A few weeks ago, I wrote an article on the benefits of time slot management. In that article, I highlighted the importance of the network effect on time slot management and related technologies, as well as the main benefits of a time slot management application. Time slot management helps to organize warehouse resources to prepare for an incoming truck. The warehouse needs to know who is coming and when, which begins with the estimated time of arrival. Beyond that, warehouse workers need updates on what dock the truck is arriving, when the truck is loaded, what papers they will pick up, what needs to be signed, and when they are leaving the warehouse or yard. While time slot management applications work as a stand-alone application, it is more valuable when it is integrated into with other applications on a common platform such as warehouse- and yard management or visibility solutions.

Here is a look at some more key findings from the survey completed with Transporeon, as well as my interview with Transporeon CEO Stephan Sieber.

Wait Times and Costs Can Add Up Quickly

As part of this research, we surveyed 106 individuals across a variety of industries and countries. When looking at time slot management, it is important to know how long a company’s drivers or carrier’s drivers are waiting per appointment from check-in to the beginning of loading or unloading the truck. The majority of survey respondents indicated the average wait time is less than 60 minutes, followed by wait times between 60 and 90 minutes. The average wait time for all respondents was about 70 minutes.

As Stephan Sieber pointed out in his interview, in Europe, 50 percent of carriers spend 3 or more hours of waiting per week and 20 percent spend 5 or more hours waiting. This all adds up over time, and there are costs associated with these wait times.

The question then needs to be asked, what is causing delays and increased wait times? The most common cause for wait times at warehouses as reported by survey respondents is peaks and troughs of arriving. For many warehouses and distribution centers, a lack of visibility into which trucks are coming and when can lead to congestion. This congestion can be exacerbated by trucks that are running late or early and arriving at unexpected times.

The second most common cause for wait times is a lack of predictability and planning. As warehouses and yards cannot predict when a truck will arrive, they are unable to streamline the process. Traffic jams and road construction, which are another leading cause for wait times can be minimized with proper planning and real-time ETAs.

Whether it is due to traffic jams, missed appointments, or a variety of other reasons, loadings and unloadings will need to be rescheduled on any given day. For all respondents, about 11 percent of loadings or unloadings will need to be rescheduled throughout the day. Those numbers can add up quickly and add to the backlog at the yard, especially if there are restrictions on the trucks and trailers that need to be rescheduled.

On a similar note, understanding the difference between industries is important. For example, retail has very specific needs depending on the products and the time for a slot to unload or load, while chemical companies have constraints such as what materials drivers can carry, what materials can be loaded or unloaded near other materials, and other regulations around the equipment that is used.

The Network Effect, Sustainability, and Automation

The network effect is at the heart of supply chain transformation, especially when dealing with change. As sustainability continues to be a hot topic around global supply chains, the network effect plays a role. Sustainability is a byproduct of the network effect, as load consolidation and route optimization mean less trucks on the road to deliver the same freight. This is important for reducing carbon emissions. Within that context, a time slot management application can promote sustainability, as less idle time in the yard or at the warehouse means lower emissions. While this may not seem like much on a per-truck basis, it adds up over time. Improved dock scheduling makes for quicker stopovers, reducing the time on the road, further reducing emissions.

Time slot management needs to be part of the larger supply chain network, which includes transportation execution, procurement, and real-time data for enhanced visibility. This is where the true power of time slot management exists. By using real-time data for tracking of assets on the move, warehouses can be better prepared for arriving trucks. Depending on congestion or whether a truck is going to be early or late, dock assignments can be adjusted based on the new ETA.

However, these updates will only prove beneficial to warehouses and drivers if the updates are made automatically. According to the survey, nearly two-thirds of respondents handle rescheduling completely manually. While close to a third of respondents reschedule appointments manually but with the use of rebooking recommendations, less than 6 percent of respondents handle rescheduling automatically. This is certainly a technology gap that needs to be addressed to improve efficiencies.

When these changes happen, companies need to be proactive. Technology can help to play a big role in this process. However, too many companies do not have adequate technology in place and have to rely on manual processes to make updates.

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Already upended for two years by the COVID-19 pandemic, the worldwide logistics industry is facing new challenges.

With gasoline prices reaching record highs, transportation managers must make smarter decisions that minimize road miles and associated costs. While demand is high, ongoing product shortages continue to cause supply chain disruptions, create unpredictable shopping behaviors and drive rapid delivery expectations. The industry’s well-documented labor shortages are not ending anytime soon. The energy crisis in China and the European conflict are bringing additional chaos in the form of production shutdowns, raw material shortages and blocked shipping lanes.

If there’s a bright spot anywhere it’s the fact that, as logistics challenges have grown, so has the availability of advanced technologies to manage these challenges. Artificial intelligence (AI), machine learning (ML), predictive analytics and robotics once seemed incredibly sophisticated and out of reach — but today they’re easily accessible to every company. Both anecdotal evidence and research studies demonstrate that enterprises leveraging these advanced capabilities have fared much better than other companies during the extreme volatility of the past two years. And it’s safe to assume that logistics digitization will continue to deliver a significant competitive edge as supply chain complexity and uncertainty grow.

For logistics teams seeking to manage volatility and deliver more predictable, profitable results, five advanced technologies should be in their toolkits: digital control towers, warehouse task automation, warehouse robotics, dynamic price discovery and digital freight bidding. Organizations that aren’t actively investing in these capabilities, which are described in greater detail in this article, are already falling behind — and they risk losing even more ground as business conditions become more and more difficult.

Digital Control Towers

Digital control towers sit at the heart of the supply chain ecosystem, gathering real-time data on current conditions. They enable logistics teams to identify disruptive events such as transportation roadblocks, missed incoming deliveries, asset downtime and labor shortages. They make it easy to share this information both internally and externally, so the end-to-end supply chain can immediately respond in a synchronized manner.

For logistics teams, digital control towers add maximum value when they’re integrated with the transportation management system (TMS). This allows all transportation resources to be leveraged in creating a response, including the extended carrier network. It also enables the control tower, enabled by AI and ML, to apply predictive analytics, run scenarios and make recommendations that are automatically and seamlessly executed by the TMS. This combination is helping the world’s leading logistics providers move closer to operating an autonomous, self-correcting supply chain that pivots at the speed of change.

As logistics organizations dynamically plan and re-plan carrier selection, distribution networks, delivery routes and frequencies, loads and capacities in real time as conditions change, the benefits can be enormous. In a study commissioned by Blue Yonder, it is estimated that a typical $10 billion company can save $14.1 million in transportation savings  over a three-year period by leveraging a TMS.

According to executives who have benefited from this combination of advanced technologies, one of the greatest benefits is gaining real-time visibility across the extended logistics network. “We wanted to see inventory positions around the world compared to our forecast, compared to our actual demand. We wanted to see what things are in transit as well as identifying where there are delays and whether they would cause stock outages,” said the director of supply chain for a health technology business who was quoted in the report.

