Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

HighJump is Rebranding as Körber Supply Chain

Logistics Software Vendors | By •

Today is day two of the HighJump Elevate user conference. Except it is no longer HighJump Elevate. Rather it is now Körber Elevate. This is due to yesterday’s official launch of the new corporate branding. Chad Collins, the CEO of HighJump, formally announced the transition of HighJump to Körber Supply Chain, and further stated that all of the twelve Körber Supply Chain companies will transfer to the Körber brand by this summer. Contextually, Körber Supply Chain Software is a business unit within Körber Supply Chain, which is itself one of five business areas of the Körber Group. Management believes that the one company Körber brand best represents the global, comprehensive capabilities of the organization as a whole.

The Supply Chain of the Future

Sean Elliott, the company’s CTO, took a step back to Elevate 2018 when they launched a vision of the supply chain of the future based on two fundamental principles – the increasingly strategic role of supply chain within business, and the realization that supply chain must be nimble to be a strategic contributor to business. And being nimble is essential to adaptability. Sean built out that vision further with four fundamental tenets of the supply chain of the future – Adaptability, Insight, Efficiency, and Connectivity. And I believe these tenets provide a valuable framework for evaluating the key attributes of a best in class supply chain. With this vision in mind, Sean stated that companies are focused on their present needs and looking to determine what technology they can implement to help their workers perform on the job or help management reimagine processes that are critical to their business. In essence, technology that will move operations toward autonomy while providing an immediate tangible return on investment. And Körber’s burgeoning robotics business is one way it is turning this vision into action.

Warehouse Robotics is Center Stage

In September, Körber acquired Australia-based Cohesio Group. Among other projects, Cohesio Group has seven Geek+ robotics implementations under its belt, including an apparel facility with over 200 bots. In  January, Körber announced its strategic partnership with Locus Robotics. Verst Logistics was noted as a flagship customer of the Körber and Locus partnership. And Fetch Robotics was announced at Elevate as a new strategic partner of Körber. These announcements were followed by the panel discussion on the rise of warehouse robotics, featuring Melonee Wise, the CEO of Fetch Robotics, Leif Jentoff, the Co-Founder of RightHand Robotics, Karen Leavitt, CMO of Locus Robotics, and John Santagate and Nishan Wijemanne of Körber.

Melonee Wise explained how the general availability of open source software around 2015 jump started the autonomous mobile robotics (AMR) market. At that time, a number of robotics companies burst on the scene. Karen Leavitt added that the price and capabilities of the technology have improved to the point where the business case can be demonstrated and proven for the appropriate uses. Leif Jentoff agreed that the ROI is there, particularly when the scale is appropriate. He further noted that the value is not only in the volumes but also in the predictability and reliability that robotics can bring to a warehouse operation. Melonee also stated that there is a need for a platform for the management of these devices. Proper platforms will help with maintenance and the ability to maintain and continue to deliver ROI on the robotics investments. Finally, Melonee commented on the value of the data provided by robotics. She made the analogy of a robot as one big DVR, providing information on movements, near misses, and other data that can deliver value at the process engineer level of the operation – providing insights for warehouse business process improvements.

Final Word

Six years ago I was introduced to the Körber brand from the company’s acquisition of Inconso. When Körber acquired HighJump I took notice. From there I learned about Aberle, Consoveyo and other warehouse automation companies within the Group’s portfolio. Today I expect to hear more and more about Körber within the context of warehouse management, warehouse automation, and robotics. Körber has certainly burst upon the scene as a global warehouse technology provider.

 

Examining the HighJump Software Acquisition

Mergers-Acquistions | By •

The Acquisition In-Brief

Last week Körber AG announced that it had acquired HighJump. I first became aware of Körber in 2014 when the German holding company acquired Inconso, a German supply chain Highjumpsoftware provider. At that time, Inconso was a complementary addition to Körber’s other Intralogistics businesses, but was distinct in its focus on commercial software. Shortly thereafter, Körber expanded its software portfolio with the DMLogic acquisition. Now with the HighJump acquisition, Körber has greatly expanded the software segment of its Logistics Systems business. Körber AG is owned by the Körber Foundation, and as such, is not subject to the rigid investment time horizons often imposed by private equity firms. This provides additional latitude for post-merger integrations, strategy development, and product development roadmaps. In my opinion, the acquisition provides numerous growth opportunities, or potential “synergies” to the company. However, as with any acquisition, proper execution is essential to realizing these synergies.

