The Supply Chain Information Technology blog

It’s no secret that the recession was a test of endurance for most companies, and no area of the supply chain has gone untouched by the shifting economy. But what we want you to think about today is how this has greatly impacted your company’s Supply Chain Information Technology (SCIT).

As the economy continues to strengthen, it’s time to take a look at your SCIT to determine how to get back on track and move toward profitable growth. That is why we came up with the following list of Top 11 Priorities for SCIT in 2011. (Visit our website for the expanded article)

Priority #1 - Make some SCIT investments now. The halt in purchasing new systems or upgrades has generated a backlog that will cause bottlenecks in the future. Don’t wait until the masses make their decisions to invest.

Priority #2 - Decide whether to replace or upgrade. Deferment has been a common tactic for making a decision on replacing or upgrading a system. Now is the time to understand the status of your current system(s) and make an educated decision before the purchase.

Priority #3 - Get a handle on Software as a Service (SaaS) and the Cloud. As these services become more popular, consideration of SaaS and hosting will become the new normal for most SCIT initiatives. While this does not mean that on-premise will become passé, more companies will be making their first foray into the SaaS world or at least factoring Saas into their plans.

Priority #4 - Establish the ‘Next Step’ in Your WMS Strategy. Evaluate your current situation relative to your original selection objectives and develop a plan for the ‘Next Steps’ to drive further efficiencies. Conduct an operations and technology audit and identify the specific opportunities to leverage the benefits of the investments made to date.

Priority #5 - Find TMS solutions even more attractive. Transportation spend is a key source of supply chain cost, yet the majority of practitioners in a recent survey neither use TMS nor have plans in place to even consider TMS deployment. This is an area where you may be able to improve productivity and efficiency.

Priority #6 - Enable SCIT through product extensibility. When considering the right supply chain technology, include “suite vendors” in the mix, as there may be other applications that should be considered. Suite vendors have been known to offer attractive pricing options when multiple modules or products are purchased.

Priority #7 - Handle compliance mandates in an efficient manner. Regulatory compliance already plays a prominent SCIT role in publicly traded companies and certain industries. Effectively leveraging SCIT applications and resources will play a critical role in handling mandates in an efficient manner.

Priority #8 - Put data to work through supply chain intelligence. In today’s market, attempting to use spreadsheets to develop a sourcing model and calculate key factors is not practical, if feasible. Business Intelligence (BI) technology handles considerable data, resources and technology needed to comprehend these key sourcing factors.

Priority #9 - Contend with the talent gap. The competition to hire and retain key positions will be fierce. As one means to deal with the talent gap, companies can look at their core competencies and determine the best areas for outsourcing.

Priority # 10 - Keep a global perspective. As the business world becomes more and more global and security is quickly becoming a larger issue, companies are depending more on technology. At the same time, companies also have the option to take advantage of Global Trade Management (GTM), which is an area that sees a great deal of return in a short time-frame, in terms of IT investment.

Priority #11 - Close the open checkbook. SCIT projects have been fertile grounds for time and expense vendor contracts. Now is the time to establish stronger vendor-client relationships, and focus on the terms and specifics of the contract.

The list above shows how SCIT priorities will be developing throughout the year. However, this is a generalized list that may not be applicable among all companies and industries. With companies trying to improve bottom-line performance, these top 11 will only continue to become more vital. Let us know your thoughts on this list and what you are doing to cope with the challenges of 2011.

-- SCIT Perspectives Blog Team

 

Other Resources:

Top 11 Priorities for Supply Chain IT in 2011

Top 11 for Profitable Growth in 2011

Supply Chain Information Technology

 

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Tags: transportation management systems, profitable growth, upgrades

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

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As the business world becomes more and more global and security is quickly becoming a much larger issue than it has been in the past, we are seeing companies depending a lot more on technology.

This is part of the reason why the European Union (EU) is pushing paper-free trade to its member states.

