Author Archive for Fabrizio Brasca

fab_brasca_jda_2013_1_medNo, this is not yet another article about capturing network milestones or establishing better carrier connectivity, but rather the more strategic issue of how companies can raise the visibility of transportation within the domain of corporate initiatives.

I recently attended the American Shipper Executive Summit in New York City and early in the agenda, Eric Johnson, research director and IT editor for American Shipper, presented a view on the transportation information technology landscape.  One of the things that really struck a chord with me was that a key barrier to the adoption of new technology is a lack of corporate priority for transportation as a functional domain, and consequently, a failure for transportation projects to rise above the fray against competing projects.

As I hit my twenty-year milestone in the transportation and supply chain technology field, I think it is timely to share what I have seen as successful characteristics and approaches in raising the importance of transportation technology in the corporate landscape.

 Go Beyond the Easy

“Think little goals and expect little achievements. Think big goals and win big success.” David Joseph Schwartz, motivational writer

When I started in this space, transportation was generally a little-considered part of a company’s corporate strategy, if considered at all.  In many organizations today, however, it has earned a seat at the strategic table.  What I have observed in those organizations that have been successful in raising awareness of this domain is the will to go beyond solving the basic “bread and butter” challenges to also address the tougher problems.

For example, over the past several years I have witnessed several instances in which consumer goods companies have had their transportation initiatives mentioned in their annual reports.  In each case, the initiative in question went beyond the basics of carrier assignment or better carrier tracking and freight bill auditing.  Instead, they focused on advanced strategies for establishing a true shared service logistics organization spanning divisions and geographies, better utilization of large pools of assets holistically and concurrently with commercial freight, and in some cases, even creating a revenue stream from their excess capacity. These more advanced strategies garnered both management and stakeholder attention.

Roadmap versus Project

The counter argument to thinking big and tackling tougher problems is that doing so takes time and greater investment.  It is normal for those of us who are naturally risk averse to shy away from taking on such big projects.  This leads to a second concept in which I am a firm believer and consistently advocate: to think in terms of roadmap rather than project.

Successful companies in transportation, or in any business for that matter, do not think in terms of projects.  They have a long-term view of where they want to be and use that to create a roadmap for growth.  Taking this view provides two key benefits for raising the visibility of transportation in the management approval process.  The first is that having a long-term vision of how the project maps to the corporate growth strategy provides a better foundation for approval of individual project-level funding than a project presented in isolation.  The second is that a long-term vision provides the engine for continuous improvement, and hence, sustainable value that a short-term project focus lacks.

End the Isolation

Another emerging trend for which I am certainly a big proponent is the leveraging of transportation beyond its current role as an isolated, execution-level function.  Certainly, we have seen some convergence with the warehousing domain, with some companies adopting more comprehensive strategies and approaches than others.  But what about the world of upstream supply chain planning?

Transportation is a unique entity in the world of supply chain in that it truly straddles the worlds of planning and execution. Yet organizations rarely leverage the former beyond a near-term implementation.  Again, I have seen that those organizations that leverage their decision points across a broader time horizon (than just execution) have also been more successful raising the visibility of the transportation domain.  Considering capacity, modal decisions, and route alternatives across a diverse set of time-based and functional decision points creates a level of importance beyond simple execution.

Beyond Technology

The last thought I will leave you with, and certainly an interesting one coming from someone in the technology field, is to not consider technology as a solution on its own.  Technology is only one piece of the puzzle when it comes to improving performance. It must be complemented by process as well as people.  This may seem like a cliché, and yet time and again I encounter projects that focus on embedding new technology into an existing process without understanding whether the process itself is good or flawed.  The achievement of sustainable value, which creates corporate visibility, has to include being intellectually honest in evaluating current processes, particularly in view of the corporate long-term strategy.

By going beyond simple cost factors to take on the larger transportation challenges, mapping transportation projects to long-term corporate strategic growth plans, integrating planning and execution elements for greater synergies, and evaluating processes and human factors; transportation management professionals can raise the visibility of transportation to corporate executives and stakeholders and increase the likelihood of getting transportation initiatives approved and funded.