Warehouse Task Automation

Another advanced technology that’s becoming imperative is warehouse task automation. The study predicts that a $10 billon company can realize over $31.2 million in cost savings over three years by improving warehouse scheduling and processes, as well as reducing labor requirements via enhanced productivity.

Since a single warehouse worker represents $50,000 in annual costs — and talent is extremely scarce — it makes sense to optimize the accuracy and efficiency of every task. Digital warehouse tasking solutions rely on ML to continuously identify opportunities for efficiency and cost savings, then unlock them to optimize daily operations in real time.

In today’s volatile marketplace, it can be nearly impossible to meet customers’ expectations for service and delivery while still protecting profit margins. Keeping up with demand changes means constantly adjusting staffing levels, inventory positions, equipment placement, employee-specific task lists and priorities, and other warehouse parameters. Delivered in a software-as-a-service (SaaS) model, warehouse tasking solutions gather real-time, 24/7 operations data, flag issues and generate an autonomous response. As conditions evolve, so do labor schedules and priorities, driving a fluid, responsive and profitable warehouse environment. Warehouse operations are tied to a probabilistic demand forecast, but able to react to changes quickly and automatically.

Warehouse Robotics

According to another recent study, the worldwide market for warehouse robotics will increase from $4.4 billion in 2020 to $15.79 billion by 2030 — an annual growth rate of 13.2%. A similar report predicts that, by 2026, 75% of large companies will use some form of smart robotics technology in their warehouses.

Given ongoing labor shortages, as well as the health risks and physical vulnerabilities of human workers that were emphasized during the COVID-19 pandemic, warehouse robotics make good business sense. By leveraging robots to pick items, move pallets, deliver goods and complete other tasks, companies can increase speed, accuracy, efficiency and reliability — while significantly reducing labor expenses. Today’s robots incorporate new levels of intelligence, agility, guidance and environmental awareness, which means they can execute a range of warehouse tasks with little to no human intervention. As demand ebbs and flows, they can easily be scaled to match execution requirements.

In identifying a warehouse robotics solution, a key consideration is the amount of time and effort required to onboard the new technology, integrate it with the warehouse management system (WMS) and begin earning a return on investment. DHL Supply Chain is implementing robotics at 2,000 operational sites around the world. By using a new robotics platform it developed with Blue Yonder and Microsoft, DHL can quickly connect robotics with an existing WMS. The new platform quickly reduced robotics integration time by 60%, and DHL is targeting a 90% reduction as the platform is rolled out globally.

Dynamic Price Discovery

As extreme demand shifts continue, transportation planners are spending enormous amounts of time and effort to ensure that carriers have the right capacity, at the right price, on extremely short notice. A dynamic price discovery solution addresses this challenge by providing on-demand access to real-time market rates.

Dynamic price discovery solutions act as a single point of integration for shippers and their partners, replacing tedious manual processes with single-click speed and accuracy. Transportation planners can dynamically access the best freight rates across both contracted and non-contracted carriers, enabling them to procure additional capacity during peak demand periods. By seeing real-time prices — which reflect current demand-and-supply effects — they can make better informed, more profitable tendering decisions.

Executives interviewed in the study mentioned above confirmed that dynamic price discovery capabilities have contributed to a more strategic use of carriers and a significant transportation cost savings. “[Dynamic price discovery] has allowed us to significantly increase our use of primary carriers while reducing our spot market use,” said the director of a manufacturing and supply chain systems for a food service products company. “Our primary carriers are now at 90%, up from 75%, while our spot market use has gone from around 2.5% to less and 0.5%. With spot market rates frequently 2 to 3 times our primary carrier rates, this change has been huge for us.”

Digital Freight Bidding

In today’s fast-moving logistics landscape, freight bidding is a powerful tool for balancing service with cost control. However, the process of managing bidding engagements, receiving carrier proposals, optimizing bids, facilitating awards and managing contracts via manual methods is time- and cost-intensive. It slows responsiveness and drains scarce labor resources.

Leveraging a digital freight bidding solution, delivered via a SaaS model, automates and accelerates this process. By connecting a logistics team with its entire carrier network in near real time, digital freight bidding solutions provides one unified platform for this process, configured to optimize collaboration and communication. Incumbent carriers can easily be renewed, while back-up carriers can also be specified.

Digital freight bidding solutions enable logistics teams to quickly define rules and constraints, invite carriers to participate and achieve maximum cost savings in mere minutes via a robust bid optimization engine. By also considering carrier performance metrics, the decision engine can intelligently balance cost with service. By leveraging digital freight bidding capabilities, companies have reduced their truckload costs by up to 12%, with value realization within 12 weeks enabled by a SaaS hosting model.

The Stakes Are High — But So Is the Return

Chaotic supply chain conditions have impacted every business function, but logistics

teams have been hit especially hard. Because warehousing and transportation represent significant cost centers, logistics organizations are under special scrutiny — pressured daily to make intelligent, profitable decisions on the fly.

The five advanced technologies outlined here can help, by making frameworks as seamless as possible, increasing collaboration across organizations, and enabling both inbound and outbound visibility and control. Forward-looking logistics organizations are already earning a high return on their investment in these solutions as they identify upstream and downstream changes, analyze possible actions and execute a synchronized response that automatically balances costs with service outcomes. As global disruption continues, digitization is the way to win in this high-stakes environment.

Terence Leung is Senior Director, Solutions Marketing at Blue Yonder. He has a keen interest in digitalization and the value it generates throughout the supply chain. In this role, he leads his organization to drive thought leadership and go-to-market strategy for supply chain execution and logistics solutions. In addition, he works with customers to understand requirements and drive best practices in the digital journey.

Prior to joining Blue Yonder, Terence was the leader in product marketing and value engineering at One Network. Previously, he was in leadership positions in industry management at Savi Technology and solutions and management consulting at i2 and Deloitte Consulting, respectively. Terence holds an MBA from the University of Texas, Austin and an Electrical Engineering degree from MIT.

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Manhattan Associates hosted its annual user conference, Manhattan Momentum, in Hollywood, Florida from May 23^rd through today, May 25. “Assemble Agents of Change” was the theme of the conference. And it was good to assemble in person again after two years of virtual conferences due to COVID-19 restrictions. The topic of change is certainly as relevant as ever. Of course, change is always occurring. But it has certainly been more pronounced recently within the supply chain world. This is evident from the widespread global supply chain disruptions that we all read about daily. Eddie Capel, Manhattan’s president and CEO, kicked off the conference with the goal of “making the impossible – possible.”  He then introduced Sanjiv Siotia, Manhattan’s CTO, to discuss the Manhattan Active Platform, the technology that makes everything else in Manhattan’s vision possible.

New Manhattan Active Business Capabilities

Brian Kinsella then discussed how Manhattan Active solutions are made up of assembled microservices, and how they are putting microservices together to form solution unifications that deliver additional features and capabilities for customers, and how these unified solutions are further combined to deliver even broader capabilities.  Brian provided some specific omni-channel examples with easy to envision benefits. The ability for a consumer to buy an item online, then come into the store and add to that transaction or to exchange the online purchase at the store. These multi-step omni-channel transactions appear simple to the consumer but are typically constrained in practice by retailer technology silos – constraints that are removed when these processes are unified. Most importantly, these are capabilities that can improve upon customer experiences.