Körber Logistics Systems

Körber’s Logistics Systems business includes two European-based warehouse automation systems integrators, a palletizing provider, a depalletizing solution provider, and the software businesses Aberle Software, DM Logic, Inconso, and HighJump. As I noted in previous LV posts, warehouse automation and warehouse software companies are being acquired due to the high growth rate of the warehousing technology space that is itself being propelled by the e-commerce boom. Körber is likely focusing on warehousing technology due in large part to this secular growth it is experiencing. Operationally, Körber tends to allow its portfolio companies to function as independent entities, but provides opportunity for cross-pollination in areas such as strategy and research and development. However, the software companies within Körber Logistics are expected to become more closely integrated. In particular, the businesses of HighJump and Inconso is where I see the greatest opportunity for growth synergies.

Strategic Fit

There are multiple ways in which the HighJump acquisition creates growth opportunities for Körber. Geographically, the companies are an ideal match with little overlap. Inconso is a well-established WMS and WCS provider to companies in Germany and other countries in Western Europe, but has limited presence in the North America market which is growing more quickly than Europe. At the same time, HighJump is well-established in North America but has limited presence in Europe. The combination of HighJump and Inconso also allows the combined entity to meet the needs of a wide range of warehouse complexity and throughput requirements. Western European warehouses are among the most heavily automated in the world and Inconso meets the needs of these operations with its integrated WMS/WCS solution set. These warehouses are often large facilities with high throughput and large capital investments. HighJump typically sells its Warehouse Advantage solution to companies that are running moderately complex manual or partially automated warehouses. These facilities have lower throughput than the large automated warehouses Inconso often supports.  In addition, HighJump offers a WMS product for small to medium sized businesses and another designed for the needs of 3PLs. Furthermore, HighJump and Inconso offer additional complementary applications including TMS, labor management, yard management, and planning solutions that together can strengthen the company’s position in large platform deals.

Other Logistics Systems Businesses

Allowing the software businesses to operate autonomously ensures that the software companies will remain focused on their current customers and product development strategy. But it could also hinder potential synergies. There is a history of WMS software failing to flourish when combined with warehouse automation businesses. But more recently the trend appears to be reversing, as warehouse automation providers have seen their warehouse automation and mechatronics offering become commoditized while differentiation is increasingly being defined by the intelligence of the overarching software systems, including WCS, WMS, and facility-wide analytics. Körber has an opportunity to create a highly competitive global intralogistics offering if it can harness and integrate the individual strengths of its Logistics Systems businesses.

 

Guest Commentary: A New Best Friend for Santa’s Elves: How a WMS Drives Efficiency in Omni-Channel Retail

Guest Commentary | By •

This time of year, many children have high expectations for what they hope will be delivered for the holidays. For those of us adults who are buying for them or anyone, our expectations aren’t any lower: We want the ability to purchase however and wherever we want, and receive it as fast as possible in the most convenient location.

For retailers that don’t have an army of elves to cater to the needs of each customer, the right supply chain management technology can efficiently and quickly manage the fulfillment of orders online, in-store, and deliver the goods to the consumer in multiple ways. Some companies are already pushing the envelope in delivery strategies: Wal-Mart offers in-store pick-up for orders placed online, and Sears and K-Mart will bring the online purchases out to a customer’s car in some locations.

A warehouse management system (WMS) can be the central tool for many omni-channel retail efforts. It bridges the online and in-store consumer experience to optimize the shopper’s time and serves as the primary integration point between the online and in-store activities, as well as between the retail store and warehouse environment.

