Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

Warehouse Technology Implementations – The critical link between conceptual and realized productivity. Who’s doing your heavy lifting?

Warehouse Management Systems | By •

Time and again I write about the business value of warehouse technologies – WMS, warehouse automation, and robotics. I also discuss business processes that these technologies support. However, I believe that my writings have failed to highlight the importance of the implementation and integration processes and the value delivered by the teams that see these projects through. Furthermore, I believe the underappreciation for these processes and capabilities may extend to others besides me. The phrases such as “out of the box” and “plug and play” software conjure up the image of almost instantaneous transition between concept and usage. But we know that is not the reality on the ground. Thankfully, modern technology advancements have extended configuration options and simplified implementation workflows. But WMS implementations are still complex projects that require intimate knowledge of warehouse business processes and the underlying technologies.

Bridging the Gap Between Concept and Productivity

Warehouse operators typically embark on a change management journey prior to the involvement of a technology implementation partner. For comprehensive changes, such as the implementation of a new WMS at a complex facility, a company must determine its priorities and favored processes through proper planning and communications with internal stakeholders. Subsequently, this process should be extended to inform the implementation team. Despite differences in underlying methodologies, successful deployments tend to combine the discipline of thorough planning with the flexibility to accept contingencies that will increase project value and customer satisfaction. “A large portion of the implementation should be dedicated to assuring overall value is realized through a combination of creating both a sustainable and supportable solution, while also meeting business requirements,” according to Jeremy Hudson, Director, Client Services, at Open Sky Group. With over 90 WMS, labor management system, or TMS go-lives in the last 24 months, Open Sky Group has the required knowledge and experience to balance current requirements with the flexibility to meet changing needs as they occur.

Experience provides the knowledge and perspective that makes a good implementation partner. According to Ron Lazo, Vice President, Professional Services Organization at Manhattan Associates, “A structured implementation process harmonizes project execution with the intended business outcomes to drive greater time-to-value.” This statement furthers the concept of experience providing the acumen to balance what may sometimes be competing objectives. Aside from internal competing priorities, there can also be a tendency to want everything without the consideration for time and cost impacts.

An experienced implementation team will be able to align business objectives with the capabilities of the software or automation. Jeremy Hudson of Open Sky Group finds it imperative to focus on weighing operational conformity to the base product versus the impact of solution modifications to meet “current state” processes. He believes customers can inform their decisions by asking themselves “Is it worth making a modification which could be expensive and cause challenges down the road, or is it better to change your process to meet the software without a modification?”

Thinking Broad and Deep

There are a couple common threads that I noticed when reviewing insights from experienced consultants. One is that they know the important considerations and when to prioritize the various options. Second is that they take a broad and deep perspective on the value the technology provides to their customers. The solution should be implemented for current requirements, and amenable to future needs. Time-to-value, total cost of ownership, and system sustainability are all central considerations. As is a holistic view of how the given technology fits into the broader operational and technology landscape. Ron Lazo of Manhattan Associates provided specific examples of how Manhattan’s orchestrated implementation efforts across warehousing and transportation operations align activities, providing benefits such as enhanced inbound shipment visibility, smarter appointment management, automated workflows, and efficient labor management.  John Santagate, VP of Robotics at Körber Supply Chain Software summed up the value that experienced implementation teams bring to the table, “It is easy to overlook the end-to-end impact of a new technology deployment in the warehouse. Leveraging the WMS implementation and integration team can help provide a more holistic view. These teams have deep knowledge of the operation and technology landscape and are able to identify process, workflow, and technology improvements that will drive value.”

Finally, a number of professional service executives stated a point that could be overlooked. Namely, end-users at the client company must adopt the solution, use it properly as planned, and execute on change management initiatives to extract the expected value from the new technology. Justin Ritter, VP of Operations at Lucas Systems stated that customer training is a keystone of a successful implementation project. “You can’t skip user training and support during go-live. Otherwise, you risk the implemenation of software that isn’t properly utilized and therefore doesn’t deliver the expected results.“

TMS ROI: Five Pitfalls that Will Drive You Mad

Guest Commentary | By •

Picture2Many times when a company implements a new transportation management system (TMS), it expects a certain level of savings based on what was promised during the sales cycle. However, a year or two into using the new system, those promised savings often remain unrealized.

