What Does “1+1=3” Really Mean with Supply Chain Technology?

Stepping Out of Paradigms Dictated by Technological Limitations of the Past

Chris_Jones-executive-headshot-photography-0008One of the biggest opportunities to dramatically improve supply chain performance occurs when traditional supply chain functions are decomposed and reinvented as integrated business processes. Few supply chain practitioners would dispute that notion. However, when it comes to their technology strategy, too many practitioners fall back into deploying the TMS, WMS, Route Planning, Mobile and other technological silos developed in the 1990s that don’t ultimately support their vision. The challenge facing supply chain practitioners who want to achieve breakthrough performance improvement is to understand the value and difference of “1+1=3” integrated supply chain technology.

Getting to “1+1=3” is not as simple as one supply chain application being good at passing data to another one. Instead, we are talking about how the business process would be fundamentally different or have completely new capabilities if the technology silos didn’t exist and multiple functions had been designed together in the first place. Part of the problem supply chain practitioners face is stepping out of the business process paradigms that have been dictated by technological limitations of the past. Applications on the same technology stack do not necessarily address the issue. Sometimes it takes new technologies or disruptive business practices to cause us to rethink what we have done in the past.

A good example of “1+1=3” technology is what is happening to routing and mobile solutions because of same day delivery requirements by retailers. To offer same-day delivery cost effectively, retailers must be able to make delivery window promises in real-time to customers based upon fleets that are in motion. The traditional route planning paradigm of taking orders, batch planning them and sending the results to a mobile solution for daily route execution doesn’t work for same-day delivery appointment promising and execution. Instead, the appointment promising must use the dispatch schedule that is currently being executed and contains real-time vehicle location updates from the GPS-enabled mobile applications being used by drivers. Equally, the integrated driver mobile application has to be able to accept new orders dynamically and potentially guide pickups and deliveries from multiple stores or depots to keep the delivery truck in constant motion and fully utilized.

A similar point for “1+1=3” technology can be made for the evolution of fleet and for-hire transportation management as companies look more holistically at optimizing their transportation P&L and capabilities. The traditional approach has been for the TMS to make the transportation mode selection decision based upon a static set of assumptions and then in “open loop” fashion, pass that answer off to a route planning system, assuming that the work will get done there. But what happens when the distribution strategy is to maximize fleet utilization and then look to commercial carriers for overflow work or orders that do not make economic or customer service sense for the fleet to execute? These situations require “closed loop” interaction between the TMS and route planning functions and the ability of either function to be the master decision maker. There are even more complex scenarios where companies looking at backhaul and transportation revenue optimization that considers not only the fleet, but commercial carriers too where the whole planning process needs to be solved collectively and dynamically.

For me, supply chain management remains an exciting vocation because new processes are constantly being created which redefine a company or even a market performance. In most cases, this transformative performance improvement is enabled by technologies that support the new business paradigms and not through legacy technology based upon the functional silos that have artificially been created by legacy supply chain technology constraints. Supply chain practitioners looking to achieve industry leading performance should challenge themselves and their vendors to think “1+1=3” for their business processes and the technologies they need to support them.

What other “1+1=3” examples or opportunities have you seen in your business or in the market at large? Your comments are welcomed!

 

As Executive Vice President, Marketing and Services, Chris Jones is primarily responsible for Descartes marketing activities and implementation of Descartes’ solutions. Chris has over 30 years of experience in the supply chain market, including the last 10 years as a part of the Descartes leadership team. Prior to Descartes, he has held a variety of senior management positions in other organizations including: Senior Vice President at The Aberdeen Group’s Value Chain Research division, Executive Vice President of Marketing and Corporate Development for SynQuest and Vice President and Research Director for Enterprise Resource Planning Solutions at The Gartner Group and Associate Director Operations & Technology for Kraft Foods.

 

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