The Supply Chain Information Technology blog

A few weeks ago, Susan Evans shared with us her insights on “Global” Transportation Management Solutions. Today, she is back to share a little with us about using SCIT systems to help with customs regulations and global trade compliance.

-- SCIT Blog Team

• •    Assist import and export procedures,
• •    Reduce compliance and administrative costs, and
• •    Improve clearance times.

From the EU’s perspective, paper-free trading is also being implemented for stronger security. These higher security measures come from requesting additional, higher quality data that is of interest to customs. The data shows what is coming in, where it is coming from, where it is going, and if the burden of responsibility is on the buyer and shipper.

Additional benefits of complying with these regulations for the shipper include:

• •    A reduced amount of paperwork,
• •    Less administration time,
• •    Fewer opportunities for documents to be lost in transit, and
• •    A reduction of manual data input along the supply chain, creating less chance of human error.

So whether you manage customs filings and global trade compliance in-house or outsource, your systems need to be connected with other countries’ customs systems to ensure that you are complying with their regulations.

To help with his knowledge gap on international compliance, companies are selecting external solutions to ensure that they meet EU safety and security regulations, as well as improve overall efficiency and visibility of customs operations.

Solution providers such as Descartes, Kewill, KDS, Portbase, and others are taking a leading role in helping companies prepare to meet current and future compliance requirements.

Are you ready for paperless trade into the EU?

-- Susan


Additional Resources

• Podcast: Transportation: The "Move" Component of the Global Supply Chain
• White Paper: Global Trade Management Technology
• Enabling Global Trade Compliance through Automation
  

Tags: technology, europe, virtual

• Assess remaining legacy supply chain applications in your portfolio and determine gap and business case in relation to commercial technology alternatives.
• Assess existing technology infrastructure (processing, integration tools, communication, etc.) and determine upgrade prioritization.
• As forecast accuracy and demand variability continue to drive significant supply chain challenges, determine if your current tools support your process requirements.
• Look for opportunities to enable or enhance internal and external collaboration as a means to drive improvements in customer service.
• Evaluate your current transportation strategies – Available Transportation Management System technologies remain one of the smallest deployed technology solutions, despite emerging low cost / high value opportunities for deployment in many organizations.
• Identify WMS-enabling downstream productivity-accuracy opportunities, where applicable: labor management, voice-directed picking, integrated slotting management, pre-manifested picking, etc.
• Establish and track technology-related benchmarks against competitors (application adoption, event management, integration tool use, visibility dashboards, etc.).
• When contemplating upgrading supply chain execution applications, perform a gap assessment of processes against the proposed upgrade functionality.
• Consider opportunities to competitively bid what have been traditional application upgrades for supply chain execution applications, especially when upgrades can’t support prevailing process requirements.
• Identify future opportunities, such as visibility, TMS, GTM, etc., to pursue incremental implementation of transaction-based (SaaS) supply chain applications.

Tags: wms, supply chain, technology

I’ve recently toured several distribution center operations while evaluating new technology options. And one recurring improvement initiative that stood out at each of these sites is the pursuit of increased productivity. Nowadays, considering the constrained capital environment and short-term focus on operational budget performance, opportunities to invest in new technology are met with great optimism.

During my visits to these facilities, I noticed that the distribution and warehouse managers had very specific views of where and how they intended to leverage their technology investment – whether it be enhanced WMS functions that provide the ability to flow product from receipt directly to shipping or automated picking equipment options that can minimize direct labor for items in storage. 

Looking at the specific tasks identified by the DC managers for productivity improvement, their vision for the application of technology enhancement is accurate: The combination of WMS functions and automated material handing and picking technology will indeed increase the productivity in comparison to the current processes. But how much of those efficiencies are going to be relinquished through the inbound/outbound efforts feeding this process?

In some instances, the DC manager’s vision neglected the additional effort required to bring material into and out of the proposed automated picking application. They also did not factor in the effort required to consolidate multiple process/material flows for shipping. 

As I attempted to address how the proposed new process/technology applications would integrate into the existing operational flows, our discussions quickly reverted back to overcoming specific process challenges in the automation application. 

I wanted to take the conversation a step back and understand how this proposed application of technology could be leveraged across more the DC picking operations. But the DC manager was focused on the details of execution in one area rather than digging into how the proposed improvements impact the operation as a whole.  

