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?

In many of the companies I deal with, the Global Trade Management (GTM) function is placed in the hands of either a small, very qualified team or in the hands of a trusted trading partner: the freight forwarder.

These parties are typically highly qualified to deal in the labyrinth of global logistics. However, the placement and structure of these groups, their relationship to supply chain effectiveness, and the specialized technology tools with limited meaningful integration often don’t work in concert with the overall needs of right product, right place, right time, right cost.

For many firms, now is the right time to evaluate global trade capabilities and achieve a competitive edge. In some cases, upon evaluation, making use of existing capabilities with a re-engineered integration and visibility model is the correct path forward.

More frequently, when this evaluation is coupled with a review of current software solutions, a new platform for GTM is the more effective way to proceed.

Global trade management technology has come a long way in the last few years. Several stable and committed solution providers have delivered on a globally connected vision of the supply chain, offering robust applications that rein in control of the global supply chain and provide broad accessibility.

Their focus has been on meeting the demands of constantly evolving trade regulations while also maintaining a commitment to improving trade financial management and providing meaningful visibility.

Because many of the solutions have their roots in Software-as-a-Service (SaaS), their maturity in stabilizing a low cost of ownership and in handling broader systems integration needs is greater than most other areas of supply chain information technology.

Look for solutions that offer the following:

Export and Import Compliance

Export and Import Classification

Trade Document Generation

Lead Time Assessment and Reduction

Reduction in Duties Paid and Non-compliance

Landed Cost/Origin Management and What-if Assessment

Trade Finance

Supplier Collaboration

Robust Integration with Accounting, ERP and SCM systems

The barrier to deploying GTM solutions is being lowered every day, and the path that yields substantial results continues to become clearer. Read the latest paper from Tompkins (and co-authored by yours truly) on Global Trade Management Technology to explore this topic further, and, as always, I’m interested in your thoughts.

- Matt

Photo credit: Mishel Churkin

All right. We’re all a good way into the economic hiccup and gearing up for the recovery.

Budgets have been cut. Locating financing for new initiatives is like searching for the leprechaun at the end of the rainbow. Forecasts and actuals are way out of whack, and many of our plans have not reached what we’d expected a couple of years ago.

We’re seeing signs that we may soon be swamped with demands to achieve volumes and service levels that meet or exceed those that we were dealing with before the downturn.

As mentioned in the last post, there is no silver bullet for across-the-board, world-class, or best-in-class transformation. But, there are some well-understood steps that can make a major difference in preparing the organization to meet the demands of the recovery and achieving a market-dominating position, depending on your current situation.

There are moves that can be made today to demonstrate a clear, positive ROI, and you can build a business case that’s sure to gain the thumbs-up from the executive suite. What we want to explore here is what these look like based on where you are today.

First off, take a step back and look at the IT that’s currently in place and perform an assessment. What IT investments have you made that either satisfied your needs or wound up short of expectation? Are there improvements that can be made or additional components that can be added to bring more cohesiveness to you supply chain or a better basis for handling the rapid changes that are right around the corner?

Let’s begin the IT assessment by looking at two areas in the supply chain IT spectrum: (1) Supply Chain Management and Planning and (2) Global Trade Management and Supply Chain Visibility.

1. Supply Chain Planning and Management (SCP/SCM)

This is the area that most often sees the largest "bang-for-the-buck" in regards to IT investment. Key areas to address for your SCP/SCM business are:

• Manufacturing (either contract or in house) – Capabilities for managing order quantities and frequencies, lead times, and relationships with manufacturers based on market competitiveness
• Inventory – Determining the best levels and positioning, especially any that impact costs and handling processes in other areas of the organization
• Product Importance/Prioritization – Meeting service levels and the organization’s overall priorities

The implementation of solutions to address these issues very often falls at the lighter end of the scale when looking at the IT wallet, but it does require a good deal of organizational coordination and acceptance. Introduction of improved IT (or better configuration of existing supply chain technology) in the area of demand forecasting, sourcing and procurement, and distributed order management, often yields return on the investment in a major way.

For some, there is little investment required as the solutions may already be installed or available on your own shelf.

2. Global Trade Management (GTM) and Supply Chain Visibility

This is another area that sees a great deal of return in a short time-frame in terms of IT investment. A bit deeper coordination (internal and external) than the SCP/SCM elements is required, because it typically involves external trading partners and the broader segments of the supply chain network.

The positive here is that the focus is on linkage and visibility in meeting existing service goals can very often be the driving business case element, more so than establishing new goals for the entire organization. Key areas for assessment and improvement include:

• Supply Chain Visibility – Are you proactive or reactive in regards to disruptions?
• Other Systems – Are you linking your GTM system (either in-house or provided by freight forwarder) to other systems for better status updates on distribution labor and transportation resources?
• Performance Expectation – What steps do you need to take to ensure freight forwarders and other trading partners are performing as expected?
• Import and Export Management Functions – Are these functions siloed, or are they being communicated with meaningful updates to the rest or the organization?
• Cash Flow – Is the cash-out to cash-in cycle capable of being shortened by improving the ability to address adjustments and by increasing the visibility of progress to satisfy demand? (By the way, cash flow, of course, is a major motivating factor for adding more effective IT solutions to address these needs.)

Time to deploy, cost to deploy, and return on the investment for these two areas are receiving a lot of attention – and rightfully so. They are the areas that provide for the coordination to address the broad needs of supply chain flexibility and setting a new standard for speed-to-market and customer service levels.

These well-aligned supply chain IT updates set a new level of competitiveness and ability to take market share. All of this can be achieved with relatively little IT spend as compared with other major supply chain initiatives.

So, finding your leprechaun (in other words, finding financing for IT initiatives) may take a little more than luck; it takes a firm business case that’s built with a solid assessment.

But, feel free to hold your rabbit’s foot or horseshoe while you’re working on it.

We’re interested in knowing your thoughts. What are you doing to prepare for supply chain IT investments? And, what would you like to know more about in this area?

Ciao for now!

Matt

Photo credit: little_frank