Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

This Week in Logistics News (June 17-21, 2013)

EU | By •

Summer is finally here, so let’s go right to the news…and then maybe the pool.

Europe is on the brain for both C.H. Robinson and MercuryGate, with the two companies announcing this week that they’re expanding their presence in the region. C.H. Robinson Europe is opening a new office in Istanbul, Turkey. According to the press release, “Demand for logistics services in the region is rapidly increasing and with over 40 universities in the area, presents access to a large and talented workforce. The Istanbul office will primarily offer international road freight services including both full and less-than-truckload transportation modes.”

Meanwhile, MercuryGate has partnered with e4Data Systems to establish MercuryGate EMEA, which will be based near Liverpool, UK, with representation in Ireland. Here’s an excerpt from the press release:

MercuryGate EMEA will focus on developing new business opportunity for the MercuryGate transportation products in this rapidly growing market…Each day, over 125,000 users, from over 50 countries in 15 different languages log into the MercuryGate TMS to manage their international transportation. MercuryGate EMEA offers new prospects regional access to MercuryGate sales and delivery resources.

But wait, I thought most of Europe was still in a recession, with record unemployment? Well, not all of Europe is created equal, with some countries doing much better economically than others. Also, and somewhat paradoxically, demand for transportation solutions often increases in tough economic times as companies look for ways to reduce costs. Transportation is a natural target because, despite its strategic value, most C-level executives still view it as a “cost center” and a “low hanging fruit” opportunity to add significant money to the bottom line.

In other technology news, JDA Software announced the release of its integrated product roadmap following the merger with RedPrairie. Here are some details from the press release:

The six critical solution areas that make up the product roadmap are based on JDA customers’ greatest challenges and where the company can offer the most value. These areas are retail planning, retail execution, commerce, warehouse, transportation and manufacturing/distribution.

 

One of the most significant milestones outlined in the product roadmap is the Q1 2014 delivery of the company’s first fully integrated planning and execution offering, combining JDA’s supply chain planning (SCP) solutions and transportation management system (TMS) with RedPrairie’s warehouse management system (WMS).

For as long as I’ve been in the market, vendors have been promising a fully integrated TMS-WMS solution, but the promise has always fallen short of expectations. The reality is that relatively few companies integrate these solutions in the way analysts like to envision because they still manage transportation and distribution as separate operations, with transportation often dictating what happens at the distribution center. The fact that JDA is prioritizing its TMS over RedPrairie’s in the product roadmap implies that the benefits of its TMS (more functionality, larger customer base) outweighed the benefits of RedPrairie’s existing TMS-WMS integration.

Oracle reported disappointing financial results for the second quarter in a row, with total revenues of $10.9 billion in Q4 FY 2013, unchanged from the previous year. New software licenses and cloud software subscriptions revenues were up 1 percent to $4.0 billion in the quarter. Oracle blamed the weaker-than-expected results on disappointing sales in Asia and Latin America. In contrast, Infor announced this week that it expects its fiscal 2013 Q4 software license fees and subscription revenues to grow about 9 percent at actual currency rates compared to its fiscal 2012 Q4, driven primarily via organic growth and product investment.

While I believe the market shift toward cloud and software-as-a-service solutions is putting competitive and pricing pressure on traditional software vendors, not all vendors are being impacted the same. Ultimately, success in the software industry comes down to having the right strategy, business model, and products for the times, and having the right people to execute it.

In a posting last month, I wondered if we had reached the tipping point for natural gas long-haul trucks. My conclusion was that we hadn’t reached the tipping point yet, but that we’re getting closer every day — as long as the price difference between natural gas and diesel stays large enough to cover the higher price for LNG-powered trucks and other ancillary costs. As reported in the Wall Street Journal this week, the International Energy Agency (IEA) is also bullish on the use of natural gas in transportation sector. Here is an excerpt from the article:

In its five-year gas outlook, the [IEA] said it expects natural gas use in road and maritime transportation to rise to 98 billion cubic meters by 2018, covering around 10% of incremental energy needs in the transport sector. According to the IEA, this shift will do more to reduce the medium-term growth in oil demand than both biofuels and electric cars combined.