My approach to productivity improvement is different. 

I start with a view of the overall operational metrics first (the forest). Only with a clear understanding of all requirements and constraints for a specific operation do I begin to dig into specific solution types (the trees) to support productivity improvements. 

In this particular case, you have to ask yourself: 

• Is the productivity enhancement that will be achieved by this order/SKU-specific technology approach sufficient to overcome the additional effort necessary to bring material into the system and then reintegrate completed order lines back into the main order flow? 
• Have you recognized the additional effort necessary to support automated process? 
• Have you considered how this additional effort will impact your new-found picking efficiencies?

The temptation to develop and execute point-specific technology-driven productivity enhancements is quite common. It’s easy to get sucked into the nuances of eking’ out every operational challenge and efficiency opportunity from a new technology application rather than spending time to understand the solution’s impact on the entire operation. 

This is a common reason why some technology-driven warehouse improvement initiatives struggle to achieve the overall productivity objectives expected by executive management.

For those of you who are ready to quickly implement changes that will drive productivity improvements, be careful what you wish for. Take the time to develop an in-depth, well-thought-out plan. Make sure to consider your point-specific technology applications within the context of your entire DC operation.

Points to ponder in your quest for productivity improvement:

• Get a clear picture of the forest – Make sure you have a clear understanding of the top-line DC operational performance. Evaluate all improvement options against the impact of the overall performance metrics for the operation.
• Work the processes from biggest to smallest – Look at the areas that require the most labor first. Sometimes the smallest improvements applied across the biggest area of labor can produce the best balance of investment and technology risk to productivity improvement.
• Look for common solutions first, and then consider specific solutions – Search for processes/technology solutions that can support the broadest range of order types and SKU mix. Technology-driven solutions can be expensive and risky when not properly planned. As a result, technology-driven solutions typically see the best payback when they’re applied across as much of the order volume as possible. Only after you have exhausted all the common options should you go down the path of order/SKU-specific technology-driven improvement initiatives.

-- Kevin

Tags: productivity, technology, distribution centers

Recently, I found myself looking over market research in an effort to assess the impact of the global financial crisis and subsequent business downturn on Supply Chain Management (SCM) Applications. 

Again, the survey responses seem inconsistent with the current business and economic realities. Looking forward, respondents ranked RFID, GTM and TMS most frequently as the applications that they have no current plans to deploy. It becomes even more curious when you consider that both RFID and GTM span a much smaller supply chain footprint than TMS. But how can this be? 

Tags: transportation management, software

As I was scrolling around the landscape of supply chain blogs and comment boards recently, I came across a question that really struck me as a sign of the times, especially for those of us who are caught up in the ultra fast moving world of information technology and supply chain software. 

The question – What are the leading transportation management software applications available on the market today? – while quite straightforward, left me somewhat confused. 

How can this question be answered without more context – international/domestic, modes, host environments, lanes, stops, etc.? You get the picture. Yet, there was no shortage of definitive answers (more than 35 and growing as I write this) to this “swing for fences” type of question.

Considering the growing interest in Transportation Management System (TMS) solutions over the last few years (as I mentioned in a previous blog post), it’s not surprising to see these kinds of questions and wide-ranging responses. 

The best way (or if you ask me, the only way) to answer this question and identify your best options for the right TMS solution is to approach the question from a broad to narrow perspective in the following stages:

1. Assessment – Consider your products, markets, suppliers and customers. What are the freight flows, supporting systems and enabling technologies? How is transportation effectiveness measured today?

2. Supply Chain Strategy & Organization – What are the most effective ways to organize transportation inbound/transfers/outbound? How are transportation decisions made (i.e., centralized, decentralized)?

3. Requirements Definition – How is transportation planned to support your strategy? How will the transportation requirements be impacted by future business changes and external factors, such as global supply disruptions or fuel price increases? Where will the relevant data reside, and what level of timeliness will be required?

4. Business Case Development – Where are the gaps in the current strategy? What is the magnitude of the opportunity to close the gaps? How much investment will be required, and what will it take to maintain the new system?

5. Evaluation & Selection – Who are the most qualified TMS providers to meet your requirements? What are the critical functional requirements and key evaluation criteria?