The Manhattan Active WM roadmap includes the next evolution of order streaming, applying those dynamic direct-to-consumer principles to retail replenishment and B-to-B fulfillment environments. In these environments, order streaming works backwards from an optimized load plan to determine the most effective way to sequence and prioritize the warehouse work and get it to the dock to execute that shipment. Also on the roadmap is the next evolution of yard management. They are taking data from WMS and using it more effectively for the yard. For example, when it is time to pull in the next trailer, they can see what is on it and where those items are going to be put away in the warehouse, and choose a plan that will minimize travel distance. In addition, Manhattan Associates is developing a dynamic load building service that optimizes a plan that accounts for factors such as weight balancing and shelving units within trailers. And the system will sequence the warehouse work to arrive at the dock in a way that facilitates the loading of the trailer in the desired sequence.

Manhattan Active WM in Action

A Manhattan Active WM break out session revealed that there are currently 21 clients live across 39 sites. The session included executives from two existing Active WM clients, Dan Jennings from RNDC and Jerry Troupe from Pet Supplies Plus. Dan stated that the continuous updates that come with Active WM was a strong selling point for adopting the solution. With 40 facilities, the traditional upgrade process was considered a substantial expense and burden that could be minimized through a solution with a more streamlined, continuous update process that also provides more timely enhancements. Pet Supplies Plus was the first customer adoption of Active WM, and decided on the solution in part due to its ability to scale along with Pet Supplies Plus anticipated growth. Pet Supplies Plus went live in a like-for-like conversion scenario from an older version in a little over 5 months and is currently rolling out some of the systems newer innovations, including the labor management employee engagement capabilities, including an employee incentive points program that rewards productivity.

Final Word

I attended additional sessions that described recently completed enhancements and customer adoption metrics for Manhattan Active WM. Most notably, the solution is adopted across 21 end-user industries – indicating its widespread applicability to fulfillment needs.

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Oracle Fursion Cloud Transportation Management offers a solution that allows transportation planners to see estimated emissions – carbon dioxide, nitrous oxides, and particulate matter – before a trip is executed. Transportation is, of course, a major source of green house emissions. According to the environmental protection agency, in the US, the transportation sector accounts for 29% of all greenhouse gas emissions. That is more than any other sector.

A transportation management system (TMS) allows a shipper or carrier to plan the most cost-effective set of shipments that meets service level goals. A TMS can be a great way to save money while lowering costs. Running more efficient routes, with more fully loaded trucks, saves money and reduces emissions. The desire to improve service, reduce cost, and reduce emissions, is part of the reason their customer Unilever selected their solution. Unilever is one of the world’s largest food manufacturers.

But can TMS solutions do even better? Now, Oracle Transportation Management (OTM) allows cost and sustainability to be traded off. Oracle’s TMS has built in analytics to make these estimates. Currently, the estimates are only for truckload shipments. But the product roadmap has them adding this functionality for other transportation modes in the future.

Estimates of emissions are made based on the estimated fuel consumption for a trip. The emissions per gallon of diesel is than used to calculate the emissions. Calculating estimated fuel use is based on estimated miles in a trip, the weight of the load, and the type of equipment. Derek Gittoes, a vice president of supply chain management product strategy at Oracle, said “this is very much an estimate. Much additional detail needs to go into the model for more precise estimates.”

For example, Oracle is using average emission from a 5-ton truck, or a bulk tanker. Ultimately, where they hope to get to, is to understand that if a 2019 Freightliner Cascadia model semi, using 2021 Michelin X Line Energy Z tires, that is on a 1,000 mile route taking them over the Rocky Mountains, and that truck will spend 46 minutes idling on average, then that truck will generate X amount of emissions.

Rich Kroes – Oracle’s vice president of global sustainability – was also on the call.  Oracle has set a target to achieve net zero emissions by 2050, and to halve their greenhouse gas emissions across their value chain by 2030. Mr. Kroes said that across their supply chain there are times when it can be impractical to get to an exact GHG number. For example, if they buy a component for their hardware products in Thailand, they have an estimate for the logistics emissions associated with the component. But Oracle may not know whether there were delays causing a product to be shipped to them by air rather than by ocean or in a container that is not 100% full. “We don’t want perfection to be the enemy of the good. Estimates that are directionally correct can still help us to make the progress we need.”

But for companies that do want more precision, Oracle’s consulting organization, and TMS consulting and implementation partners like Inspirage, can configure extensions on top of OTM to provide more refined estimates.

Emissions Estimates Can Improve Over Time

Advanced transportation management solutions are already closed loop systems. The TMS estimates the cost of a trip inclusive of a carrier’s rate for the lane along with estimated accessorial and fuel surcharges. When the invoice from the carrier comes in, the TMS’s freight audit module can see whether the expected cost of the trip matches, or comes close to matching, what was expected.

If a carrier is willing to share the gallons of diesel information consumed on a trip with their shipper clients, then the same kind of closed loop predictions and corrections around sustainability can be made. Many shippers are now using transportation visibility solutions – like those from FourKites – that can monitor a carriers telematics data and generate post trip GHG emissions based on the actual fuel consumed. Oracle customers can buy a solution from FourKites that is preintegrated to OTM. That means, over time, the TMS could get better at predicting emissions on a particular route.

Transportation Modeling Can be Used to Reduce Emissions

Oracle also offers a logistics modeling tool to look at how different policies would affect sustainability. This tool can also be used to estimate transportation emissions in advance of any shipments. A company, for example, could model the operational impact of shifting the lead time for deliveries to customers from 4 days to 6 days.  In the same dashboard that shows how much money would be saved from this new policy, analysts can also view the carbon impacts. Again, this is not a precise estimate, but it would allow companies to make better decisions on what kinds of policies to implement.

Mr. Kroes, however, believes that while companies should commit to aggressive sustainability goals, “organizations cannot compromise the service levels their customers have come to expect.” If consumers are demanding next day deliveries, shippers need to meet those requirements while finding other ways – for example, the use of electric vans – to improve their sustainability performance.

Carbon Taxes, SEC Sustainability Reporting, and “Greenwashing”

Carbon taxes are also something that a TMS must deal with. In British Columbia there is a carbon tax that applies to the miles driven in that province. Some of Oracle’s customers need to be able to calculate the miles driven in the province, so that they can adhere to the regulatory requirements.

For companies that are committed to reducing their Scope 1 emissions from their own trucks or Scope 3 emissions from trucks used by their common carriers while carrying the shipper’s goods,  the issue of carbon taxes is also important. Intel is an example of a company that has committed itself to be carbon neutral by 2040. To encourage internal operations to make the right decisions that will drive sustainability, operations must calculate a carbon tax before selecting a solution or service. Their internal carbon tax will raise over time. An internal carbon tax is, in a sense, a fictional number; the company does not really have to pay this tax. The tax is there to drive the right kind of sustainability decisions. A TMS will need to do double accounting to deal with this. This is what the trip costs inclusive of the internal carbon tax, but this is the lower price that was actually paid for the trip.