 

“Gas is already a major fuel in power generation, but the next five years will also see it emerging as a significant transportation fuel, driven by abundant supplies as well as concerns about oil dependency and air pollution,” said Maria van der Hoeven, the IEA’s executive director.

 

Several hurdles still exist that could stymie the development of natural gas as a transport fuel, not least the need to develop infrastructure like fuelling stations, the IEA said. But in several countries, notably the U.S. and China, activity is already underway to develop the sector.

Finally, the Wall Street Journal also published an article this week discussing how Walmart plans to compete with Amazon on the e-commerce front, particularly on how it fulfills online orders. According to the article, “Wal-Mart is creating a vast new logistics system that includes building new warehouses for Web orders, but also uses workers in stores to pack and mail items to customers, because Wal-Mart has determined it is faster and cheaper to send some shipments from its more than 4,000 U.S. stores.” The article goes on to say that Walmart “is vowing to solve its online problem with a distribution network that shares inventory information between 4,000 stores and 158 warehouses and immediately sizes up the most efficient way to deliver a television or T-shirt to a customer nearby [emphasis mine].”

As we’ve highlighted before, other retailers like Macy’s are also starting to use their stores as fulfillment centers, and this is a big reason why supply chain and logistics software vendors are so enamored with omni-channel fulfillment these days.

Have a happy weekend!

Song of the Week: “Sea of Love” by The National (I can’t stop singing this song, or watching the video).

Note: C.H. Robinson, JDA Software, and MercuryGate are  Logistics Viewpoints sponsors.

This Week in Logistics News (December 31, 2012 – January 4, 2013)

Logistics Outsourcing | By •

Happy New Year! I hope everyone had a fun and relaxing vacation. Now it’s back to the grind — and fun. There was very little news this week, but here’s what caught my attention:

As expected, the JDA and RedPrairie merger was completed right before the holidays. The combined company (with total revenues of over $1 billion) will adopt the JDA brand name and be headquartered in Scottsdale, AZ. According to the press release:

Since the merger agreement was announced on November 1, 2012, the two companies have been preparing an integration plan designed to rapidly combine the operations of the two companies into one. The plan is now substantially complete, and the integration process will begin early in the new year and will be rapidly followed up with an integrated product roadmap in the second quarter, in time for the combined user group conference on May 5, 2013.

JDA has been down this road several times in the past with other acquisitions, including Manugistics and i2 Technologies. We’ll just have to wait until Q2 and JDA’s user group conference to get a better sense of the road ahead for the company and its customers. For related commentary, see “Best of Breeds are Dead. Long Live Best of Breeds!”

As I noted in my predictions for 2013, mobile technologies (along with social, cloud, and big data) will continue to dominate the technology headlines this year. The latest example is Roadnet Technologies, which announced enhancements to its MobileCast vehicle GPS tracking software, including a new module, MobileCast Manager “that targets sales and merchandiser managers so that they can monitor time spent at a customer or prospect as well as mileage by sales or merchandiser personnel.” According to the press release:

This is a web-based tool that presents data on time and mileage so that managers can understand how much time is spent with a customer, how many “routes” have been run, the amount of driver time and how many miles are reported for reimbursement. Sales representatives and merchandisers also have the ability to edit mileage reported via GPS to remove personal mileage.

In the 3PL world, UPS announced a new express air freight service, UPS Worldwide Express Freight, “for urgent, time-sensitive and high-value international heavyweight shipments.” Here are some details from the press release:

Customers now can ship pallets over 150 lbs. as easily as packages exclusively within UPS’s global air network from 37 origins to 41 destination countries and territories. This guaranteed, day-definite, door-to-door service features some of the fastest times in transit in the industry, including overnight shipping from the Asia Pacific region, Europe and the Americas to the United States. Two-day shipping is available to Europe from Asia Pacific, the United States, and the Americas.