 

As Vice President of solution strategy at JDA Software, Fabrizio Brasca (@FabBrasca) is responsible for developing innovative strategies across all industry verticals, strengthening executive-level relationships with JDA’s key customers and prospects, and advising companies on best practices. He holds an Honors Bachelor of Mathematics co-op degree with a specialization in business and information systems from the University of Waterloo, Waterloo, Ontario. The author invites comments or questions from readers. He can be reached via email at fab.brasca@jda.com.

Those who ignore history are doomed to repeat it. That applies to supply chain operations as well. If we don’t learn from what is happening day-by-day in our supply chains, we are doomed to repeat disconnected planning processes that lead to mismatches between supply and demand. These mismatches are costly and can lead to service problems such as out-of-stocks and over-stocks.

But with fires to fight every day it’s hard for supply chain managers to find time to apply the lessons of the past to better plan for the future. An integrated set of supply chain visibility, planning and execution solutions can help to optimally re-plan fulfillment impacted by a natural disaster; shift inventory to account for regional demand variations; or re-plan transportation to accommodate new priority shipments.

Improving supply chain operations must start with supply chain visibility. Without visibility into what is happening in the supply chain, planning will be based on old norms, rather than current realities. As a result, managers must react manually to changes and disruptions that come their way. And manual adjustments are usually not optimal.

Supply chain visibility provides forecasting systems with current, relevant information on which to accurately forecast what demand will be at the point of consumption. Visibility alone has only marginal value, however. That’s why early standalone visibility systems never prospered. Visibility solutions must be integrated with planning and execution systems to create real value by more accurately positioning inventory to match expected sales, and to enable managers to react immediately when disruptions occur. This closed-loop, visibility/planning/execution process creates supply chains that are more cost effective, profitable, and provide better customer service.

Supply chain visibility traditionally concerns inventory and supply disruptions. While this is important, it doesn’t allow supply chain operations to learn from history. That comes from demand-side visibility. Visibility to demand—what is selling on a day-by-day basis—provides feedback to forecasting that enables a better understanding of what is happening on the street. This allows planning systems to create and adjust plans to more accurately match inventory, labor, and transportation to forecasted demand at the point of consumption.

Thus, there are two sides to supply chain visibility—the demand side, which more accurately matches inventory to demand, and the supply side, which provides real-time information to alert execution operations to supply chain changes and disruptions. This creates a continuous learning process for iterative planning and execution.

Traditional planning processes can’t understand and respond to today’s constant, rapid-fire changes in customer demand. Analytics have been added to provide feedback into the planning process. But this is often too slow to adequately react to daily demand shifts and usually is not connected to execution systems to enact needed changes.

Iterative planning and execution is different. It continuously self-adjusts. This process receives visibility to daily item-level sales to forecast future demand, create inventory plans, and pass the plans to execution. Execution systems receive real-time visibility to supply chain changes and disruptions so immediate adjustments can be made. These execution changes are passed back into the planning process so they can be considered in future planning. The iterative nature of this process allows plans to continuously improve the accuracy of the planning process to narrow the gap between forecast and actual demand.

When using supply chain visibility to inform iterative planning and execution processes, it’s important to separate the relevant, impactful information from red herrings. Otherwise, the data can lead to inappropriate decisions. For example, a spike in demand caused by a promotion is very relevant, while an apparent spike in demand caused by an accident may not be.

Thus, iterative planning and execution processes must be able to filter causal information from the outliers and background noise to provide actionable visibility. Actionable visibility allows iterative planning and execution to react profitably to shifts in demand, new priority orders, customer order changes, supply chain disruptions, and other changing conditions to adjust fulfillment strategies and capabilities, re-plan transportation, or modify DC capacity.

Obviously, an iterative planning and execution process with real-time visibility to supply and demand involves many elements. A command and control process is needed to monitor and direct this action and act as a ”traffic cop” to direct execution across the entire distribution network to profitably fill orders while meeting service commitments. These decisions must be based on time-phased visibility to inventory and allocations at all locations, factoring in labor availability and transportation costs. Command and control should also consider inventory balancing, product lifecycles, and product rotation rules.