6. Configuration and Integration – What will it take to implement this new system? What are the critical risks and who will manage them (or how will they be managed) throughout the implementation? What are the critical responsibilities of my organization, the software vendor, and my trading partners?

Tags: transportation management, optimization, solutions

And due to consumer demand, they are coming into their own like a souped up Mr. Potato Head, adding and re-positioning any necessary parts. 

Functionality -TMS applications have become robust, offering additional modules that were only supported by niche players several years ago. For example, software for Global Trade Management and Financial Settlement were application markets several years ago, but can now be found in the more robust TMS offerings.

Deployment & Configuration Options – TMS providers have embraced software as a service (SaaS) deployment and service-oriented architecture (SOA) platforms, enabling much more cost-effective and functionally adaptable solutions than predecessor applications.

Upgrade Opportunities – Existing TMS customers faced with functional trade-offs or custom modifications and the resulting costly upgrades now have new options to consider. Many customers are turning traditional upgrade efforts into a competitive bid situation and evaluate the changes in the TMS market.  

Tags: transportation management systems, functionality, it systems

Tags: inventory, time and cost, budget, collaborative supply chain

By Kevin Hume 

Recently, I had the opportunity to interview a wide range of supply chain professionals engaged in the design, deployment and end use of Supply Chain Execution software (WMS/TMS/LMS).

I spoke with "in the trenches" practitioners who manage day-to-day operational challenges and execute the strategic mandates passed down from executive leadership.

I also spoke with industry analysts, third-party integrators and supply chain software executives. All this was done in an effort to compile a broad perspective of opinions relating to the emerging trends in Supply Chain Execution (SCE) software. My mission was to identify key emerging trends in the SCE software market over the next 3-5 years.

Considering the broad range of feature-function requirements in the SCE market, I received opinions across multiple perspectives (supplier, integrator and end user) and insight within different industries.

Despite the diverse group and backgrounds, a few issues consistently floated to the top of the list, irrespective of perspective or industry.

The most prevalent themes across all the discussions included:

Software as a Service (SaaS) offerings – This was easily the most common refrain from discussions with SCE software end users.

SCE practitioners’ view SaaS offerings as an emerging opportunity to provide the quickest speed to market at the lowest possible price point. Practitioners are clamoring to meet executives demand for cost effective solutions that can be quickly deployed with minimal investment in software applications and supporting hardware stacks.

Considering that a typical Best of Breed (BoB) WMS deployment runs 4-6 months at best from contract signing to go-live, there is an expectation that SaaS offerings will steadily grow feature-function capabilities and become catalysts to meet practitioners’ demands for quicker deployment timelines, flexible hosting options and lower Total Cost of Ownership (TCO).

From the SCE supplier side, a number of emerging SaaS applications have brought some innovative products into the market. As the next few years unfold, expect to see an increasingly robust SaaS feature-function set coming into the market.

Look for more details on the existing and emerging state of SaaS feature-functions in our upcoming blog posts.

Planning & Execution Integration – The rapid changes in the global economic climate over the last 18 months have highlighted the need for end-to-end visibility and the need for adaptability within the supply chain planning and execution processes.

The ability to provide planning capabilities that reach from the point of supply to the point of distribution have been a primary driver in the growing acceptance of SCM-ERP suites over the past few years.

The BoB players have also recognized this need and have been working hard through the integration of acquired products and core feature-function improvements matching the visibility and functionality of the SCM-ERP offerings.

It’s taken the BoB suppliers significant investment-development effort over the last several years to reach this point.

In the next few years, it should be revealed if the investment in end-to-end integration will pay off and which market’s organizational complexities will generate traction within the BoB view of Planning and Execution integration.

Look for further discussions related to the SCM-ERP versus the BoB model in upcoming blog posts. In fact, if you have a particular idea or question related to this topic, drop me a note and let’s discuss it.

Model Driven Functionality – Similar to SaaS offerings, Model Driven Functionality meets the dual requirements of "speed to market" at the lowest possible TCO.

The ability for SCE software to quickly adapt to emerging fulfillment demands within a zero modification environment continues to be a key desire for both current and future customers, as well as a critical path to capture increased market share for both BoB and ERP suppliers alike.

The Model Driven Configuration capabilities of the leading BoB and SCM-ERP offerings vary widely by supplier today.

The offerings that successfully ‘close the gap’ between robust functional configuration options within an intuitive, graphical tool set will become the industry leaders in the near future.