Finally, in the US, the Security and Exchange Commission will require publicly listed companies to submit sustainability reports, in addition to their Annual Reports, by 2023. These reports will follow international reporting standards, making it more difficult for companies to engage in “greenwashing” – making grand claims of progress in this area that cannot be backed up. This will provide an added incentive for using a TMS that can estimate emissions. Other nations, like the UK, have similar regulations planned.

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ARC has recently completed a study on the transportation management system integration market. We have previously done a study of transportation management system (TMS) market and transportation execution and visibility system markets, and interviewed TMS vendors. Finally, we have surveyed and interviewed TMS customers. Interviewing the system integrators (SIs), that implement the different types of transportation software solutions, allowed us to complete our 360-degree review of freight transportation software technologies.

The system integrators that serve this market were more knowledgeable, or perhaps more upfront, about the costs of implementing a transportation solution and the time it would take, than vendors or users.

The costs of an implementation depend on the integrator’s fees, how long the implementation takes, and the number of consultants involved.

System Integration Fees

The fee structure is different depending on whether the software vendor or a system integrator implements the solution. It also depends on whether the system integrator is a global SI with billions in revenues and a wide ranging and extensive consulting practice, or a boutique consultant that is much smaller and more narrowly focused on transportation and related supply chain execution software.

Software vendors and the global consulting firms have the highest fees. Hal Feuchtwanger, the senior director of transportation at 4SIGHT Supply Chain Group, reports that the big TMS vendors charge $250 an hour.

The cost for a boutique consultant, according to Davison Shopmeyer, an executive managing partner at enVista can go as $200 or even higher. More commonly a boutique’s fees would be in the mid-100s. The cost a boutique charges depends a lot on their consultants. Some boutiques have consultants that used to work doing implementations or in product development for leading TMS vendors. These boutiques can charge a higher rate and often avoid the need to discount to win a deal.

Global system integrators can charge even higher. According to Joel Garcia, the senior vice president of supply chain at Spinnaker SCA, global SIs can charge as much as $300 an hour despite having several consultants on the project offshore, usually in India, and being paid a much lower salary than in the US or Europe.

In some cases, a global SI or a TMS vendor does not have enough resources, and they turn around and subcontract part of the work to an SI. When an SI is hired as a subcontractor, they are typically paid half, or less, than the rate the vendor is getting, according to Mr. Feuchtwanger of 4SIGHT.

But companies with an offshore presence may find the subcontractor fee perfectly acceptable. Business Transformation Consulting (BTC) is a company headquartered in Mexico City with a Blue Yonder TMS implementation practice. They have several consultants that have received certifications from Blue Yonder for successfully completing their Blue Yonder TMS implementation training. Mexico, of course, has lower salaries than the US or Western Europe. But, Blas Trevino, a partner at Business Transformation Consulting is quick to point out that they take the lead on their own TMS implementations. Further, you should be careful about assuming offshore means less talented. BTC has a transportation network design practice that is based on the Blue Yonder solution. Network design requires a talented team.

How Long Does an Implementation Take?

A fully integrated TMS, with moderate complexity, will take about 4-5 months according to Mr. Shopmeyer. According to Amit Nagar, the practice leader for transportation & logistics at HCL, cloud solutions can go in faster, as quickly as 3 to 6 months. But on-premise implementations, or implementations involving a complex migration from a legacy application, can take upwards of 9-12 months.

Other consultants do not believe cloud implementations are any faster. Frank Camean, the chief executive officer at 4SIGHT Supply Chain Group, says that “Our belief, generally is that public cloud versus private cloud versus on premise has less overall bearing on total TMS implementation time than does the size and complexity of the client network being enabled, and of the simplicity versus the sophistication of the planned deployment.”

How Many Consultants are Involved?

According to enVista, there are typically 3 full time equivalent (FTE) resources from the SI. There is a director who is leading the design and management of the project.  This leader is full or part time depending on the phase of the project.  Then, there is also one developer and one architect that works full time throughout the project.  If there is a heavy integration or modeling lift, another part time specialist will come on to support that area, which typically consists of about 40 hours of work spread across 2-3 weeks.

Brad Forrester, the CEO at JBF Consulting, agrees there are typically 3 FTEs that will put in a total of about 5 to 6 thousand hours. These consultants will be supported by FTEs from the client. “In a typical implementation there will be 3 client FTE that will spend devote about 6,000 hours to a complex implementation. They will be supported by approximately 10 part-time SMEs who will invest another 4000 or so hours in the project.

That seems like a lot of consulting hours between SI and the client. But compared to a WMS implementation, it is a piece of cake. Many of the SIs in this market also have WMS practices. And the WMS practices are typically at least twice as large as the TMS practice.

Chris Riemann, the managing director supply chain & network optimization at Deloitte, reports that they did both warehouse management and transportation management implementations for one of the biggest retailers in the world. There were twice as many consulting hours surrounding warehouse management system (WMS). “The WMS required 15-20 integrations. The TMS a lot fewer.”

Do Agile Implementations Accelerate the Implementations?

Agile is characterized by rapid learning and decision-making cycles. Agile’s genesis was in software product development where code was developed in quicker cycles and shared more frequently with users to make sure development was proceeding on the right track, in a way that would drive value for the users. Today, virtually all SIs report that they employ an agile implementation methodology and that this project methodology can speed the implementation of enterprise software while helping to ensure the customers get the solution they want.

The traditional implementation methodology is a more sequential process known as waterfall. Mr. Garcia of Spinnaker argues that while every SI touts agile, an implementation can have many dependencies that will drive large pieces of the implementation to rely on the traditional waterfall methodology. In practice, almost all implementations are hybrid involving some agile and some waterfall. In a request for proposal to a consulting firm, the shipper should ask what portions of the implementation will be agile and which will be waterfall. And when a detailed project methodology is displayed, shippers need to realize that the implementation methodology probably can’t be followed exactly as laid out.

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Today’s logistics teams are operating in an environment characterized by uncertainty on three fronts. Customers’ needs and expectations are constantly changing. The available talent pool of drivers, warehouse associates and other employees is small, which creates staffing volatility. And their operating conditions are extremely challenging and unpredictable, from skyrocketing fuel costs and tariffs to blocked shipping lanes and ongoing geo-political conflict.

Minute by minute, logistics providers are asking themselves: What do customers want? Do I have the resources to meet their needs? And can I do so profitably and sustainably?

The extreme volatility of the last two years, which continues today, has starkly demonstrated the need for logistics professionals to monitor real-time conditions across the extended end-to-end value chain, recognize and broadly communicate any changes, and respond immediately in a synchronized, orchestrated manner. The bad news is that older technology solutions and outdated workflows, based on manual handoffs and organizational siloes, no longer support the necessary level of speed and collaboration required by the current environment.