Because this iterative process is driven by real-time visibility, profitable promising decisions are also iterative. Visibility to changes initiates a re-promising process so execution will be as profitable as possible given the new conditions. This produces the most efficient and profitable solutions while improving customer service.

Today’s markets are in constant motion. Change is nonstop. No matter how good your planning and how efficient your execution, without visibility into what is happening upstream and downstream, you’re flying blind. With visibility, you can make better decisions that more accurately position inventory to match demand. Attach visibility to iterative planning and execution and the system will be well-positioned to help support optimal decisions on a continual basis to reduce supply chain costs, improve service, and increase profitability.

 

Fabrizio (Fab) Brasca is vice president, solution strategy at JDA Software, a leading global provider of supply chain management, merchandising, and pricing excellence solutions. In this global role, he is responsible for developing strategies across all industry verticals, strengthening executive-level relationships with JDA’s key customers and prospects and advising companies on best practices. Brasca joined JDA as part of the i2 Technologies acquisition in January 2010 after spending more than 10 years at i2 serving in transportation-focused senior management positions. In these roles, he oversaw i2’s global transportation practice including marketing, presales, roadmap development and services functions.  He holds an Honours Bachelor of Mathematics, with a specialization in business and information systems from the University of Waterloo, Waterloo, Ontario.

We have all seen it. We have all heard it. Perhaps many, or most of us, have even participated in the ongoing debate over which is more critical; transportation planning or transportation execution? Some trivialize planning as something generic and focus on the hard realities of execution. Others advocate the basic principle that a better plan leads to improved execution. In typical Canadian fashion, I would argue that the answer is somewhere in the middle.

Where the Money is

The first premise I want to establish is that planning is where the money is. While auditing freight bills more efficiently or having more effective ways to communicate with carriers both absolutely add value, the bulk of the value proposition for any transportation initiative lies in the ability to plan better. Whether through improved consolidation, increased asset utilization or just better carrier and equipment selection; the math clearly establishes the importance of effective planning. And the more sophisticated the planning strategies that can be implemented, the more potential value that can be achieved.

Point and Counter-Point

The counter argument for focusing on effective transportation planning is that the best plan can fall apart when faced with the realities of execution (unavailable capacity, limited dock space, order variability, etc.). The flaw in this contention is that it assumes that effective transportation planning doesn’t consider execution constraints. Unfortunately, this is an issue with many transportation solutions.

The ideal solution will consider active execution-level constraints (dock capacity, throughput, available carrier and fleet capacity, etc.) concurrently during the planning process. While not everything can be anticipated upstream, the more that can be will enable more complex strategies, incremental value, and less user intervention.

Iteration and Postponement

In addition to the need to consider multiple active constraints during the planning process, additional challenges include the degree to which those constraints change during the time lag between the planning and execution processes and the missed opportunities due to a lack of visibility into new orders and order changes. To effectively deal with these challenges, a transportation solution has to move beyond the traditional “point in time” optimization approach, to a more dynamic planning approach in which plans and execution are continuously adjusted as needed based upon new orders, order changes, and dynamic constraints within the network. This, of course, requires the creation of true interoperability between planning and execution.

The benefits of this approach are multifold. First, it reduces the latency between the planning and execution domains which subsequently reduces the variability between the two and creates real value. Second, it creates a notion of resiliency through the ability to sense and respond to inevitable order variability and disruption. Lastly, it provides the opportunity to create consolidation and utilization opportunities that were previously not possible.

Do it Right

In the end, it’s not about planning or execution. In the world of transportation, the two are intertwined. To achieve maximum value, solutions must bridge the gap. They must allow multiple constraints to be considered during the planning process. Planning should be dynamic, rather than static. And planning and execution must interoperate to deal with order and constraint variability over time.

 

As Vice President of Global Logistics at JDA Software, Fabrizio Brasca (@FabBrasca) is responsible for developing transportation and logistics strategies across all industry verticals, strengthening executive-level relationships with JDA’s key customers and prospects, and advising companies on best practices. He holds an Honors Bachelor of Mathematics co-op degree with a specialization in business and information systems from the University of Waterloo, Waterloo, Ontario. The author invites comments or questions from readers. He can be reached via email at fab.brasca@jda.com.