While there are many reasons for this “TMS disconnect,” the most common include:

1. Trying to force the TMS to match your current processes A new TMS implementation offers the perfect opportunity to evaluate and improve business processes and streamline operations. A TMS typically offers more than one way to accomplish certain tasks and some flexibility in setting up workflow processes. They also have a set of parameters designed to produce optimal operational results. Some companies resist making changes to their existing processes and will ignore the TMS provider’s advice by trying to duplicate their current business processes in the TMS. This can lead to “system workarounds,” suboptimal routing results and less savings than expected. (For example, rules or processes that can affect TMS savings include tight pickup and/or delivery windows that reduce consolidation opportunities and allowing orders to drop into the system late, by-passing optimization and forcing them to be manually planned.)

2. Bypassing the system-generated solution It’s not uncommon to hear a transportation planner say, “The system can’t plan as well as I can!” This I-can-do-it-better mindset leads planners to manually plan loads themselves or adjust the TMS. While it’s true that an individual might be able to plan one or two loads better than the system, the system is evaluating hundreds of scenarios across thousands of orders to locate the best solution for all orders–not just one individual order. Another common problem? Individuals bypass a system-selected carrier and choose another one. The new TMS should enable monitoring this type of activity through reporting, though.

3. Rushing the TMS implementation so it’s not done properly Faster is always better, right? Every TMS vendor knows how long it takes to properly implement their solution based on a firm’s requirements. But inevitably customers ask vendors to cut down their implementation timeline for one reason or another. A lot of TMS vendors will cut down their implementation timeline to win the business, but this can result in shortcuts being taken or set the implementation up so it needs a “Phase 2” to achieve many of the money-saving features. More often than not, “Phase 2” never happens and the features that could drive cost savings are left on the shelf.

And while companies may be willing to make changes and reduce costs, they often overlook effective KPI reporting in an effort to save time–yet another casualty of rushed implementations. Without proper metrics in place to monitor savings and compliance, companies may be inadvertently sabotaging their results, since implementing at TMS without them can make it difficult to achieve savings goals.

4. Implementing the TMS without having necessary support in place A TMS is similar to a living entity: It requires proper care and maintenance. Many times after a TMS is implemented, little thought goes into keeping the system running at peak performance, and one or more of the following occurs:

  • The level of assigned system support personnel is inadequate
  • Rates are not maintained
  • Carrier commitments and capacities are not updated
  • New TMS users are not adequately trained

Any and all of these oversights can lead to reduced savings.

5. Placing more constraints on the system during implementation than accounted for during evaluation Most companies evaluating a TMS vendor take some shipment data and model it using their optimization engine. This exercise will often show large savings based on shipment consolidation, mode shifting, carrier selection, etc. However, when the solution is implemented, the level of savings does not match that of the optimized data sample.

As a peak under the hood: When a company’s data is modeled, real-world constraints may not have been applied. For example, were origin and destination hours of operation taken into account? What less-than-truckload (LTL) tariff was used?  Were loads consolidated into more stops than committed carriers are willing to do? Modeling of sample data during the evaluation process is a great way to see the TMS’ capabilities and get an idea of possible savings. However, it should not be the only factor in determining estimated cost savings; there is still a lot of work to be done and decisions to be made between modeling the data and final implementation.

A TMS is a great asset in today’s complex supply chain environment and can bring many benefits to the bottom line–from cost savings to increased visibility. Proper TMS implementation and maintenance is extremely important in ensuring maximum return from the investment.

Kirk Graves is Director of Chainalytics’ Transportation Competency. He brings 20 years of extensive transportation and logistics experience across a myriad of industries to his group’s client engagements. His areas of specialization include TMS implementations, systems design, continual process improvement and logistics operations.

WMS at Mars, Inc: M&Ms from the DC to You and Me

Warehouse Management Systems | By •

Mars ChocolateIn September I published a Logistics Viewpoint article titled The Evolution of WMS Customer Requirements. The article discusses how commercial WMS functionality has improved substantially over the years and is now sufficient to meet the needs of most practitioners. As a result, today’s customers are making WMS purchasing decisions based on an expanded set of criteria. For example, very often practitioners are looking for the ability to standardize and replicate business processes across their organization, and to minimize implementation and upgrade costs. At the JDA Software conference, Mars, Inc. executives Carlos Miranda and Russ Dostal described the Mars implementation of JDA WMS across the organization. The Mars case is a great example of a WMS project that provided the kind of holistic scope, business process standardization, and low total cost of ownership (TCO) that today’s practitioners strive to obtain from their WMS implementations.

Finished Goods Distribution at Mars
Prior to 2012, Mars utilized a legacy WMS system at many of its sites. This system was manual in the sense that orders were printed out and distributed to pickers and pallet building was not system directed.  Also, the paper-based system placed practical limitations on assigning more than one picker to each order.