There is good news, however. A new generation of advanced solutions, enabled by artificial intelligence (AI) and machine learning (ML) – has created new supply chain models and new work processes that are purpose-built for today’s extreme uncertainty. These intelligent, strategy-driven solutions help the entire end-to-end value chain enact a fast, coordinated response not only across functions but also across multiple trading partners.

These advanced solutions support real-time monitoring and the ingestion of incredible volumes of real-time supply chain data, which allows logistics teams and other stakeholders to see disruptions at the earliest possible opportunity. Just as important, they connect the end-to-end value chain digitally, so all partners can participate in a shared response. Supported by best-in-class optimization engines that exceed human cognition, they consider every possible response to the disruption, weigh trade-offs and multiple priorities, and — often autonomously — execute the right strategic response across warehouses, fleets and other logistics assets.

Real-time, end-to-end connectivity is the key to truly mitigating disruptions and ensuring that the response is both strategic and profitable. It creates visibility, transparency and accountability across functions and trading partners. The logistics team is not left to struggle alone to mitigate disruptions, but instead acts as part of a unified effort to achieve the best possible service and cost outcome for all trading partners.

This might sound too good to be true, especially to companies still using outdated tools and manual processes. And it’s a far cry from the panicked, on-the fly decisions many logistics professionals were making in 2020 and 2021 — which, unfortunately, were not always profitable. But I can assure you that every day the world’s leading logistics teams are relying on advanced AI- and ML-enabled solutions to maximize both service levels and profit margins, even in the face of the most extreme volatility.

I’ve seen firsthand the very different levels of success companies have achieved over the last two years, which is largely based on the ability of their technology solutions and work processes to combat extreme uncertainty in market demand, available resources and external conditions.

Cases in Point: The Real-World Value of Digitalization

A North America​n retail customer operates over 1000 stores as well as multiple distribution centers (DCs) in the US. The retail customer completes close to 100,000 store deliveries per year, working with both an import and domestic vendor base. According to its Director of Logistics, the company digitized its freight order management system, creating two-way integration with its existing digital transportation management system (TMS). The company moved from a clunky domestic routing portal, with no routing restrictions and no SKU-level vendor routing, to an intelligent, connected digital system that features a user-friendly interface, as well as SKU-level routing and reporting​. Vendor routing restrictions based on weight and volume, as well as vendor-driven bill-of-lading creation, support greater efficiency, compliance, cost control and responsiveness to exceptions.

Digitalization also enables this retailer to optimize its entire logistics network across stores, vendors and DCs. Manual, slow and inaccurate processes have been replaced with automated, optimized practices in such areas as loading, sequencing, inbound order management and cross-docking. Instead of basing key logistics decisions on assumptions, it optimizes its logistics operations based on real-time data about costs, service levels, capacity and other constraints. Real-time access to carriers via a single platform helps this retailer maximize agility and further optimize its transportation spend.

Manufacturers, retailers, and third-party logistics providers can all benefit from digitized logistics. With nearly $21.3 billion in revenues, Bayer Crop Science distributes agricultural products to customers around the world. Johnny Ivanyi, Global Head of Distribution Operation, mentioned in a supply chain and logistics conference that the company is using its advanced TMS to achieve real-time inventory visibility for both warehousing and shipment tracking across its extended carrier network. Advanced analytics help Bayer Crop Science identify exceptions, make fact-based decisions, and respond rapidly. Across the supply chain, increased connectivity with partners is helping to build trust and strengthen relationships. Automation and greater process efficiency are improving reliability, customer service levels, sustainability and cost-to-serve.

Automated bidding events, improved load planning, route optimization and other transportation enhancements support higher service at a lower cost, with a reduced environmental impact. Across 65 countries, Bayer Crop Science is standardizing its processes and adopting best practices. The company is targeting a number of benefits as a result of its digital logistics initiative, including a 3% annual savings in its transportation spend.

Greater Resilience: The Real Value of Connectivity

After two years — and counting — of supply chain volatility, it’s clear that disruption is here to stay. Increasingly, success depends on companies’ ability to manage, and even master, ongoing exceptions and unexpected surprises.

In their attempts to master volatility, it’s important for companies to recognize that no disruption takes place in a vacuum. Just as disruptions affect every part of the extended value chain, that entire chain must participate in executing a response that maximizes outcomes for every participant. Gone are the days when an event is merely a “logistics problem” that must be solved by only the logistics function.

Executing a collaborative, orchestrated response depends on creating real-time connectivity across the value chain via advanced technology. While AI, ML, control towers, data science, predictive analytics and other capabilities are readily available today to help identify and strategically manage disruption, it’s up to each organization to attain these advanced solutions and make the commitment to fully leverage them.

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Terence Leung is Senior Director, Solutions Marketing at Blue Yonder. He has a keen interest in digitalization and the value it generates throughout the supply chain. In this role, he leads his organization to drive thought leadership and go-to-market strategy for supply chain and logistics solutions. In addition, he works with customers to understand requirements and drive best practices in the digital journey.

Prior to joining Blue Yonder, Terence was the leader in product marketing and value engineering at One Network. Previously, he was in leadership positions in industry management at Savi Technology and solutions and management consulting at i2 and Deloitte Consulting respectively. Terence holds an MBA from the University of Texas, Austin and an Electrical Engineering degree from MIT.

The post Making the Connection: The Real-World Value of Logistics Digitalization appeared first on Logistics Viewpoints.

When you think about digital transformation, you probably think of multinational giants like McDonald’s or Sephora. But it’s the small to midsize companies that often reap the most rewards from such transformation. Case in point: Brook Furniture Rental has invested in new technologies to undertake a true digital evolution, significantly improving customer service and reducing operational costs along the way.

Brook Reimagines Furniture Rental

Brook Furniture Rental leases furniture, décor, and housewares in major metropolitan areas nationwide. The Lake Forest, Illinois-headquartered company serves direct-to-consumer (DTC) customers, individuals choosing to rent furniture out of their own pocket. Brook also serves business-to-business (B2B) customers in multiple industries. These include corporate housing, in which a company needs temporary furnished apartments while relocating or training employees, as well as insurance companies tasked with providing and outfitting an entire home for displaced policyholders.

Brook does more than just deliver furniture and housewares; they bring the furniture inside, set it up, and make sure everything is comfortably in its place. In short, they make the space move-in ready. To provide these services, Brook has 12 warehouses ranging in size from 20,000 to 100,000 square feet, and a leased fleet of 26-foot box vans.

The company takes care of everything in reverse, too, picking up rented pieces when the lease is up. Typically, furniture is reused 4-6 times. When it comes back to the warehouse, items are repaired, refurbished, cleaned, and sanitized.