In my last Logistics Viewpoints commentary, I shared with you some of the experiences I acquired over my many years of traveling around the world. The commentary was very well received, so this time around I thought I would do something similar but looking over a span of time instead of distance.

A week or so ago I completed my 19th year at JDA Software. I started as an account manager at a small startup company based in Canada called InterTrans Logistics (ITLS), which was later acquired by i2 Technologies, which was, in turn, acquired by JDA. Today, I am responsible for global strategy for JDA’s transportation practice.

As I reached this milestone, I spent some time thinking about all of the things I have learned along the way, the experiences with customers, and the successes and the evolution of this beloved world of transportation. Clearly, I could easily turn this into a lengthy dissertation, but I’ll just focus on a few key items.

Transportation as a Strategy
The most pleasantly profound evolution I have witnessed is the transformation of the transportation function from a necessity of execution to a strategic enabler. Back in the early to mid-1990s, transportation was a necessity that had to happen, but one whose execution most companies cared very little about. This began to change as organizations realized that there was easy efficiency (re: savings) to be had through automation. As with any trend, however, industry leaders did not stop there. By the year 2000, a fundamental shift had occurred that saw leading organizations look beyond just simple cost reductions to more advanced strategies that created synergies across multi-functional domains, and in the most elite cases, to the point of actually producing revenue.

Part and parcel (transportation pun intended) of this growth was the emergence of transportation practices moving beyond the notion of driving value through a single project toward the development of a medium to long term roadmap. Transportation leaders have essentially adopted a similar approach to software companies in developing a progression of capabilities over time.

There still remains today a wide continuum of adoption but the precedent has clearly been set that advanced strategies and the associated value are achievable with the right level of planning and diligence.

Confidence in the Right Thing
Driving industry change through innovation can be challenging, particularly when you are on the forefront of that change. It takes a certain level of fortitude to stick to a vision in the face of detractors and it takes courage for early adopters to see past the status quo. To illustrate this, I take you back to the mid-1990s. At that time, we were promoting a message highlighting the advantage of leveraging assets to build continuous moves. As I presented to a prospective customer, let’s use a retailer as an example, I would suggest that there might be an opportunity to take an asset dropping goods off at a store and route it to do a local vendor pick-up before returning to its origin distribution center. During that period, the suggestion was considered heresy or witchcraft and was often met with skepticism, or worse.

Today, this is a widely accepted strategy and considered logical even if not everyone does it. It took, however, determination and confidence to know that this was the right approach and to work past the decriers and the cynics.

More than Software
I always find myself with an odd sense, since I work for a software company, when I suggest that to achieve real, sustainable value with your transportation practice, it has to be about more than software. Software is an enabling piece and most certainly a very important one, but without a commitment to process and an investment and empowerment of people, any potential value that can be gained will fall short and certainly not be sustainable.

For example, at one retailer, they invested in staff to engage in ongoing modeling of their network in order to create solution and strategy acceptance, keep ahead of industry trends, and to adapt to changes in their network.

As a second example, I spent considerable time working with a larger consumer goods company that looked to drive transportation value across their global network. In this circumstance, while the solution clearly needed to be robust and flexible, more time was spent establishing the notion of a global template and educating regional owners. Additionally, in some cases, organizational change was required in order to create the synergies and the focus that would drive value over the long term.

Driving Forward
It has been a great journey with lots of success and growth but it is certainly not over. There is more to do, more to learn and a lot more to change. I sometimes hear transportation described as a mature solution domain and I suppose that is true in some regard but maybe that is a matter of perspective. From my view, I see a lot more that can be done, new domains to be crossed, silos to be collapsed and greater challenges to conquer.

As Vice President of Global Logistics at JDA Software, Fabrizio Brasca (@FabBrasca) is responsible for developing innovative transportation and logistics strategies across all industry verticals, strengthening executive-level relationships with JDA’s key customers and prospects, and advising companies on best practices to become more profitable. He holds an Honours Bachelor of Mathematics co-op degree with a specialization in business and information systems from the University of Waterloo, Waterloo, Ontario.