Mars chose JDA WMS as the solution for its legacy WMS replacement project. The chosen system architecture included multiple hosts and instances, as well as multi-client sites.  Multiple warehouses are supported with one instance of the WMS application. This reduced the TCO and streamlined implementations, since they only had to build one set of integrations and were able to consolidate infrastructure. In addition, Mars leveraged JDA WMS multi-client functionality that was originally developed for 3PLs. Mars used this functionality to house operations for several business segments in one warehouse entity to obtain data segregation capabilities, better inventory visibility, and efficient host system utilization.

Mars WMS Project Business Benefits
Mars’ first go-live of this JDA WMS project was in 2012. Currently, at least 17 sites have gone live in the US, across 4 business segments. The new system provides the expected operations benefits such as system directed work, RF for real-time task execution, automated task assignments, and efficient task grouping. Also, the system can now assign multiple pickers per order if desired, and pallets building is now automated and system directed. Perhaps most impressive, training time to get new pickers up to speed has gone from 26 weeks on the legacy system down to 1 week on the current set up.

In addition, the broad scope, standardization efforts, and system architecture have provided the low TCO and scalability that many practitioners are looking to obtain from today’s WMS projects. For example, the system’s modularity simplifies roll-outs and allows the available functionality to become widely available across the organization. Mars can easily copy existing sites for use in new site deployment. Furthermore, there is a consistent look and feel to application features such as dashboards and reports. Finally, consistent business processes and methods are deployed across sites, allowing for consistent training, support and the sharing of best practices.

Conclusion
Today’s WMS customers are looking for more than just a comprehensive set of features and functionality. They are looking to scale up their use of technology and expand the project’s return on investment through the desired standardization, centralization, and flexibility. Mars, Inc. implemented JDA WMS across numerous sites and business segments. The company utilized a scalable architecture and creatively leveraged the software’s multi-site functionality to obtain scalability, flexibility, low costs, and enhanced WMS project ROI.

Guest Commentary: More than Features and Functions – The Importance of Implementation in Selecting a Shipping Software Solution

Guest Commentary | By •

If you are a global enterprise, then delivering your products to customers in a cost-effective manner, on-time and in adherence with local and international regulations is a critical success factor. And to operate at prime efficiency, you must incorporate shipment execution, logistics, global trade, global multi-carrier integration, trade compliance and shipment tracking as part of your business processes.

A key enabler to meeting your customers’ expectations is having an effective global shipping solution. Your solution requirements will depend on your industry; the attributes of the products you ship (e.g., weights, dimensions); where you ship to (domestic, international); and other factors. There are many shipping solutions in the market to choose from. But selecting the right shipping software that meets your functional requirements is just half the battle; the other critical half is implementation – i.e., deploying the software in such a way that it truly gives you a competitive advantage and doesn’t just become another piece of software in your company’s financial books as an “asset” but with no returns.

When it comes to implementing a shipping solution, here are some important considerations:

  • Deployment options – Traditional on-premise or a software-as-a-service (SaaS) option. Look for a provider that can support both and also a hybrid model.

  • Support for both centralized and distributed architecture – You can implement a different solution for each operation and/or geography or implement a single solution that spans the different operations and geographies.

  • Integration options – Must support Service Oriented Architecture (SOA) and other industry standard connectivity options like EDI, XML, HTTP, HTTPS, JMS, etc. for flexible and scalable integration.

  • Certified integration with leading ERP software vendors – Standard connectors and adapters to leading ERP software is a must.

  • Certified carriers and services – Supports all major parcel, TL and LTL certified carriers.

  • Multi-country, multi-currency, multi-language and multi-regulation.

  • Certified, integrated, and automated customs clearing – This is critical for meeting regulatory and legal requirements.

  • Support and Ease of personalization – Must have a robust, non-intrusive framework to enable future changes to reporting, trade documents, labels, regulatory changes, etc. Having tools to self implement these changes will make you less dependent on the services partner.

In terms of selecting a well-trusted implementation partner, here are some things you should look for:

  • Deep industry and product knowledge – Provide the support, resources and knowledge globally. It’s much more efficient when using one partner versus having to use many.

  • Skills availability across all the regions – Local resource availability is the key.

  • Must have a certified partner eco-system for less dependence on the implementation partner capacity constraints and for competitive regional consulting rates.

  • Proven implementation methodology using best practices and a global project management approach to deliver consulting in all the areas of the product.