 

UPS Worldwide Express Freight service offers many of the same features as UPS’s Worldwide Express package service, including automated shipment preparation, online tracking and proactive notification technology. In addition, both express freight and package shipments are consolidated into one bill.

Finally, the Wall Street Journal reported that Walmart plans to monitor the warehouses of its 3PLs, “in the same way it tries to police conditions at suppliers’ factories around the globe,” in response to “protests, fines and lawsuits stemming from complaints of poor worker treatment at the warehouses.” Here are some excerpts from the article:

In California, state regulators have been investigating warehouses for violations including failure to provide necessary safety shoes and other equipment, as well as allegations that workers with heatstroke were denied proper medical care.

 

In Illinois, workers have filed a class-action lawsuit alleging that a hiring agency cheated warehouse workers out of wages by rounding down hours and withholding overtime pay.

 

The warehouse industry has a history of worker safety problems: With more than 670,000 workers, there are 5.5 injury and illness cases per 100 full-time warehouse workers, higher than the rate at industries such as mining (2.2 cases per 100 workers), construction (3.9) and manufacturing (4.4), according to the U.S. Department of Labor.

Cases involving Schneider National and NFI Industries were mentioned in the article. Both 3PLs are pointing the finger at the staffing agencies they use as being the responsible parties. In my opinion, however, that’s no excuse, assuming the alleged wrongdoings are true. When you outsource a function to a third party, you don’t outsource ultimate oversight and responsibility. This is true for shippers outsourcing to 3PLs, manufacturers working with suppliers, and 3PLs working with subcontractors like staffing agencies and trucking companies.

At the end of the day, the buck stops with the brand owner at the top of the pyramid, in this case Walmart, which is why the company is taking action. We’ve seen it in other cases too, such as Apple taking action in response to labor issues at Foxconn and its suppliers, and it wouldn’t surprise me if other companies follow Walmart’s lead in taking a deeper and closer look at its outsourced logistics operations. As we’ve seen on the product side, having visibility to Tier 1 suppliers is not enough; you also have to know who your 3PLs are subcontracting to on your behalf, and if those subcontractors are subcontracting to other companies too. And you have to make sure that everyone down the chain is informed of your policies and expectations, and is in compliance with them.

And with that, have a great weekend!

Song of the Week: “Head On” by The Jesus and Mary Chain

(Note: JDA is a Logistics Viewpoints sponsor)

Guest Commentary: Supply Chain Resilience, Agility, Efficiency and Innovation

Guest Commentary | By •

During her welcome remarks at the 2012 Council of Supply Chain Management Professionals (CSCMP) Annual Conference in Atlanta, Nancy Nix, chair of the CSCMP board of directors, said that companies should judge the value of supply chains going forward by their resilience, agility, efficiency and innovation. This is a far cry from the traditional view of supply chains as a trade-off between costs and customer service.

That got me thinking about what common thread might run through these supply chain qualities since on the surface some of them seem to be contradictory. For example, when I researched resiliency, the customary prescription was redundancy. Having worked in the IT disaster recovery business years ago, this made sense to me, as redundancy was what we provided. But redundancy isn’t cheap and would be considered at odds with efficiency.

Also, efficiency is often associated with lean supply chains – streamlining operations and taking out waste. But these actions tend to hurt a company’s agility. When the unexpected happens, there is very little wiggle room to respond.

Innovation is the real stumper. By definition it disrupts the status quo. That is contrary to lean supply chains and at cross-purposes with resilience. How could Nancy lump innovation in with the other key supply chain qualities?

After reluctantly admitting that Nancy is probably a lot smarter than I am, and knowing as an engineer in the software business that I’d want to use technology to solve the problem, I decided the better question might be what common supply chain technology could help make all of these seemingly contradictory initiatives successful?