Here’s how it works:

In-store employees are directed to pick items at a specific time to ensure they are ready for the customer, but minimize disruption for shoppers in the building. Once the items are selected, the cart is packaged and ready for pick-up when the customer arrives. The nature of a WMS allows for any item in the store to be ordered, picked and delivered this way – avoiding the trade-off of consumer choice for convenience. The WMS can also be triggered to provide product photos to optimize order picking, manage the receive, shelf fill and refill operations, and integrate with existing systems such as online shopping, point-of-sale, store planograms and distributed order management systems that manage and direct omni-channel orders.

Turning a retail team into a personal shopping team of sorts doesn’t mean a retailer has to sacrifice margin or the value of getting a consumer into their store. Accurate and timely fulfillment by the WMS minimizes labor cost and keeps profits on track. If your WMS is adaptable and configurable, it can continue to support your dedicated fulfillment center in the event that your online business outgrows in-store fulfillment.

Consumer demands are changing and the expectation of being able to buy, fulfill and return anywhere means that retailers are getting creative and increasingly proactive in their logistics strategies. For those omni-channel retailers with an adaptable warehouse management system, the integration of in-store activities with varying order sources can drive efficiencies that will not only make their holidays brighter, but fulfill the high expectations of both the gift buyer and receiver.

Gary Nemmers is the senior vice president and general manager, supply chain execution group, at HighJump Software. He is responsible for all operations pertaining to the supply chain solutions group, including strategy, general management, sales, professional services and marketing. His role encompasses growing and servicing the supply chain management offering through direct and indirect channels worldwide.

This Week in Logistics News (November 18-22, 2013)

Logistics Service Providers | By •

Yesterday morning, I stood at my kitchen window and watched leaves fall from the trees. They floated down, one after another, to the dead grass below, where other leaves had fallen, yesterday and the day before. What made them drop today? I looked for patterns in their flight, but saw none. Each leaf acted alone, unaware of time and place, like me in the quiet house, watching leaves fall from the trees.

In this week’s news…

In 3PL news, XPO Logistics announced that it has acquired Optima Service Solutions, LLC, “a leading non-asset provider of last-mile logistics services for major retailers and manufacturers in the United States” for $26.6 million. This follows the company’s acquisition of 3PD this past July, another provider of heavy goods, last-mile logistics in North America. Here’s an excerpt of what Bradley Jacobs, chairman and CEO of XPO Logistics, said about the Optima acquisition:

It enhances our ability to provide a seamless in-home delivery experience for end customers, particularly with large appliances and electronics. In addition, Optima benefits from the same powerful tailwind as 3PD: the growing inclination of retailers and manufacturers to outsource the last-mile logistics of heavy goods [emphasis mine]. We plan to leverage these synergies, and integrate Optima’s proprietary software with our last-mile technology.

Last-mile logistics is not new, but it’s certainly a segment of the logistics market that is gaining a lot of attention from 3PLs and technology vendors alike. To paraphrase Jacobs, 3PLs and technology vendors are busy setting their sails to capture this strong tailwind.

The wind is also blowing strong in the direction of global expansion. This week, for example, C.H. Robinson announced that it has opened a new office in Basel, Switzerland. Over the past 20 years, the company has built a network of 52 offices with over 1,000 employees throughout Europe.

And HighJump Software announced a new partner in the Middle East, Dubai-based Norq Solutions that provides mobility solutions for warehouse management, field service, retail, and other industries. The company will offer the HighJump® Supply Chain Advantage suite to customers in the region. According to the press release, “HighJump Software currently has 17 international partners on six continents to support its double-digit growth in markets outside of the United States.”

On the technology front, TomTom Business Solutions launched “new road toll reporting functionality for its fleet management platform, providing transport companies with greater cost transparency for all European routes.” Here are some details from the press release:

WEBFLEET truck toll reporting provides a real-time breakdown of the toll costs incurred for each trip, allowing transport companies to better manage expenses and provide customers with transparent invoices.

