Last week, we published a guest commentary by Greg Brady on creating “a truly integrated logistics operation.” Brady made the case that companies need to take a more holistic perspective of their transportation operations (inbound and outbound; domestic and international; private fleet and common carriers) and he suggested that using a single platform for managing these operations was the ideal solution. As we highlighted last year in “The Expanding Footprint of TMS,” software vendors are transforming TMS from a fragmented collection of applications to a unified platform where users across the enterprise and value chain can execute role-specific processes via configurable user interfaces, workflows, and web services.
But is having a single TMS system that does it all necessarily better than integrating multiple best-of-breed solutions? A Logistics Viewpoints subscriber, Logisticsexpert, a logistics executive at a Fortune 200 company, posted a comment in response to Brady’s piece that essentially asked and answered that question. Here is an excerpt of his comment (but you should read the full text to fully understand his viewpoint):
One of the biggest changes in software has been the incredible interoperability of the software and the fact that the need for a singular “stack” is removed. You can truly get specific applications for specific reasons.
So, I am in agreement that this must all be integrated to get a true view of your supply chain. However, this does not translate into a singular “system” but rather a very integrated plan across multiple layers of your systems and processes.
I believe Brady’s and Logisticsexpert’s viewpoints are both valid and the “right” approach really depends on a company’s specific operational requirements and existing IT landscape.
For example, if optimization across operations is possible and desired, such as optimizing private fleet and common carrier operations, then I believe having the models and data reside in a single solution is ideal. However, if the main objective is having visibility across the different operations, then taking an integration approach might suffice. The push by many CIOs to simplify and standardize IT environments is another factor that comes into play, sometimes at the expense of operations having the best solution (or set of solutions) available.
I agree with Logisticsexpert’s point that changes in the software industry have greatly improved interoperability between systems. Just look at the longstanding debate of ERP versus best-of-breed. Historically, the debate has centered on topics such as integration and the tradeoffs between functionality and standardizing on a single platform. But over the past few years, as software vendors have migrated away from proprietary platforms and embraced open standards and services oriented architectures (SOA), and as ERP vendors have changed course from “developing everything ourselves” to acquiring best-of-breed vendors and establishing an eco-system of partners, the nature of the debate has changed. This is particularly true for transportation management systems. In many cases, the decision many CIOs and transportation executives face today is not between an ERP and a best-of-breed solution, but between an internally-deployed application and a software-as-a-service (SaaS) solution—or, more broadly, a network-centric solution (for related commentary, see “An Overlooked (But Critical) Component of Transportation Management Systems” and “IBM to Acquire Sterling Commerce: The Big Picture”).
So, there you have it, three perspectives on a single topic. What’s your viewpoint? Post a comment and keep the conversation going!
I received the following comment via email from a Logistics Viewpoints subscriber who gave me permission to post it:
I agree with [Logisticsexpert’s] response. What you make, how [you make it], and where dictates what matters most. The problem is “holistic” means different things to different people and [it] grossly oversimplifies a very specialized world of planes, trains, trucks, forwarders, governments etc.. If I am a discrete component assembler and I have a worldwide shop floor in a build-to-order model, I have a very different set of needs than if I am a vertically-integrated furniture manufacturer who owns retail stores [or a company that] exports medical equipment or pharmaceuticals. Logistics is about specialization. Yes, inbound and outbound should talk. Yes, there should be metrics. Should there be ” one system of record”? Well, this sounds nice for some, but for others it will never happen. Nor is it necessary. The goal is not one system of record, nor is it needed. The reality is that in a supply chain every party has “systems of records,” so the real issues surround how to be action oriented [and have] goal-driven metrics based around these systems. Look at a [freight forwarding] guy who books air freight and makes reservation allotments with airlines for his computer customers. [He] does not need a single system of record that also tells him the pickup and delivery performance of all the pickup and delivery services supporting trucks that feed the airlines. He needs a booking and reservation system. He needs another system to manage the dispatch and tracking of pickup and delivery and the network performance. His customer needs to see rates, services levels, etc. These two systems don’t need any “single system of record” yet each one is a “system of record.” This is specialization of process. I find the holistic TMS discussion just another recycling of stale and old concepts of ” single systems of record” and I suspect it will only lead to [user] discontent.