While there are many supply chain technologies that in one way or another support these four initiatives, the one constant across all of them is the need for supply chain visibility – that ethereal concept so many companies have struggled to achieve. Let’s look at how visibility can help companies attain the four supply chain capabilities Nancy says are essential.

Resilience has become a hot topic since the earthquake and tsunami in Japan and the floods in Thailand exposed the vulnerabilities of many supply chains, but it is not new. In a 2003 article on The Resilient Enterprise, Yossi Sheffi of MIT defined it as “the ability to bounce back from disruptions and disasters by building in redundancy and flexibility.” Yet, redundancy adds complexity to supply networks that have already grown more complex with globalization.

The solution to effectively managing complex global and redundant supply networks is near real-time visibility. While extending visibility beyond internal operations has been a challenge for many companies, the advent of cloud networks and communication tools now allow supply chain partners to communicate on a many-to-many network basis that provides immediate visibility to what is happening virtually anywhere around the world. Knowing what is happening – what goods have been produced, what is in transit, where disruptions have occurred – enables companies to recover more quickly from disruptions, but also reduces the uncertainty that would otherwise lead to increased safety stock and greater expense. Thus, visibility can help improve both resiliency and efficiency.

Creating agile supply chains involves more than being able to react quickly when faced with change or disruptions. It requires the ability to see problems coming before they hit you so you can take action ahead of the curve. For example, you would want to know immediately that your container of goods didn’t make the ship leaving China today because the drayage company had an equipment failure rather than finding out when the ship was unloaded in port 20 days later. Or you would want to know now that your new product introduction is quickly selling out at stores so you can immediately send replenishments rather than discovering lost sales from week-end sales figures. Network-wide visibility can provide early warning of these and many other issues so you can react with more agility.

So how about innovation, which by definition causes change? Change disrupts your carefully planned and efficient supply chain operations. The role of visibility here may not be as apparent. Supply chain innovation isn’t created within your four walls like Edison designing the light bulb in his lab. Supply chain innovation comes from supply chain professionals having visibility to everything that is happening across their networks and seeing opportunities to make things flow better. The supply chain innovator’s laboratory is the entire network and visibility enables him or her to analyze supply chain dynamics to understand where change will be most helpful. Therefore, visibility is the precursor to innovation.

Now that I’ve tied Nancy Nix’s four essential supply chain qualities together with visibility as a key enabler, I feel a lot better that they aren’t so contradictory after all. Unfortunately, that still doesn’t make me as smart as her.

James LeTart has over 30 years of sales and marketing experience in the systems technology field. He has spoken at numerous national and regional trade events and his work has been published in many industry publications and blogs. For the past 13 years Jim has been Director of Marketing for RedPrairie, a leading best-of-breed supply chain, workforce and all-channel retail solutions provider, where he has responsibility for corporate messaging and content development. Jim has an Industrial Engineering degree from Marquette University and an MBA from the University of Michigan.

Best of Breeds are Dead. Long Live Best of Breeds!

Logistics Technologies | By •

Last week, RedPrairie and JDA Software, two leading providers of supply chain and logistics software, announced that they are merging together (see our commentary here). Both companies had grown through the years by acquiring best of breed vendors, and now that they have reached a certain size, they are joining forces to offer customers “a full spectrum of solutions for planning and execution across the entire value chain.”

In a call with analysts last week to discuss the merger, Hamish Brewer, JDA’s CEO who will also lead the new company, shared his perspective on what customers are looking for today with regards to IT:

“Most of our customers today have an IT strategy that I would broadly describe as best of suite, which is to say that they don’t…want to do everything with one supplier, but they don’t want to go back to having hundreds of suppliers either. They want to have a handful, usually a single-digit number, of suite providers that can handle sizable pieces of their IT infrastructure, which can work together, especially now that we have much better common platform integration tools. So, in general, that is the IT strategy that I hear from most of our customers.”