 

The functionality accounts for all applicable national tolls in France, Germany, Austria and Slovakia. It will also cover the proposed French Ecotaxe, reporting on the CO2 emissions for each trip and estimating the total costs.

In other transportation-related news, UPS announced that UPS Ground, Air and International, and Air Freight rates within and between the U.S., Canada, and Puerto Rico will increase an average net of 4.9 percent. And Cass Information Systems reported that its Cass Truckload Linehaul Index set a new all-time high, “with truckload linehaul rates registering 0.9% higher than in October of last year and 0.7% higher than in September.” The press release goes on to say that “supply and demand in the truckload marketplace remain relatively balanced for now. Capacity continues to shrink slowly, while truck tonnage has been increasing.”

By now, most companies should have their transportation budgets in place for 2014. So, is your transportation budget increasing or decreasing in 2014, and by how much? Take my 5-second QuickPoll and see what others are saying.

Finally, labor tensions continue to simmer at the West Coast ports. This past Monday, “truck drivers from three companies at the Port of Los Angeles and Long Beach began a 36-hour strike…and Port of Oakland truckers have threatened to walk out next week,” according to an article in Cargo Business News. These are just some passing showers; the real storm will come in June 2014, when the current agreement between ILWU workers and the ports expire. I suggest you start planning now, if you haven’t already, for possible disruptions this coming summer.

Have a happy weekend!

Song of the Week: “Let Her Go” by Passenger

Note: C.H. Robinson and HighJump Software are Logistics Viewpoints sponsors.

This Week in Logistics News (October 14-18, 2013)

Replenishment | By •

Several years ago, I interviewed CIOs and IT executives from leading third party logistics (3PL) companies, and one of the most interesting findings was that their teams spent a majority of their time fixing and cleansing data. I’m sure if I conducted those interviews again today, the story would still be the same. Therefore, I wasn’t surprised by an article in today’s Wall Street Journal about how faulty data is hindering the HealthCare.gov rollout. Here’s a quote from the article:

“There are some missing data elements that are requiring a lot of research on our part,” said Allan Einboden, [Scott & White Health Plan’s] chief executive. “If we’d received 5,000 [applications] and they all had to be worked, that’s a lot of extra administrative costs,” said Mr. Einboden, who said he expects the problems to be fixed.

Sounds like a typical day in supply chain and logistics to me.

In other news…

The spotlight is starting to shine on home delivery, as retailers and others look for ways to execute on their omni-channel fulfillment and same-day delivery strategies. This week, Descartes Systems Group announced the launch of its updated home delivery solution, which includes Descartes Reservations™ for delivery appointment scheduling; Descartes Route Planner™ for route optimization, dispatch and tracking; Descartes Mobile™ for wireless communications and mobile applications; and Descartes Notifications™ for automated call-outs. According to the press release:

Descartes Route Planner is unique in that it supports same- and next-day delivery, tight delivery time windows and “white glove” services planning for consumers, while offering retailers “profitable choice” home delivery options. “Profitable choice” allows retailers to increase their revenue through premium delivery windows and value-added services, while reducing costs by offering delivery options that reduce delivery route mileage. The solution includes real-time delivery appointment scheduling, route optimization and execution, mobile applications and notification services, and is available in cloud-based or on-premise configurations.

The press release mentions Restoration Hardware as a customer. Another customer is John Lewis Partnership, which is featured in a case study video. The main challenge with home delivery is doing it profitably (see Webvan), while providing customers with delivery options at the point of sale that are reasonable and reliable — unlike the option I was given recently by a delivery company: “We’ll be there on Tuesday between 8:00 am and 5:00 pm,” and when I asked if the driver could call me on Tuesday when he had a better sense of when he would arrive, the answer was no. What are the odds I’ll use them again?

Years from now, when we look back at 2013, we might say this was the year where logistics truly became a strategic weapon for companies. Earlier this week, for example, I commented on the partnership between Amazon and P&G, where Amazon has set up operations inside P&G warehouses to fulfill online orders. And Steve Banker commented on Amazon and Walmart from an omni-channel fulfillment perspective. Also this week, The Detroit News and others reported that “Wal-Mart Stores plans to open more small stores as it links them to its supercenters, which will serve as mini-warehouses for their smaller cousins [emphasis mine].”

