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10 'Must Have' Supply Chain Execution
Technologies
Supply chain management is not a static process, and it's crucial
to continue the pioneering thinking that has shaped the industry.
The whole paradigm of supply chain management has changed from traditional
mainframe and PC-based supply chain planning systems to online supply
chain execution applications.
The world is also moving away from traditional software-based systems
and adopting Web-based applications to maximize efficiency, quality
and savings.
In the 1980s, Fred Smith, FedEx chairman & CEO, pioneered the
concept of a "global warehouse" when he invented the
first real-time global package tracking network. In essence,
today FedEx
receives 10 million shipments (pieces of inventory) into it's
warehouse (earth), efficiently tracks them through each step
of the delivery
process and is able to provide a complete online status at anytime
with an amazing 99%+ inventory accuracy rate.
In the 1990s, Jim Barksdale extended this virtual inventory management
strategy when he coined the phrase "A 55 mph or a 550 mph
warehouse."
As we move forward into the 2000s, these strategies are now more
relevant than ever, and technology continues to be the single driving
factor toward supply chain efficiencies and savings.
Smart organizations that recognize and adopt these "Top 10" logistics
technologies will enjoy great success:
- Information-Focus: Information in today's logistics environment
is inconsistent, fragmented and all too often inaccurate.
Now more than ever, there is a need for an infomediary like Accuship, Inc., to
receive, consolidate, normalize, analyze, correct and provide
the information visibility needed to assist logistics professionals in
better managing their company's logistics investment.
- Independent and Collaborative: Every major client will have different
ERP, order entry, e-procurement, warehouse management,
inventory management and communication interface requirements. Successful
e-logistics technologies must be able to mesh with, and exploit all current
client technologies.
- Multi-modal and Multi-carrier: No major company uses just one
carrier and most use dozens. Given this reality, the ability
to
provide 100% carrier and service consolidation must be at the foundation of any
complete supply chain execution technology. Once this is
done,
logistics professionals can easily compare shipping alternatives between
various modes, carriers and services to truly maximize their logistics
operations.
- Web-based: When you think about your design options to
provide a complete supply chain execution system, you quickly
come
to the conclusion that traditional mainframe or PC-based applications cannot
begin
to provide the total inbound, outbound and drop shipment
functionalities required by any of today's major companies. This makes Web-based
Application Service Provider technologies the best and
only solution
that will receive worldwide endorsement.
- EDI and XML:
While the Web is the primary client interface technology, Electronic
Data Interchange and Extensible Markup Language
are the driving back-end technologies for high volume invoice processing
and tracking applications.
- Enterprise Functionality: What you ship is exactly
what you want to track, account for and report on. Our industry
did
not grow up that way and is still suffering from disjointed information sources.
Today's more advanced technologies offer the full range
of integrated supply chain execution functionality from the initial shipment,
through shipment delivery, accounting, payment and information management.
- Real Time and Proactive: The Web provides the
ability for today's systems not only to be real-time but to also
be proactive.
While traditional carrier tracking solutions contain a phenomenal amount
of information, they are traditionally not in the business
of providing advance alerts to proactively let clients know of shipping exceptions
and delays. Today's e-logistics systems extend this carrier
functionality
by providing shippers with a single site that actually
tracks packages
before, during and after the shipment for all major carriers.
- Data Warehouse: Real-time, online data access,
providing package-level detail reporting, multi-year trend reporting,
ad hoc
reporting and hyper-link drill-down capabilities is a necessity to meet all logistics,
accounting and management needs.
- Global Scalability:
Shipping globalization is the norm and any complete logistics
system must be designed with a global vision
at the onset. The functionality to print all required shipping documentation
and
manage customs, landed costs, currency conversion and
shipping restrictions are all core requirements to achieve global scalability.
- Security: Now, more than ever, professional logisticians need
to be cognizant of the best ways to secure their supply
chains as well as all other shipping activity. Web-based shipping with system
log-ons
and passwords and 128-bit encryption are all becoming
industry standards to help ensure against both fraud and more serious occurrences.
There is a whole new breed of innovative supply chain technology
providers that have listened to client needs and are providing
e-logistics solutions that address each of the Top 10 e-logistics
trends outlined.
The end result is significant improvements in supply chain
efficiency and inventory cost reduction.
Mason Kauffman, Accuship chairman & CEO, is one of
the world's authorities in logistics information technology.