So, where does this leave best of breed providers of supply chain and logistics software? Must they become “best of suite” providers to survive? Are best of breeds going the way of the dodo bird?

First, it’s important to note that (to paraphrase Mark Twain) the death of best of breeds has been greatly exaggerated in the past. Back in 2003, for example, Oracle CEO Larry Ellison emailed a colleague that “Within the year every analyst will agree that best of breed is dead — except at dog shows.” He was referring to CRM best of breeds, but the belief extended to other applications too. Almost a decade later, best of breeds are alive and well, with new startups entering the market every year. The bottom line is that as long as there are new supply chain and logistics challenges and opportunities to go after, as long as there are continued innovations in technology, and as long as there are entrepreneurs with new ideas and the drive to realize them, there will always be a role for best of breeds in the market.

That said, many manufacturers and retailers, especially large ones, are indeed pursuing the IT strategy outlined by Brewer. So, aside from expanding their solution footprints, either organically or via acquisitions, what else can best-of-breed software vendors do to succeed in the market?

I believe there are at least four areas where best of breeds can set themselves apart from the competition:

Provide network-based solutions: Supply chain and logistics processes are inherently network-centric — i.e., they involve many external parties, such as suppliers, customers, transportation providers, 3PLs, and customs. Best of breeds that provide customers with software designed for cross-enterprise planning and execution, and also provide a built-in network of trading partners, will have an advantage over vendors that provide software designed only for “inside the four walls” and also require their customers to build and maintain their own B2B networks. For related commentary, see “Revisiting Supply Chain Operating Networks” and “An Overlooked (But Critical) Component of Transportation Management Systems” and “SAP Buying Ariba: Because Software Alone is Not Enough.”

Leverage Social and Mobile technologies to innovate user interfaces and workflows: Startups always have the advantage of designing their solutions from the ground up using the latest technologies and software innovations. Two of the hottest areas in technology today are social and mobile capabilities, which are opening new paths to innovation, particularly in user interfaces. For related commentary, see “Guest Commentary: Next Generation of Visualization and User Interaction” and “Maps: The New ‘Killer App’ in Supply Chain Software?”

Focus on under-served vertical industries: This has been a formula for success for many best-of-breed vendors in recent years. Instead of following the herd into consumer packaged goods and retail, they have differentiated themselves by serving 3PLs (including freight forwarders and brokers), transportation providers (including trucking companies, railroads, and airlines), and companies in the chemical, pharmaceutical, oil and gas, and other industries with specialized requirements.

Address the “white spaces” in existing solutions: In other words, identify the functionality gaps in existing solutions and fill them. For examples related to transportation management systems (TMS), see “Transportation Forecasting: A ‘White Space’ in TMS” and “Innovation: Addressing the White Spaces of TMS” and “What’s Next in Transportation Management Systems (TMS)?”

Finally, there are two more important points to remember:

  • It doesn’t matter what software application or suite you implement, it won’t deliver much value unless you have the right people, with the right training and know-how, to use it effectively. And this is where 3PLs and managed services providers come in. As a 3PL told me recently at a conference, “A shipper can deploy a TMS themselves, but many of them don’t have the resources internally to effectively use and manage it, so they don’t get the full value from the application or stop using it. What a 3PL brings is not only the technology, but also the experts that know how to use it to continuously deliver value.”
  • “Best-of-suite” might matter more to customers today than in the past, but not at the expense of time-to-value and speed of innovation. In some cases, speed and flexibility actually matter more to customers than functional breadth and depth, which is why software-as-a-service (SaaS) solutions continue to gain traction in the market.