  • Prescriptive value-based consulting and accelerated time to benefit.

Finally, there are some additional factors to consider that also go beyond features and functions, such as:

  • New Carrier On-boarding – Software vendor partnering with key international/regional carriers for new services certification and support. This should be the key criterion to vet before selecting any shipping software.

  • Ongoing Support and Maintenance – 24X7 global multi-lingual support, with clear and measurable Service Level Agreement and capability to support future growth into other geographies.

  • Speed of incorporating regulatory changes – Global trade regulations are always in flux. The speed of incorporating the changes in standard product functionality should be clearly defined. Beware of getting these changes as customizations.

  • Compliance, content management and support – Its imperative to have regular, automated and validated compliance data upload into your application to meet regulatory requirements. Fast turnaround of this data is very critical to your business.

  • Support for standard printers to print Labels – Accurate shipping labels and manifest are two important documents that will enable you to ship your products out of the warehouse. Speed and support in churning out these in a high volume shipping business is paramount to your organization’s success.

In summary, a fully functional shipping software solution can help companies streamline their global trade processes to save time and money while ensuring regulatory trade compliance. The key is not just to select the right shipping software that meets all of your functional requirements, but also working with a well-trusted implementation partner who can help you achieve a faster return on investment and work with you long term to manage ongoing changes effectively.

Murli R. Shastri, CPIM, PMP serves as Precision Software’s Director of Technical Services. Murli has more than 22 years of experience in IT Industry with rich global experience in software development, support, services management, services delivery, offshore strategy planning, business development and offshore development centre management and perations. His background includes design, development, and implementation of QAD product solutions for large multi nationals, including project management of complex integration solutions.

JDA Software Focuses on Time to Value

Cloud/Software-as-a-Service | By •

All too often, when companies buy and implement supply chain software, you hear a similar story: the implementation took longer than planned and the company grossly underinvested in training. Also, the needed software customization made future upgrades costly and time consuming to the point where upgrade cost and effort often rivaled a brand new implementation. Because of this, companies understandably delay upgrades for years, thus foregoing the latest product enhancements. In the meantime, power users leave the company and the value the company can derive from the software diminishes.

JDA Software, a leading provider of supply chain planning, merchandising, and pricing solutions (and an ARC client), appears to recognize these problems. A few weeks ago at its JDA Focus 2012 User Conference, the company announced a cloud strategy to improve time-to-value for its clients and reduce both implementation and support costs. JDA’s intention is to move from “behind-the-firewall” solutions to a cloud-based business model over the next three to five years.

When JDA speaks of cloud solutions, it means a private cloud, or hosted solution, rather than a multitenant cloud solution. JDA’s clients include some of the largest manufacturing, retail, and distribution companies in the world. These companies require extremely-rich functionality, but are also hypersensitive about data security. JDA believes that most of these large companies would not be willing to use a multitenant cloud solution.

It is easy to see how a multitenant cloud solution, like Salesforce.com, could potentially provide faster time-to-value and easier upgrades. After all, the architecture associated with a multitenant cloud solution eliminates the potential for customization, which as we have seen, typically lengthens implementation times and makes upgrades onerous. But how can hosted solutions improve time-to-value?

The key area in which a private cloud solution saves time over a behind-the-firewall solution is in hardware testing and deployment. JDA argues that, with a behind-the-firewall solution, ordering new hardware, receiving it, and testing it to make sure the hardware will scale to handle complex optimization will usually take at least six weeks. The company argues that the private cloud model can take four weeks off this timetable, reducing this to a two-week process. Based on this, JDA believes private cloud deployments will lead to an implementation that is about 10 percent faster overall.

JDA also believes that its costs to maintain private cloud solutions are substantially less than the costs associated with servicing behind-the-firewall solutions. In particular, the maintenance associated with upgrades should be diminished. When customers decide to do an upgrade, regression testing must be performed to determine whether the addition of a new feature or function will break any of the existing functionality the customer is already using. In the hosted model, JDA believes it can perform regression testing quicker and more reliably, leading to fewer service calls following the upgrade.

JDA proposes to share these maintenance service savings. For private cloud deployments, JDA will charge 20 percent of the software license cost for maintenance, rather than the existing 22 percent fee.

Finally, JDA has been providing managed services surrounding planning for several years. Clients can hire JDA professionals to help them forecast demand, tune demand, and inventory solutions to make sure the solutions continue to provide value. JDA’s professionals can also help prepare reports and analysis for sales and operations planning meetings. JDA can provide these services remotely or send planners to customer sites. Following an implementation, these services can be particularly helpful in helping to develop power users and helping companies accelerate time to value. JDA believes private cloud solutions will make it easier for its managed services personnel to add value.