Simply put, retailers and others are taking a fresh look at their supply chain networks (and those of their partners) to better balance inventory and transportation costs with service levels that are becoming more stringent. As a result, the answers to “What is a warehouse?” and “What is a transportation provider?” are changing — and if you’re not asking those questions, you’ll likely get left behind.

As the holiday season heats up, some interesting findings related to free shipping and mobile commerce from Shop.org’s eHoliday survey conducted by Prosper Insights & Analytics. Here are some excerpts from the press release:

16.3 percent of retailers will offer their first holiday free shipping offer by the week of October 28; more than one-third (34.9%) say they already offer year-round free shipping, compared to 23.1 percent last year.

 

Knowing that consumers increasingly use their smartphones and tablets to research and purchase products, retailers have prepared accordingly. More than half (57.4%) have invested in optimizing their mobile websites, nearly four in 10 (38.3%) have invested heavily in the smartphone user experience, and one-quarter (25.5%) say they invested in mobile commerce apps for smartphones.

It’s no secret that many of our roads and bridges are in disrepair, but what impact is that having on your transportation budget? An article in the Wall Street Journal this week provides some insight:

Trucks ship the bulk of the country’s goods. But trucking companies and their customers complain those shipments are being rerouted—sometimes by hundreds of miles—or traveling at lower speeds over deteriorating or traffic-clogged highways. That causes higher costs for fuel, maintenance and other expenses, including drivers.

 

Donald Maier, senior vice president of global operations for Lancaster, Pa.-based Armstrong World Industries, which makes floor and ceiling tiles… said fully loaded truck trailers traveling to or from its Marietta, Pa., ceiling tile plant will have to use a 25-mile detour, mostly to avoid a two-lane state highway bridge over a tributary of the Susquehanna River that will no longer be rated to accommodate fully loaded heavy-duty trucks. Armstrong projects the additional miles will add about $200,000 to $300,000 a year to the Marietta plant’s transportation costs [emphasis mine].

And these costs will ultimately trickle down to you and me — on top of the increased maintenance and repair costs we’re incurring on our own cars.

Finally, if you’re attending the CSCMP Annual Global Conference in Denver next week, please stop by the sessions I am participating in and say hello. It should be a great week of learning and networking.

Have a happy weekend!

Song of the Week: “If I Can Dream” by Elvis

Note: Descartes and HighJump Software are Logistics Viewpoints sponsors.

This Week in Logistics News (October 7-11, 2013)

This Week in News | By •

There’s lots going on today, so let’s go straight to the news.

The Bureau of Transportation Statistics’ (BTS) Freight Transportation Services Index (TSI) reached its second highest level in history in August, rising 0.4 percent in August from July, and increasing 3.4 percent from August 2012. Here’s some analysis from the press release:

The Freight TSI has increased in eight out of the last 10 months, growing from 108.4 to 114.8, an increase of 5.9 percent since October 2012. Most of the increase was in trucking and rail intermodal.

The 10-month growth is consistent with steady growth in Gross Domestic Product, industrial production and employment over the same time period. The growth in the economy has come particularly from housing, autos and energy, sectors that generate relatively large amounts of freight tonnage.

Meanwhile, the annualized turnover rate at large truckload fleets rose two percentage points to 99 percent in the second quarter of 2013, according to the latest edition of American Trucking Associations’ Trucking Activity Report. “Continued high turnover shows that the market for qualified, experienced drivers remains extremely tight,” ATA Chief Economist Bob Costello said. “The continued improvement in the freight economy, coupled with regulatory challenges from the changing hours-of-service rule and CSA will only serve to put a further squeeze on the market for drivers.”

A few months ago, I said that the real test regarding the impact of HOS and CSA will come in the fourth quarter. Here we are. The early signs are a bit concerning, but let’s look back in January and see how we did.