Categories : Guest Commentary, Transportation
Comments (1)

I am fortunate. The supporting facts behind this blanket statement are gleefully numerous, but for the purposes of a blog focused on transportation and logistics, I am going to whittle it down to the cumulative opportunities I have had to fly, quite literally, around the world and see a multitude of logistics challenges and best practices. From Greenville, South Carolina to Guangzhou, China, I have witnessed incredible challenges as well as quite clever innovations. As an aside, I call out the latter on purpose as I have seen a considerable number of our newer and more sophisticated capabilities being driven by requirements outside of North America.

This tremendous set of experiences has served me well as I have observed a growing number of organizations working to expand their horizons and drive the success of their transportation solution deployments beyond the confines of their initial implementations to the far reaches of the global economy. A large part of what I am tasked to speak about are the differences that I have seen, the key challenges, solution approaches and a ranking of priorities. Clearly, this would be a lot to cover in a short blog, so let’s start by covering a few key observations that I have accumulated.

Spoiled by Space
North America is a large place (respectively, Canada and the United States of America are the second and fourth largest countries, by area, in the world) and as such is generally free from the limitations of physical geography. Massively-sized facilities are a norm rather than an exception. Consequently, while the issues of dock capacity and scheduling are becoming hotter topics, their criticality here pales in comparison to areas such as Europe and parts of Latin America where space is constrained and hence the management of throughput is more critical.

Economies of Density
Justifying a transportation solution deployment in North America is not particularly hard. I can make a similar statement about other geographic centers such as Western Europe, Brazil and even India. The commonality across these regions is their economic density. The justification becomes more challenging in smaller or less dense geographies such as Thailand or Laos. I specifically use economic density over other metrics such as economic development because there are examples like Australia where despite being an established, economically developed country, its ratio of population to area causes it to often become a less ideal target for driving transportation value. It is interesting to note that while my home nation of Canada has similar density characteristics to Australia (i.e. big geography, smaller population) it has the advantage of being conjoined to the United States.

It’s About Consolidation, Right?
The primary value driver of any transportation business case is the efficiency gained through advanced consolidation and routing strategies. I take smaller consignments of pallets and cartons that might have previously travelled independently, and group them together into larger assets maximizing overall capacity usage. There is a fundamental premise that is a key underpinning to this strategy, that we in North America take for granted, which is we generally know what those larger assets look like and how many we have. Outside of North America, this is a flawed premise. On a trip to China a few years ago I learned that in a nation where there are millions of carriers and the assignment of freight is often managed through groups of brokers, the knowledge of what asset you are going to get and when is not so readily available.

Distance and Time
In addition to space, two other areas where we are particularly spoiled in North America are infrastructure and data. A robust infrastructure enables an environment where we can assume that air is faster than truck, truck is faster than rail and that there is an abundance of geo-centric data sources to model distance and transit times accurately and efficiently. These two items cannot be assumed elsewhere. An immature infrastructure can lead to a re-ordering of modal efficiency, reliability and predictability, and the unavailability of accurate distance and postal data can lead to significant challenges in trying to model a network in any practical and useful way.

Value Available
Do not be daunted. There is significant value to be attained by expanding your transportation capabilities internationally, but like anything else, you need to be cognizant of the challenges that await and not fall into the ever-so-common trap of assuming the principles are basically the same everywhere. Forearmed is forewarned as the saying goes; the trick is in figuring out the how, but let’s save that for the next installment.

As Vice President of Global Logistics at JDA Software, Fabrizio Brasca (@FabBrasca) is responsible for developing innovative transportation and logistics strategies across all industry verticals, strengthening executive-level relationships with JDA’s key customers and prospects, and advising companies on best practices to become more profitable. He holds an Honours Bachelor of Mathematics co-op degree with a specialization in business and information systems from the University of Waterloo, Waterloo, Ontario.

Categories : Guest Commentary, Transportation
Comments (1)