JDA recognizes that some of its customers will never make the move to private cloud solutions. The company’s announced five-year plan to move customers to the cloud is an aspiration, not a requirement. Further, the company is closely examining its business processes in the consulting,  training, implementation, and maintenance areas to better understand how changes in processes can be mirrored with hosting to improve its customers’ return on investment. JDA has already begun to invest in this journey.

As enterprise solutions get richer and richer in functionality, it becomes harder for software vendors to differentiate solely on this basis. Time-to-value can be a differentiator. JDA’s cloud strategy does not solve all the problems associated with implementing and driving value from supply chain solutions. It does not solve, for example, the problem of locating and cleansing master data, which can greatly delay any supply chain implementation. Nor does the cloud strategy fully solve the customization problem. Nevertheless, JDA’s initiative is laudable and can serve to improve the ROI associated with supply chain planning projects.

Implementing a Supply Chain Application: The Cultural Issues

Just for Fun | By •

I’ve seen hundreds of presentations on how companies have implemented a supply chain software solution. I’ve also talked to hundreds of individuals who have been involved in implementing solutions. Successful projects include people, process, and technology considerations. Today, I want to summarize the main people-related considerations experienced implementers talk about.

First of all, a variety groups are typically involved in the process of approving, implementing, and ensuring supply chain solutions are effectively utilized.

  1. The Business Case Approval Group: These folks decide whether to fund a supply chain solution implementation or upgrade. It is a good idea to document the financial buckets that will give a solution its payback, and then turn those buckets into operational metrics or key performance indicators. For example, if you want to upgrade a replenishment solution, one payback bucket would be reducing inventory carrying costs. It may be that you are only actively managing only 70 percent of the stock keeping units in your current system. Increasing that percentage to 90 percent might be one of the goals for the upgrade, and that increase is associated with a savings number. In other words, “If we can get to 90 percent of inventory being actively managed, we will save this much money.”
  2. The Steering Team: It is their job to provide resources, guidance, and oversight for the entire implementation process. This cross functional team typically includes someone from IT, as well as representatives from the operations directly or indirectly affected by the implementation. At least one high-level executive is included because one key task of the steering team is to remove barriers to a successful implementation. These barriers sometimes involve people who put up roadblocks because they don’t like change or they believe the new processes embedded in the application will infringe on their freedom or power. Another common barrier is demanding that the application be customized to reflect the company’s unique way of doing things. The more implementations a company goes through, the less likely it will seek to add customizations.
  3. The Implementation Team: This is typically a cross functional team led by IT folks with project management training or experience. Having an experienced IT project manager is a key success factor.
  4. The Super Users: These are the first line of support for the application. Before the software vendor is contacted, the super users are asked “How do you do this?” These folks are also important for testing the application prior to general release to the rest of the company, and they commonly participate in training. “Train the trainer” is often a less expensive and more effective methodology for getting all users up to speed. If there is one thing most companies regret following an implementation, it is not having done enough training. “Take your budget for training and then double or triple it and you still have probably under budgeted” is a common piece of advice.
  5. Coaches: These folks, usually frontline managers of a process, are available to users who are not using the application effectively. It is a good idea for coaching to be proactive. In other words, don’t wait for users to come to the coach, but have a process for identifying users who are not using the application effectively, usually based on the operational metrics identified in the business case approval stage. If the goal is to get to 90 percent of inventory being actively managed, there should also be goals for each planner related to that higher-level metric.
  6. Internal IT Support: These folks provide second line support. When the problem is not how to do something but an actual system bug, users commonly go to the IT team. It is a good practice for this team to have quarterly or monthly calls with the software vendor to review issues surrounding bugs or usability. In large companies, where many users are using the same application, IT support personnel may specialize by application and/or by software vendor.

Finally, it is a best practice to have an IT/Finance Review Group actually review, post implementation, what sort of ROI was achieved or is being achieved – at one month, six months, one year, and two years after go live. This group is tasked with understanding why, or why not, a particular implementation was above or below expectations. This is not an exercise designed to cast blame, but rather to allow for continuous improvement in selecting and implementing IT projects. Unfortunately, this is the most widely ignored step of all.

Copyright © 2020 Logistics Viewpoints, ARC Advisory Group. All rights reserved • Design by

Archives