Raj Marimuthu writes about efficient deployment of supply chain solutions being imperative to the seamless logistics planning of large enterprises.
Amongst the ever evolving complex global value chains, supply chain is both a strategic asset and a source of key competitive advantage. The intricately woven composite patterns of supply and demand, changing consumer demands and the recent trends of omni-channel retailing and same-day delivery promises make efficient logistics and transportation management systems an inevitable necessity. Some common challenges, that we have seen run across the complex business of logistics within large enterprises, are:
• The ability to do centralized planning of all logistics resources.
• Managing multimodal movements — for example, planning an ocean move while considering inland moves as well as communicating with carriers across multimodal movements.
• Improved analytics and integrating the results into proactive decision making — for example, alerts in advance on potential problems and to take corrective actions.
• Efficient management of longer term capacities, which are in alignment with anticipated demand.
• Global trade management and factoring the same in logistics planning for a lower total landed cost.
Technology adoption is crucial to not only address these challenges, but to also manage and grow the multifaceted function of logistics to a higher level of maturity. Here are some of the technology adoption trends that we are witnessing in the large enterprises segment:
Bridging the Gap between Planning and Execution: As organizations redraw their plans in line with the dynamic global marketplace, they realize the need to eliminate the gap between planning and execution. Through adoption of sophisticated supply chain solutions, companies are breaking the silos to make way for holistic planning; and the focus has been on: integrated solutions connecting transportation and warehousing that facilitate seamless planning and visibility across these domains; integrating fulfillment planning to transportation and warehousing up to the store level; and synchronizing transportation planning solutions to fleet management. In this scenario, it becomes imperative to extend and link the actual execution real-time status updates, that can be made available through track and trace systems, to the transportation planning solutions for an all-inclusive visibility.
Tactical Capacity Management: It is becoming more common to see large enterprises keen on planning for a time horizon of up to one to two years. Solutions that assist with this tactical capacity management need would become increasingly important, as these would aid companies to incorporate their future outlook of demand and costs, in order to predict logistics requirements (e.g., freight forecasting); and to also make furthermore critical logistics decisions like required asset mix, dedicated fleet versus spot fleet mix, and warehousing investments.
Visibility through Mobility: In most geographical markets where the logistics maturity level is high, visibility solutions are prevalent. In other developing markets, companies have begun to invest in visibility solutions as a first step towards capturing the much desired integrated view. Extending beyond these track and trace solutions are the mobility solutions – the ones that enable faster real-time decision making across transportation and warehousing – for instance, getting real-time information from Logistics Service Providers (LSPs) on their transport schedules, confirmation on their fleet, driver availability, etc. Mobility solutions have been used extensively in the warehousing domain; and now, its usage and adoption is likely to spread faster to its other associated areas.
Analytics and Performance Management: We also see greater emphasis on analytics and performance management solutions, which enable companies to keep better track of prominent trends in their logistics operations – for example, performance scorecards on carriers’ KPIs, , etc. Focus will be on solutions that enable: Control room models featuring all relevant scorecards/dashboards for tactical and operational decision making. The other solution that would garner much attention is the ones that allow prompt simulations/enablement of strategies, as a quick response to analytics data and performance metrics. For example, if on-time performance of LSP is unsatisfactory for two weeks then deprioritize loads to that LSP. One of the key trends that is heading north and is here to stay is the adoption of sustainability index that captures their efforts and outcome of their carbon footprint reduction program.
Bridging the Gap between Shippers and LSPs: Technology has equipped shippers and LSPs to exchange data, viz., shipment status, enabling workflows like invoicing and settlement, etc. We see a trend emerging where this will move few notches up, with renewed thrust on collaborative solutions, enabling a strategic relationship between shipper and LSPs. This can take different forms, some of which can be: solutions that facilitate enhanced visibility and more collaborative transportation planning and optimization; solutions that enable a consortium of shippers to evolve a collaborative planning process with a strategic LSP. Sooner, than later, we also expect to see renewed focus on creating cloud based, fee based solutions that connect multiple shippers and multiple LSPs – benefits would include shippers getting the best rates, LSPs planning for more efficient asset and backhaul utilization, etc.
Better Transportation Planning and Optimization: The continued focus in this area will be on solutions and models, which promote global integrated transportation planning: across multiple geographies, across inbound and outbound supply chains for better asset utilization, multimodal logistics across multiple distribution channels and trade management stipulations and constraints. Industry vertical-specific standards, governance and regulations compliance would increasingly become an important component of these technology solutions.
Adoption: Not all anticipated and emerging trends will be embraced by companies in equal measure globally. A lot would depend on the state of logistics maturity in their zones of operation. The following table lists the common and varying trends that are likely to be adopted in the emerging and the developed geographies.
|Emerging Markets where
State of Logistics Maturity: Average
|1. Visibility Solutions.2. Basic TMS and WMS solution.3. Basic Analytics Solution.4. Evaluating Cloud Based Solutions.|
|Developed Markets where
State of Logistics Maturity: Good
|1. Integrated TMS-WMS-Fulfillment Solutions.2. Global Transportation Solutions.3. Evaluating Tactical Capacity Management.
4. Evaluating Strategic Collaboration with LSPs.
5. Analytics and Performance Management.
6. Evaluating Cloud Based Solutions.
The trending of this technology adoption will define the emerging shape and picture of things to come in the logistics space.
(The author is Group Vice President – Services, JDA Software India.)