(Note: JDA Software, Oracle, and RedPrairie are ARC clients and/or Logistics Viewpoints sponsors)

This Week in Logistics News (October 29 – November 2, 2012)

Mergers-Acquistions | By •

The biggest news this week was Hurricane Sandy, which left a path of flooding, power outages, and destruction along the east coast. Our thoughts and prayers are with everyone affected by the storm, especially those hardest hit in New Jersey and New York City. The storm also disrupted logistics operations, including the closing of local airports and the Port of New York/New Jersey. Events like these are another reminder of why companies need to prioritize and invest more in supply chain risk management.

In other news…

Earlier this week, rumors started circulating online that JDA Software was on the block. Yesterday, those rumors were confirmed with the official announcement that RedPrairie and JDA Software are merging. According to the press release, “entities affiliated with RedPrairie,” namely New Mountain Capital, “will effect a cash tender offer to acquire all outstanding shares of JDA common stock for $45 per share, [which] represents a 33 percent premium to JDA’s stock price on October 26, 2012…The transaction has a total enterprise value of approximately $1.9 billion.” The new combined company will be private, with JDA’s current president and CEO, Hamish Brewer, serving as CEO. RedPrairie’s CEO, Michael Mayoras, will remain on the board.

The solution footprints of both companies are mostly complementary, with JDA’s strength in supply chain planning, merchandising and pricing solutions, and RedPrairie’s strength in warehousing, workforce management, store operations and e-commerce. The biggest area of overlap is transportation management. JDA has a stronger market presence and larger customer base in TMS than RedPrairie, thanks to its previous acquisitions of Manugistics and i2 Technologies, so I suspect the new company will position JDA’s solution as the primary offering moving forward.

I’m still thinking through what this merger means for both companies, their customers and employees, and the market in general, but here are some quick thoughts and observations:

  • A lot of the buzz and hype generated by supply chain vendors these days is centered on CPG-Retail, with discussions about omnichannel, mobile, and social media leading the way. If you’re a B2B company, say in the paper or chemical industry, you’re probably not feeling much love these days, at least from the marketing folks. Let’s hope the R&D folks don’t forget about you too. And to be fair, the same goes for analysts and industry watchers like us.
  • I wonder if SAP and Oracle are smiling today. Best-of-breed providers used to criticize them for their single-platform strategy and value proposition (and their lack of supply chain and logistics functionality, at least historically), but now these best-of-breeds are migrating toward a similar single-platform strategy and value proposition. This merger, at least in part, is a response to the shifts taking place in the competitive landscape and the ongoing desire by customers, especially large companies, to simplify their IT landscape.
  • As I’ve argued in the past, software alone is not enough. You can have a best-in-class enterprise software platform within your four walls, but without an adequate B2B connectivity network and associated capabilities, you can’t effectively manage end-to-end supply chain processes. This is an area that RedPrairie and JDA still need to address.
  • JDA’s revenues are down 2 percent this year through the end of September compared to the first nine months of 2011. Software and subscription revenue declined 18 percent in Q3 2012 compared to last year. In contrast, peer companies like Manhattan Associates, SAP, Oracle, and Descartes Systems Group have all grown their revenues this year. This merger won’t help sales in the near term, as customers wait for more clarity and information about what this means to them, but going private and taking Wall Street off its back could help down the road.

Here are some initial thoughts from Steve Banker at ARC:

Product integration is always difficult in these situations. When a new common product set is achieved, moving to the new solution is more akin to a brand new implementation than an upgrade for existing customers. That said, JDA has a lot of experience in this area. The JDA/i2 integration went quicker and smoother than I had expected.

 

After years of talking about eCommerce, eFulfillment, and Omnichannel, I think the time is now for bringing a more holistic solution set to market. Home Depot had a conference call for financial analysts in June where the sense of urgency for big retailers in this area came through. The biggest product holes are that neither RedPrairie or JDA has a Demand Signal Repository, although JDA has argued the DSR matters less than the analytics that ride on top of the DSR. And omnichannel requires much better store level inventory accuracy. Will retailers buy what in effect is a light WMS for the store? RedPrairie has such a solution but I don’t sense that retailers have been buying that type of solution.