A Digital Transformation is Born

The belief was that the company—acquired by private equity firm Agman Partners in 2014—could scale the business more effectively if it underwent a digital transformation. After a thorough executive search in 2019, Brook Furniture Rental brought Nathan Sanders to the helm as chief operations officer. Mr. Sanders has over 25 years of experience across various industries, including logistics and supply chain services. Prior to Brook, he led distribution and logistics efforts at Ashley Distribution Services and Bluestem Brands and served in senior leadership roles at third-party logistics (3PL) companies. Mr. Sanders is now president and CEO at Brook.

While the term “digital transformation” can mean many things, the most profound transformations are focused on improving the customer experience. That was certainly the focus at Brook.

“When I came in, I did not know what systems needed to be changed. But I knew the thought process,” Mr. Sanders explained. He started by touring the warehouses, observing the customer-facing team, and, most importantly, talking to customers.

The 40-year-old company only had manual processes for taking orders. “The home-grown systems made our reaction time painfully slow,” Mr. Sanders explained. “Customers would call us and ask: ‘Can you make a delivery on Tuesday?’ The customer success representative would write down Tuesday, make an estimate of how many rooms would need furniture and what kinds of pieces would be needed. Then the rep would look at what pieces were available either in the warehouse or coming in on trucks. The rep would have to click from one screen to another and write information down on a notepad that needed to be entered on subsequent screens. The customer success representative would then take the inventory information and contact the route planner to verify if there was capacity, and on what days.

“We could never give the customer a quick response with that manual process. Customers expect us to be the experts, so we needed to find a way to improve our operations to perform more nimbly.”

Further, customers didn’t want to sign a lease agreement if Brook wasn’t able to deliver on the day they wanted. If a potential customer couldn’t get an answer quickly enough, or if there wasn’t the truck capacity to move furniture on the desired day, Brook risked losing the order to a competitor.

Another frequently asked question among customers on delivery day:” Where’s my truck?” That led to a messy series of calls between the customer success team, fleet managers, and drivers.

“On a good day, answering this question took half an hour,” Mr. Sanders admitted. “And half an hour is way too long, considering the available technology.”

When Mr. Sanders talked to customers, they wanted faster answers to these questions. Often, the implication was that if they tweaked their existing manual processes, Brook could do better. “But what I heard was: ‘How can we automate this?’” Mr. Sanders said.

A Plan Comes Together

The company concluded it needed to be able to give customers the answers they sought —24 hours a day, 7 days a week. To do this, Brook needed a circular economy for furniture rental that would give the customer self-service capabilities. Similarly, self-service would allow for faster and better answers to “where’s my truck?”

Brook decided to build new web store fronts, and then tie those to systems that could answer customer questions in near real-time. The intelligence to answer these questions came from solutions offered by the Descartes Systems Group: Descartes Route Planner, Descartes Reservations, and Descartes MobileLink. Route Planner has the sophisticated math to understand the complex set of constraints that affect delivery availability. MobileLink is the smartphone app the drivers use to see the routes they have for the day; MobileLink also provides for GPS tracking of the truck. And Reservations is the solution that allows customers to see delivery options on the web store fronts.

Now, a customer can visit the Brook Furniture Rental portal, look for furniture, then pull up a calendar with every available delivery date. B2B customers can even look at delivery availability prior to entering a lease. When the customer selects a delivery date, that date is confirmed and locked—not recommendations that would be changed later by a batch-planning process. The point-of-sale user interface is updated every 15 minutes with a real-time capacity plan generated by Route Planner.

The Marvel of Modern Route Planning

Descartes Route Planner is a sophisticated solution to ensuring a truck is fully loaded. With furniture deliveries, a truck usually cubes out before it weighs out. The system understands the dimensions and weight of every stock keeping unit (SKU). Route planning also needs to understand a driver’s hours of service, start times, and a housing development’s operating hours. It’s cognizant of average travel times, based on average traffic, by day of the week and time of day.

Then, the route itself is optimized. For example, a truck might be scheduled to make three stops for customers A, B, and C, in that order. The SKUs are loaded with a last-on/first-off approach—customer A’s furniture goes to the back of the truck, and customer C’s furniture goes to the nose. The routing solution studies the GPS coordinates of all the deliveries planned for the day and groups orders together to minimize the fleet’s mileage and travel time. And trucks don’t just drop off furniture—they pick up as well. Those stops are also scheduled in the routing solution.

To understand the true capacity of the fleet to deliver and set up furniture, Brook conducted research on timing. How long should it take to load a truck based on the number of pieces and their dimensions? How long should unloading take? How much time does it take to assemble a bed, and then make that bed? How long should hanging towels take, or placing silverware in a kitchen drawer? There’s a proper set-up time for each SKU. Buffers were then added to assure delivery teams would not operate at peak efficiency all day, and to allow for variability in the time it takes to gain entry.

Mr. Sanders was involved in the time studies. “I was actively involved in meeting our customers,” he said. “This just made my visits more efficient.” Over time, and across repeated measurements, these parameters became tighter and more exact.

Where’s My Truck?

Descartes MobileLink, integrated with Route Planner, gives everyone—customers and employees—time back in their day. The day before delivery, a customer receives a 3-hour delivery window. The day of the delivery, drivers log onto MobileLink, and the GPS tracking is turned on. At this point, customers can “Track-My-Truck” via link to see their estimated time of arrival—at 2:05 p.m., perhaps. That might shift as the day unfolds, due to faster-than-expected deliveries or traffic obstacles, for example. Rather than lose half their day waiting and wondering, the customer can stay on top of these changes to their ETA by simply refreshing their link.

The Results

Brook Furniture Rental’s digital transformation was driven by the desire to improve the customer experience. And improve the customer experience, it did. Customers can now get 24/7 online answers to delivery date availability and place lease orders any time. Call time for customers has been cut in half, in part because “where’s my truck?” calls have decreased by 50 percent. And customers are getting time back in their day thanks to real-time ETAs.

Prior to the project, on-time deliveries (OTD) within the 3-hour delivery window was at 93 percent. Now, OTD averages 95 percent across the company. That, Mr. Sanders asserts, is best-in-class for the industry. And because truck productivity has doubled, there are now twice as many items being delivered and twice as many stops being made, boosting a customer’s odds of getting their ideal delivery date.

Because of changing demand patterns driven by COVID-19, which arrived just three months after Mr. Sanders joined the company, some might not have expected to see much growth. But Brook has seen growth in certain verticals even during the pandemic. Now that COVID is in the rearview window, the CEO is firmly convinced Brook will see increased growth across all its verticals, as “Speed equals growth.”

The post Digital Transformations Are Not Just for the Big Guys appeared first on Logistics Viewpoints.

Most supply chain suppliers have solutions that are very similar to each other. Occasionally, a cool vendor emerges – a vendor solving an important problem in a new way. Emerge is that kind of company.

Emerge has an interesting new platform to deal with the problems shippers are having procuring truck capacity. There is a need for a more nimble, continuous bidding process. And there is a need to understand what a fair price for a move is.

The vocabulary used in transportation can be confusing. Newcomers often confuse the terms “shipper” and “carrier.” “Shippers” are companies that have goods that need to be transported. But shippers lack trucks. They, therefore, must hire carriers. “Carriers” are companies that trucks. Carriers move shippers’ freight.