Now, take a step back and look at the three topics we just discussed – what are some of the external factors that really enhance the value of these emerging trends? My own thought process works something like this:

a) Current-emerging economic climate is driving a need for

b) robust, quick-to-market business requirement support; and

c) the limited access to capitol dictates lowest possible investment and TCO needed to support supply chain execution.

In a nutshell, I think these external factors are driving SaaS offerings, Planning-Execution Integration and Model Driven Capability to the top of the 3-5 year wish list.

Are these the topics that resonate with you and within your industry? Drop me a line! What do you think the emerging trends will be over the next 3-5 years within the supply chain execution market?

Kevin Hume

Tags:

Having spent the last 22 years working within the supply chain logistics arena and helping clients work through the strategy, selection and implementation aspects of supply chain software, I’m frequently asked:

"What do companies often do wrong when evaluating and selecting supply chain logistics technology software?"

This is an interesting question, because although it has been consistently asked over the years, the answer has changed, as both the software and underlying technology have matured.

Ten years ago, software selection required significant effort, looking into functional gap analysis, vertical market penetration, scalability, extensibility, etc.

The typical product offering was, for example, warehouse management with an alliance offering for transportation management or other supply chain execution systems – times have changed.

Don’t get me wrong. You still need to sweat the details in the traditional areas of software evaluation-selection.

However, software providers have done an admirable job of building best-practice driven, configurable products, significantly reducing the need to modify support for most warehouse operations.

As a result, you may find yourself at the end of gap analysis with little difference between competing software products.

In many cases today, an evaluation strategy that relies upon functional fit as a solution differentiator can result in a futile exercise of picking a specific gray cat in the dark.

Your evaluation-selection strategy must adapt to the maturity of the market and identify key criteria beyond the traditional gap analysis in order to shed more light and discover the real color behind those gray cats.

Two areas that will help differentiate offerings beyond functional fit include:

1. Clearly define the scope of the solution.

The footprint of the traditional Tier 1 WMS vendor has evolved far beyond the four walls of a distribution center over the last 10 years. The expanded reach/footprint of supply chain logistics technology providers now ranges from demand planning/forecasting from the enterprise side all the way down to last mile visibility to confirm a shipment at the customer’s doorstep.

As a result, the perceived value of a particular software offering can be dependent upon the perspective or background of the person/team providing input to the evaluation.

Thus, it’s critical to define and engage a steering committee that represents cross-functional leadership and make sure the steering committee has a clear understanding of the elements that drive the underlying business case for the software selection.

Also, be sure the team clearly defines the elements of each supplier’s product that are in play or out of play before you begin the evaluation process.

The rub here is to clearly define how much of a software vendor’s footprint you intend to leverage over the life of the software product. Most importantly, ensure the steering committee’s vision is consistent with that of the executives who will ultimately approve the investment and resources needed to implement this system.

2. Perform a cultural comparison.

Consider the cultural aspects of your organization and compare them to the traits of the software providers under consideration. In essence, find a DNA match between your organization and the software provider.

For example, does your organization have stable logistics business process requirements, or are they dynamically driven by customer service demands and/or the needs to grow the business? The answer to these questions will drive the magnitude of value behind aspects like functional fit and product adaptability or scalability.

Are the skill sets and staffing levels of your IT organization more characterized as a maintenance group, development staff, or both?

The answer to this question is critical to understanding your reliance upon the software supplier in the future if/when needs arise to support new business requirements. How will this be reflected in the comparison of projected total operating costs for each supplier?

Recognizing the underlying characteristics of your business processes and IT staffing-strategy is a key component to a successful supply chain logistics technology selection. Mismatches between the customer and software provider in these areas typically result in poor implementation performance, unfulfilled expectations of efficiencies, and ultimately higher than expected total operating costs.

Today, a successful evaluation-selection process requires:

• A clear, consistent view of the solution footprint and evaluation criteria;
• A diverse, multi-disciplinary team that is capable of evaluating the entire footprint; and
• Recognition and comparison of company and software provider cultures.

Focus effort in these areas and you will begin to shed some light on those gray cats, as well as improve your ability to differentiate the ‘real’ value proposition across competing supply chain software products!

Kevin Hume

Photo credit: Larry Page

Tags: culture