In other news, Con-way reported Q3 2012 results this week. Revenue increased 2.0 percent and operating income declined 9.7 percent in the quarter compared to Q3 2011. Here are some excerpts from the press release:

Commenting on the quarter, Douglas W. Stotlar, Con-way’s President and CEO said, “Consolidated third quarter results for 2012 fell short of our expectations, due largely to higher-than-anticipated employee benefit expense, primarily healthcare, at Con-way Freight, and technology costs incurred in support of our three-year improvement roadmap.” Stotlar added that volume trends so far in the fourth quarter at Con-way Freight have declined compared to last year. “Tonnage levels in October, prior to the effects of Hurricane Sandy, were about three percent below those of October 2011, so we expect the fourth quarter of 2012 to be challenging as well.”

 

Menlo Worldwide Logistics…maintained consistent growth in revenues and net revenues but saw a modest decline in operating income. “Gains in core transportation management services were somewhat offset by lower warehouse management revenues,” Stotlar said. “Menlo continued to benefit from its international operations and their pipeline of opportunities.”

On the technology front, social media and mobile solutions continue to dominate the headlines. SAP introduced two new social offerings: the SAP® Jam social software platform and the SAP® Social OnDemand solution. Here are some excerpts from the press release:

The design principle behind SAP Jam was to create a unified environment in which users can easily connect with colleagues and collaborate around data, content and processes right where they are working, to more effectively solve problems, make decisions and drive results…The platform combines the best parts of SuccessFactors Jam for enterprise social networking, the SAP® StreamWork® application for social workflow and problem-solving as well as new capabilities.

 

SAP Social OnDemand helps marketing organizations take action on insight by simplifying the process of prioritizing and engaging on social media and honing in on key trends. With real-time monitoring, routing and escalation, it helps ensure that critical conversations are not missed and that responses are appropriate, based on a poster’s profile that includes social influence metrics as well as customer data from other enterprise systems.

Meanwhile, Manhattan Associates announced the development of Mobile Shipment Manager, an application for Manhattan SCALE available on Windows 8 and Windows RT. “Mobile Shipment Manager, the latest creation from Manhattan Mobility Labs, provides immediate visibility into supply chain shipments and allows one-touch management access via any Windows 8-enabled device.” The press release includes the following quote from Jim Casselman, chief information officer, Buffalo Hospital Supply: “An application like this will enable me to re-route shipments as needed, execute rush deliveries and immediately remedy any challenges from a mobile device while integrated to Manhattan SCALE. Being able to make key supply chain decisions anywhere is invaluable to me and my operations team.”

Finally, and shifting gears from logistics, yesterday was Type 1 Diabetes Day (T1D), an initiative launched by JDRF to raise awareness about this chronic disease that affects millions of children and adults, including my oldest daughter who was diagnosed last year at age 11. Unfortunately, Type 1 Diabetes (which is not the same as the more common Type 2) is on the rise for reasons that aren’t clear to researchers. This not only raises the stakes for finding a cure and improving treatments, but also for educating the public about this disease. As I’ve learned this past year, many people (like I was until a year ago) know very little about T1D — or worse, they have incorrect information. So, instead of providing a song of the week, please take a few minutes to watch this informative “Type 1 Diabetes 101” video featuring kids providing an overview of the disease, its symptoms, and how it impacts their daily lives.

(Note: Con-way, JDA Software, Descartes Systems Group, Manhattan Associates, Oracle, RedPrairie, and SAP are ARC clients and/or Logistics Viewpoints sponsors).

Yard Management Solutions Impose Control on an Inherently Chaotic Process

Transportation Management Systems | By •

As Chris Jones from Descartes said in a Logistics Viewpoints column, the Forrest Gump quote — “Life is like a box of chocolates; you never know what you’re gonna get” — applies to the challenge of managing a yard, particularly inbound dock operations.