The Emerge Solution

The Emerge solution has attributes of different supply chain software solutions. It has spot procurement functionality that you would see in a transportation management system (TMS), and the request for proposal (RFP) functionality you would see in contract planning or procurement solutions.

Emerge is often used in combination with their shipper customers’ TMS. However, the system can be used standalone, and some shippers do use Emerge this way.

Shippers can utilize their own network of carriers that is kept in their transportation management system. In a TMS, there is a record of preferred carriers by lane. For example, if a shipper needs to ship goods from Chicago to Detroit, the TMS will have a record that on this lane, the transportation planner should contact Carrier A first. If A can’t take the load, then tender to Carrier B and see if they will take it.  The Emerge solution requires that tenders generated by a shipper customer’s TMS be sent through the Emerge platform.

With Emerge, if a tender is accepted by an incumbent carrier listed in the TMS, there is no fee. If loads are not accepted by carriers the shipper is already working with, shippers can tap into the marketplace to access new capacity. The Emerge marketplace has thousands of carriers. If the Emerge marketplace is used to secure capacity, there is a small add-on fee built into the marketplace rate.

Spot versus Contract Rates

When a shipper works with a carrier on an ad hoc basis, to cover a load their regular carriers can’t take, they pay a spot rate. Spot rates are higher than contract rates.

But if a shipper wants to cover a lane on an ongoing basis – so they are not continuously scrambling to find a carrier willing to cover their loads – they will look to establish a rate based on a contract. A contracted rate is a price that will be used when the companies do business on a lane on an ongoing basis. Often the parties agree that a contract rate will be honored for the coming year. Before establishing a contractual relationship, shippers will want to do some due diligence. They will send carriers a request for proposal (RFP).

The visibility Emerge has to the marketplace allows it to leverage that data to understand the dynamics of the market. This data-driven knowledge set enables Emerge to help shippers find new capacity. Once carriers are identified that may be a good fit for a lane the shipper needs help on, the Emerge solution can generate a request for proposal. The Emerge RFP is free for shippers.

If shippers need to create an RFP, the Emerge platform makes it easy for shippers to invite carriers on the platform to submit a proposal. Because Emerge streamlines the RFP process, shippers are able to expand their bid invitations to include more carriers. Carriers in the Emerge marketplace have visibility to a shipper that needs carriage on a lane that is a good fit for that carrier’s networks.

The Emerge marketplace has carriers of all sizes but, in particular, provides new opportunities to small carriers. Smaller carriers get much of their business from brokers. With Emerge, these carriers now have real-time access to loads from Fortune 500 shippers that have typically not done business with smaller trucking firms. For a small carrier, finding loads is often a messy process involving looking at multiple load boards or broker portals. The Emerge marketplace can help carriers get their loads covered in a faster, more efficient manner.

It is all these tenders by big shippers, routed through the Emerge platform, that has given Emerge visibility to billions in freight spend; they believe that by the end of the year they will have visibility to freight spend comparable to the biggest managed transportation and brokers in the market.

A Public Cloud Architecture

A public cloud architecture is at the heart of what Emerge is doing from both a procurement and a benchmarking perspective. In this architecture, the application and data reside in the Cloud – on the Internet – instead of on a server behind a company’s firewall. Public clouds have a multitenant architecture. Each tenant’s application provides solutions, data, and a user interface specific to them.

Google maps would be an example of this kind of application. It is on the Internet, all the logic and data are on servers hosted by Google, but each user sees their own instance of the application. Dick is asking for the best route from his house to a local restaurant. Jane is asking for the best route from Boston to Chicago. Both Jane and Dick can configure the application to their needs – designating their own home address to enable faster routing, for example. And the application can pull up data on Jane’s recent trips based on her individual driving history, but Google does not show Jane where Dick has been driving.

The advantages of a public cloud go far beyond sharing a costly infrastructure. In the case of Emerge, their platform connects many shippers to many carriers. Because of this, it is feasible for Emerge to provide freight analytics.

Scale is Necessary for Freight Benchmarking

Emerge is not the only technology vendor providing freight benchmarking on a lane-by-lane basis. Several managed transportation providers, service providers who provide planners to procure and execute loads on behalf of their shipper clients, can also provide freight benchmarking. Managed transportation providers have visibility to the procurement of all the shippers they work with. Large managed transportation providers will have visibility to over $10 billion in freight spend. This is called freight under management (FUM) in the industry. A large FUM allows a managed transportation provider to do better procurement on behalf of their shipper clients because they understand what the average shipper pays on a lane, which lanes are hard to source, and which carriers really like to work in certain lanes. A large FUM is what is necessary for statistically meaningful freight benchmarking analytics.

The Emerge network was built with the permission from their tenants to use their confidential data for specified purposes that do not impinge on proprietary data. In this case, shippers have given Emerge permission to aggregate and anonymize their data for analytics. Shippers are able to get benchmarking data, but they know the data related to their shipments – including the price they paid for those shipments and carriers used – will not be shared with others.

Views into this aggregated data are what allows Emerge to tell a shipper that the average rate for a move for a refrigerated truck whose origin is Chicago and destination is Detroit is $885. However, the price you are paying is too high – 75 percent of the shippers moving freight on this lane get a better rate.

Knowing if current pricing is at, above, or below the industry average, empowers shippers to make better procurement decisions. If the price on a lane is too high, the Emerge platform streamlines the procurement process. This speed and agility in the RFP process make it feasible for shippers to conduct bid events at a frequency that meets their business needs.

ARC only knows of two TMS solutions that have the right architecture and the right client permission contracts in place to allow for freight benchmarking. Several managed transportation providers can also provide benchmarking. In both cases, the benchmarking must be paid for. The shipper either needs a subscription to a TMS or have a contract in place with the managed trans provider.

But Emerge is free for shippers to use, both for RFPs and for benchmarking. The free RFPs and increased procurement agility are what have attracted large shippers to the platform. The access to new business opportunities has attracted carriers. This value proposition has allowed Emerge to grow its visibility to market freight spend very quickly. They already have visibility to billions in freight procurement. In short, they have the scale to do robust benchmarking.

Final Thoughts

Market volatility is at an all-time high. The freight market has always bounced back and forth from environments where shippers had the upper hand to situations where it is difficult to get loads covered and carriers therefore have the upper hand. But these market shifts are occurring more often.

It is the volatility that makes new approaches to freight procurement so important. A large shipper can’t expect an annual bid cycle to be sufficient. More and more often, lanes will need to be put out to bid. Emerge has created a flexible tool that allows for this agility. The platform can tell shippers when their current lane rates are unacceptable based on the benchmarking, and then provide a mechanism for quick RFP.

The post Transforming Freight Benchmarking appeared first on Logistics Viewpoints.

Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. This article is from Logistyx Technologies and looks at cloud multi-carrier parcel management systems.

