issues inherited from prior tenants include heavy metals in the soils from ironwork, military use in the first and second world wars, manufacturing facilities, rail yards and more.

Timothy C. Smith, a senior vice president with Marsh who nominated Keegan for the Risk Innovator award, was impressed by Keegan's vision of a multiyear environmental insurance program. Her plan was for comprehensive coverage for first-party cleanup and third-party liability, as well as enterprisewide coverage for known and unknown environmental liabilities. It was to cover sites ranging from a golf course built on reclaimed land to rental car facilities to abandoned manufacturing sites.

Keegan created a team with representatives from the port's legal, engineering and environmental departments to determine what exposures were out there, the extent of them and how hazardous they were. After conducting studies internally, Keegan met with Marsh brokers to craft a policy that dealt with all exposures affecting the port.

"I think in terms of the depth and the study, the due diligence was certainly exceptional," Smith said. "She was very thorough in the submission she made and in the sharing of information that the taskforce had. The underwriters thought they had a very complete and thorough knowledge of the exposures."

Coverage for known liabilities is a unique feature in environmental insurance policies, particularly for the port, which had substantial liabilities. Convincing the underwriters to take this risk on was no small feat.

Good thing they were all well acquainted with Keegan. She began developing a relationship with all the players 10 years ago when Oakland became the first port in the United States to use risk transfer through an environmental policy for a military base. That decade of good relations made all the difference. Not only was Keegan able to secure enterprisewide coverage for unknown and known liabilities, she did it at a competitive price.

Smith said it helped that Keegan is a leader in the risk management community in the San Francisco Bay area. "Her respect in the risk management community was a major plus. She has been at the job for 20 years, she is very active in RIMS and an officer in the California Port Authority. She has a very high professional reputation and image."

The icing on the cake? Keegan was able to develop an effective cost-allocation system to recapture much of the cost of the premium for this environmental coverage by allocating it to developers and tenants of enterprise land covered by the insurance. In doing that, she helped ensure the financial sustainability of the port, which is heavily indebted, and secured funding for remediation of known and unknown environmental hazards that could be detrimental to the health of thousands of employees as well as local residents.

Transferring costs to the private industry makes a tremendous impact and not just in terms of creating bottom-line profit but in saving and creating jobs. Keegan also helped community relations, which had suffered due to publicity about the port's lack of commitment to improving the environment.

It was the cost and community benefits that led Smith to refer to Keegan as a "visionary practitioner."

"This was creative in the sense that you have a public entity engage in a practice you would expect to see out of private industry," said Smith. "In getting the cost-allocation system, she was able to assist the port in its own cash-flow position, which had become very critical."

In the end, Keegan's initiatives sent a strong message, which is that the port is serious about environmental cleanup.

--By Erin Gazica

Environmental problems are ripe for public controversy, especially political controversy. They have just the right mix of factors that can torpedo a solution even before it gets off the ground. And a port is among the most common locations to find controversial environmental issues.

Enter Jane Keegan, risk manager for the Port and Enterprise Department of the city of Oakland. She's been at the port for more than 20 years and has worked diligently to cultivate the trust and support of a slew of leaders in different government jurisdictions, along with trust of the neighborhood and city surrounding the port. Keegan found an unusual solution--insuring the known environmental risks on the site.

During this time, she also developed a reputation as a leader in the San Francisco Bay risk management community. Then she was able to sell the insurance risk transfer solution along with a unique cost-allocation process among all the players. And it was her abilities and respect that made it possible to get it done.