A yard management system (YMS) controls the yard attached to a warehouse or distribution center (DC). YMS functionality includes dock door scheduling, check in and check out, location of trailers in the yards, trailer asset management, and efficiently moving trucks and trailers to and from dock doors. A YMS can save companies money through reduced detention fees, improved yard labor efficiencies, and better warehouse utilization.

There are four distinct groups of YMS vendors. First off, there are standalone vendors. Some are more focused on deep software functionality, such as Zebra Technologies and C3 Solutions, and others are more focused on providing real time location asset visibility, such as PINC Solutions and Exotrac.

I was briefed recently by both Zebra and Exotrac. What impressed me about Zebra’s solution was the intuitive, easy-to-use configuration engine that Zebra uses to accomplish complex yard optimization. Exotrac, in turn, provides a low-priced system that is well suited for 3PLs, with a real time location system based on GPS.

Several warehouse management system (WMS) vendors also provide YMS solutions, including RedPrairie, Manhattan Associates, HighJump Software, SAP, and Oracle.

An ARC client mentioned that they had seen a detailed demonstration of RedPrairie’s YMS capabilities and were impressed. Basically, RedPrairie has taken the task management, inventory management, and waving capabilities that are core to its WMS and extended them out to cover yard activities. This has allowed RedPrairie to have the kind of robust yard functionality historically associated with a Zebra or C3 solution.

Transportation management system (TMS) vendors also offer a subset of YMS functionality; most offer web based dock scheduling. A robust dock door scheduling system does not hard schedule a truck for a particular dock door. Rather, the YMS should fill the open time slots in such a way that the dock doors are fully scheduled, but also allows for more flexibility later if trucks arrive early or late.

Most TMS suppliers offer web based dock scheduling. However, Descartes and JDA Software both offer more holistic solutions to the dock door scheduling problem. Descartes calls its solution “Logistics Flow Control.” Descartes argues that retailers that use a web-based dock scheduling portal will often have synchronization problems. Here is how Chris Jones described it in his guest commentary:

The LTL carrier typically cannot schedule an appointment until it has knowledge of the shipment, which typically means goods in hand and evaluation all of the deliveries it needs to make. At that point, because of DC capacity constraints, the retailer/distributor’s schedule may not offer a delivery window that makes the contracted date. Or the LTL carrier is not aware of the impact of “slight” changes to the delivery date, and changes it to allow more deliveries to be consolidated before scheduling an appointment. In the end, the goods fail to show up on time and depending upon the contractual agreement, fines are levied on the bewildered supplier.

JDA, in turn, has recently released a more granular, constraint-based dock door scheduling solution than I have seen from other YMS suppliers. With existing transportation management systems, if the dock manager changes the dock schedule, the optimization in a TMS begins to unravel. By attempting to preserve the freight savings associated with a transportation plan, JDA’s solution can potentially save companies more money than a traditional YMS would achieve.

Finally, the last category of yard solution involves managed services. C.H. Robinson, for example, offers dock scheduling managed services from the shipper’s perspective. The problem shippers face, particularly consumer goods companies, is that the retailers they work with all have different appointment scheduling systems, which makes scheduling tedious and inefficient. Several of C.H. Robinson’s clients have decided they don’t want their transportation planners engaged in appointment scheduling for two reasons. First of all, transportation planners can get busy putting out fires. When this occurs, planners often do not get around to appointment scheduling until late in the day, at which point the slots they want might be gone. Secondly, transportation planners make a good salary, so it is less expensive to outsource this task.

In conclusion, there is a lot going on in the yard solutions space, far more than I suspected when I began researching this article.

(Note: C.H. Robinson, Descartes Systems, HighJump Software, JDA Software, Manhattan Associates, Oracle, RedPrairie, and SAP are ARC clients and/or Logistics Viewpoints sponsors).

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