Not too long ago, if you were implementing a multi-carrier parcel management system, you had to buy the software and install it on premise. Today, this has changed.  Sophisticated multi-carrier parcel management systems are in the cloud, and adoption rates are increasing not only within large, global enterprises, but within small to mid-sized organizations as well.

Why the sudden increase in popularity?

Here are 10 reasons to implement a Cloud Multi-Carrier Parcel Management System:

1. Low Barriers to Entry: A cloud system eliminates expensive, upfront installation-related expenditures associated with hardware and software, enabling any size organization to utilize the technology. Instead, with a cloud multi-carrier parcel management system, shippers pay subscription or usage fees.
2. Easy Enhancements: The cloud multi-carrier parcel management software provider is responsible for solution upgrades and enhancements, including application maintenance, and most application upgrades can be deployed automatically, eliminating the need for internal IT resources.
3. Connectivity: These systems connect the shipper to carriers and supply chain software providers The right  system will enable the shipper or logistics service provider to meet the customer’s shipping requirements from within the multi-carrier parcel management system, and there should be no limit to how many carrier service integrations the system can manage.  The system will automatically determine the carrier that can provide the best rates to a particular region and according to the shipper’s business rules, ensuring every shipment is in compliance with each carrier’s labeling and communication standards, as well as with any applicable trade regulations. This provides shippers and logistics service providers with the agility to quickly onboard new carriers or carrier services in the event of a supply chain disruption and provide them with the flexibility they need to accommodate increasing shipping volumes, manage new or unexpected shipment origins and destinations, and meet customer delivery expectations.
4. Scalability: Businesses with a growth mindset need shipping technology that can support the company as shipping volumes and complexity increase, and a cloud multi-carrier parcel management system enables a high-growth business to quickly seize opportunities and react to threats without navigating manual processes or extracting data from clumsy systems. Cloud multi-carrier parcel management systems offer scalability, agility, and low total cost of ownership, rescuing companies from large IT overheads and empowering them to handle growth on their own terms by leveraging flexible technology that will scale with them.

To read the full article, click HERE.

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Fuel prices and a shortage of drivers are putting transport logistics under immense pressure.

The biggest challenge in the transport sector today: there just aren’t enough drivers. A recent survey conducted by the International Road Transport Union (IRU) industry association shows that this bottleneck has exacerbated worldwide over the past two years. To make matters worse, this situation will worsen when most of the baby boomer generation hits retirement age in the upcoming years. It will be difficult to fill all these positions as the profession isn’t very attractive: There is very little flexibility in the working life of a truck driver, and the pay is bad. Add to that the rising fuel prices and inefficiencies – Eurostat has found that every fifth journey is an empty truck – and the transport industry is facing major challenges which must be addressed as quickly as possible.

Look at the big picture

The only solution is to boost efficiency by optimizing processes for the long term. This requires complete transparency across all steps and events along the entire supply chain. Taking all aspects into account is the only way for logistics companies to have a solid foundation for decision making and holistic optimization. This is where big data technologies come into play.

Big data for real-time optimizations in transport logistics

Logistics and transport service providers create enormous data records as they manage the flow of goods. These data include information such as types of goods, location, weight, size, origin, and destination. By collecting and analyzing these large amounts of data, big data technologies can optimize transport journeys in real time. The great thing about this: Process data is analyzed and merged with real-time route matrix and traffic data. The resulting insights enable optimal transport and route management: Which routes within the distribution network should be utilized? How can the fill level of goods be optimized? Which truck should be used for transportation? These are decisions that can be made repeatedly at every step of the journey based on informed calculations by a software ecosystem that leverages big data in real-time.

An operation that is optimizing the real time flow of goods is also well-positioned to manage unexpected events.  Real-time insights allow the operation to rapidly make informed decisions. This is the perfect way to balance logistics and transport issues and to avoid major peak loads. According to the results of a study published in Computers in Human Behavior, determining ideal transport routes in combination with a higher fill level of the trucks can lead to a significant mileage reduction. Additional benefits include lower energy consumption and lower CO₂ emissions.

Massive potential – thanks to big data combined with self-driving trucks

Optimizing existing processes provides substantial performance improvements. But there is opportunity to take performance to the next level by incorporating self-driving trucks. These vehicles can enable operating companies to reduce their number of required vehicles and lower cost structures. These lower costs can then reduce the overall cost of consumer goods. which furthermore enables them to lower the costs for consumer goods.

By some estimates, 65 percent of consumer goods are delivered using trucks. The transition of an entire fleet to self-driving trucks can decrease operating by approximately 45 percent (according to McKinsey Route 2030, September 2030). Initial steps toward self-driving trucks are in process. For example, last year Germany established the legal framework to enable the introduction of self-driving trucks, And their use is already a reality in some states of the USA. This year, the ZF division Commercial Vehicle Solutions presented its first automated hub-to-hub transport solution with trucks driving autonomously up to 80 km/h (50 mi/h) on the highway.

Big data in transport logistics requires adjustments to the storage and turnover of goods

Not only has the labor shortage in transport logistics come to a head, but the changed consumer demands placed on logistics networks have also had a lasting impact. Consumers today expect same-day delivery. This requires intelligent urban logistics networks consisting of various regional and urban warehouses. Transportation from these new distribution centers to their final destination must also be balanced using data transparency across all nodes. This is a requirement to effectively satisfy today’s consumer demands.

Warehouses such as distribution and order processing centers will benefit from the new big data technologies. But other technologies such as autonomous forklift trucks will further optimize the storage and turnover of goods as well. The widespread use of these technologies will lower the storage costs per item as they can accelerate the turnover of stocks. Furthermore, autonomous vehicles will facilitate and simultaneously lower the costs for around-the-clock operation. We will see this development play out more and more as warehouses and fulfillment centers expand the automation of their processes. Why? The processing of e-commerce orders is accelerating continuously. As a result, more shifts are required in an environment with a lack of available human personnel. Thanks to automation, picking and shipping of orders will also be possible during night shifts.

This change, however, requires further adjustments to warehouse infrastructures. For example, entrances and docks suitable for autonomous trucks must be provided to ensure smooth workflows and to further lower transport costs. Lower transport costs can then allow operating companies to relocate their warehouses into more remote areas. Alternatively, companies can focus on saving costs at urban sites, thereby improving their ability to meet the rapid growth in demand for fast and free shipping.

Mix of measures opens up new era in transport logistics

The combination of transparency, real-time optimizations, and autonomous driving will be the long-term solution to the labor shortage in transport logistics. However, this new supply chain transparency will also raise the expectations of customers which in turn will profoundly change the logistics networks of the future.

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Jürgen Drobesch, Portfolio Manager at KNAPP, is responsible for Value Chain Solutions. Jürgen started his professional career in the development department at Philips while still studying to become a communications and IT technician. As a student, he also founded his own software development and business consulting company. After selling his company, he spent ten years working as the holder of a general commercial power of representation and managing director for a wholesale company running a manufacturing profit center. Jürgen has been part of the KNAPP team for three years now and readily contributes his experience from various industries to the new product portfolio.

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