The U.S. government shutdown is having an impact on global trade. Although Customs is mostly staffed during the shutdown, many other agencies involved in global trade have reduced staffs and closed websites. Here are some excerpts from a Wall Street Journal article published this week:

More than 40 government agencies, including the EPA, the Department of Agriculture and the Department of Commerce, are involved in trade shipments, said [Marianne Rowden, president of the American Association of Exporters and Importers]. Fourteen agencies have “release and hold” authority that trumps clearance from U.S. Customs and Border Patrol, she said.

Last Thursday, a website run by a Commerce Department bureau suddenly shut down…The Bureau of Industry and Security site is used by sellers of high-tech goods that are subject to export controls, particularly those with encryption capabilities that could interfere with the government’s intelligence-gathering. Licenses often are required to export equipment used to make semiconductors, particularly advanced chips that can have military applications.

On the technology front, SAP announced the SAP® Customer Activity Repository application, “a new retail data repository powered by the SAP HANA® platform…intended to support retailers in becoming more customer-centric by bringing together customer, sales and inventory information from siloed applications.” Here are some additional details from the press release:

SAP Customer Activity Repository aims to empower retailers with consumer insights by consolidating customer interactions from stores, online and mobile channels with insight from social media feedback such as Twitter or Facebook posts [emphasis mine]. The information shall act as the basis for a “single source of truth” to help retailers optimize branding, marketing, promotions, pricing, merchandising, inventory management processes and more.

General availability of SAP Customer Activity Repository is planned for the first quarter of 2014.

There’s been a lot of buzz and hype lately about performing sentiment analysis on social media posts and integrating the output with enterprise data to get a more complete and real-time pulse on demand. I’m glad to see that SAP plans to leverage insight from social media posts in its application, but how well and valuable this information turns out to be in practice remains to be seen.

In other technology news, HighJump Software announced that its TrueCommerce EDI Solutions Group has partnered with AdvancePro Technologies (APT), a provider of inventory management software, which will “enable AdvancePro customers to process EDI purchase orders like any other orders, without the need to manually manage or rekey EDI documents. Even invoices and Advance Ship Notices (ASNs) can be exported from AdvancePro and sent to trading partners using TrueCommerce EDI.”

Connectivity — it isn’t sexy, but it’s vital to executing supply chain processes.

Natural gas is having a growing impact on logistics and supply chain management, which is why it’s one of the “mega trends” we will discuss at the CSCMP Annual Global Conference later this month. The news from UPS this week is yet another example. The company announced that it plans to invest about $50 million to build an additional nine liquefied natural gas (LNG) fueling stations, bringing the total number of stations to 13. According to the press release, “The enhanced LNG fueling infrastructure will support the operation of approximately 1,000 UPS LNG tractors that will displace more than 24 million gallons of diesel fuel annually.”

And finally, retailers in the UK are also viewing same-day delivery as a competitive differentiator. AO.com, which sells kitchen appliances, is now offering same-day delivery of refrigerators and cookers (customers are charged a £29.99 fee). Here’s an excerpt from the Financial Times article:

John Roberts, the chief executive and founder of [AO.com], said: “Research was coming back from customers saying they wanted same day service.”

The change was not simple. AO.com had to rejig its delivery infrastructure across the UK, but Mr Roberts is confident that the move would drive sales volume [emphasis mine]. “The customer can order in the morning and not have to take any time off work. The not having to take time off work is a good offset for £30.”

Mr. Roberts has a good reason to be confident. As Steve Banker wrote about earlier this year, “Amazon found that merely displaying an icon touting same-day availability increased conversions by 20 to 25 percent! Interestingly, of those Amazon shoppers who saw the icon and then made a purchase, most of them ended up not using same-day delivery, opting instead for next-day delivery.” In case you’re wondering, AO.com also offers next-day delivery for a lower fee of £9.99.

And with that, have a happy weekend!

Song of the Week: “Paddling Out” by Miike Snow (“There’s someone here who laughs too hard at everything”).

Note: HighJump Software is a Logistics Viewpoints sponsor.
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