In accordance with the Electronic Customs Decision, a new EU customs regulation, known as Import Control Systems (ICS), will require advance electronic notification of Imports into EU member states as of January 1, 2011.

For those of you who may not be familiar with this new regulation, the ICS is the first phase of the European Automated Import System (AIS).

The introduction of ICS allows information to be exchanged between the office of first entry into the EU and subsequent entry of firms in other member states. And this exchange of information happens before the goods enter the country by sea or air.

This new regulation follows the July 2009 Export Control Systems (ECS) legislation, which requires all documentation on all exports leaving EU member states - regardless of value, licensing or commodity - to be filed electronically.

With regard to the EU’s agenda for a paperless environment for customs and trade, the Electronic Customs Decision aims to establish the seamless exchange of data, which will, in turn:

• •    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
  

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Susan Evans is a first-time guest blogger on the SCIT Perspectives Blog. We appreciate her joining us today to give her expertise on the global side of TMSs. Susan is Managing Director, Tompkins International, EMEA. With more than 20 years of experience in transportation, logistics technology and global supply chain issues, Susan leads companies to achieve supply chain excellence. Her first-hand expertise in Europe and Africa stems from living and working in these regions for the past 14 years.

-- SCIT Blog Team

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Recently we were discussing Global Transportation Management Solutions (TMS) and deployment with one of Tompkins software vendor partners. During our conversation we began to talk about how many companies, shippers and Logistics Service Providers (LSPs) are truly running a global TMS solution.

We determined that there may not be as many as you think.

This piqued my interest to dig deeper and find out what people really consider to be a “global solution” in the area of transportation.

You hear the terms – “Global Trade Management,” “International Transportation,” “Transportation Management System” – but what really constitutes a global solution?

After some examination, I found a few interesting points as well as some contradictions that I would like to share with you today.

To begin, there are a number of Tier 1 and Tier 2 Transportation Management Systems on the market and some of these are able to support solutions in all regions – the Americas, Europe, Asia Pacific, Middle East and Africa. And while some solutions are more geared to North America, in Europe we find some are very country-specific (available only in French or only in German).

But what we are looking for here is the number of shippers and LSPs that are using these solutions on a global basis.

The reality is that some shippers standardize globally on a single TMS; however, each region’s business is very different, so the TMS has to manage domestic transportation on a regional basis.

Locally, different carriers are used and different business rules apply. At the same time, multiple currencies can be used with value-added tax (VAT) and cross-border issues in Europe, while North America is more homogenous.

Likewise, LSPs may standardize on a supply chain technology solution to manage their business, but others may have a list of TMS solutions that they prefer (some being legacy and others Tier 1 and Tier 2). In actuality, most are not deploying a single solution for a single shipper on a global basis. But, there are exceptions to this.

Some companies have embraced a single installation of a solution that allows central planning which is then executed locally. As a result, companies that have been able to achieve a single ERP solution on a single box, are more capable of achieving a single install of a TMS than companies that have embraced a core carrier program or working with a single LSP.

As I took a deeper look at this subject, I began to think more about the aspects of ocean and air transportation.

Often, companies that have an international transportation solution use a domestic TMS. And while a Tier 1 TMS can support ocean and air, more frequently, deployments are for road transport following an international move managed outside the TMS. Yet, some vendors provide integrated networks that allow GTM/international transportation to feed to domestic TMSs.

So, where are we now?

A global transportation management system has different meanings to different parties. But most often, companies are moving to a standardized, single solution or platform that deploys on a regional/divisional basis.

The exceptions include a few companies that are implementing a global Tier 1 solution on a single box offering in order to take advantage of centrally negotiated rates with a more centralized and coordinated approach.

I hope this helps you as you begin to think about standardizing your global TMS. For those of you who have already found yourself in the middle of this issue, let me know how “global” your TMS is.

-- Susan

 

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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?

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Tags: transportation management, optimization, solutions

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

 

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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

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