Contact him
at mkauffman@accuship.com or at 271-1936.
RBI Think Return Before Investment
Parcel Shipping & Distribution: Spring, 2003
by:Mason Kauffman
In the 90's clients were sold on the business concept of
return on investment (ROI). Unfortunately, this left clients
feeling that they
had to pay a significant up-front investment and then wait
for a potential return
which may, or may not occur. And all too often, projected ROIs did
not materialize.
In today's cost-conscious business environment, the old "ROI" term
is quickly being replaced by the new business paradigm of "Return Before
Investment" (RBI). While the term "ROI" began as a noble ideal,
the days of the big up-front investments have given way to a more real-world
transaction-based economy where technology companies have to prove their worth
each day. "The Bank of America wholeheartedly supports the concept of
RBI. Who wouldn't?" asks Dick Whitehurst, transportation and
logistics strategy leader, Bank of America.
How can we achieve the goal of RBI in the logistics world? Here are
three tips to get you started.
Information-focus
Having access to complete and accurate real-time information is the
first step toward achieving RBI. Client focus groups consistently
share their
interest
in utilizing the information available through today's Web-based
services to replace the up-front costs and maintenance associated
with traditional
onsite
hardware and software solutions. Instead of investing in traditional
mailing, shipping, and other logistics systems, many clients are
now beginning to expect
a strong RBI with no up-front costs and strong ongoing expense reduction.
A great example of this trend is in the way desktop shipping is replacing
many of the traditional mail center shipping functions. Similar to
the way desktop
word-processing programs replaced the old Wang-type word processing
systems in the 80's, multi-carrier desktop shipping alternatives
like AccuSHIP
are providing shippers with the up-front routing knowledge, address
accuracy, cost
center validation and online reporting required to virtually eliminate
the duplicated efforts still performed in many traditional mail centers.
Another example is how major retailers and manufacturers are using
the same Web-based warehouse information network to replace inventory
with
information.
By providing online shipment processing and inventory visibility
for all inbound, outbound and third-party shipping activity, onsite
inventory
levels
and the
associated inventory carrying costs can be significantly reduced.
The additional benefits of achieving optimal carrier routings and
vendor
compliance are
where RBI starts to turn into an information grand slam. "Information is the
reason Coca-Cola has been able to control logistics costs so well," states
John Hardy, strategic procurement manager for The Coca-Cola Company
Independence
Clients want one site to manage all logistics activities. With the
realization that no one transportation company represents more than
five percent
of the total logistics spent, you quickly realize that logistics
systems need to support
all modes and carriers. No Fortune 500 company uses, or will ever
use, just one carrier; most use hundreds.
While each carrier's operations are very unique, companies like AccuSHIP
have the experience and technology to map each carrier's core data
elements (e.g.
tracking number, origin, destination, pieces, weight, charge, discount,
cost center, etc.) into a common database. The end result is additional
RBI through
the ability to truly optimize the use of all modes and carriers. "Nike
uses hundreds of quality carriers, and it's great to have one online system
that can manage them all," adds John Turina, USA transportation
manager for Nike.
Clients need logistics technologies that will collaboratively interface
with and complement all installed technologies. Additionally, to
eliminate the need
for ongoing training, the design focus must be on ease of use, then
speed and functionality. The ATM is a great model to follow. When
you think
about it,
no one ever taught you how to use an ATM due to the simple elegance
of its design. This same concept is true in maximizing the RBI for
logistics
initiatives.
Enterprise Solution
The strong trend toward consolidation is unmistakable. Think about
it; whether it is grocery stores, retail stores, travel systems,
credit cards,
Internet
search engines or logistics information systems like AccuSHIP, everyone
is moving toward business models that provide all logical choices
so clients will
not have to be locked in to just one alternative.
The simple fact is that what you ship is exactly what you want to
track, account for and report on. As logical as this fact is, today's
shippers
often still
have one PC-type system to process shipments, utilize the Web to
track shipments, process invoices via EDI or paper through another
network,
and receive reporting
through yet another system. All of these functions have to be put
back together in the same seamless database for all modes and carriers
to
achieve maximum
RBI.
Microsoft is able to provide its entire suite of Word, Excel, Access
and PowerPoint for the approximate price of any one competing module.
Likewise, AccuSHIP is
able to provide its entire STAR enterprise of shipping, tracking,
accounting and reporting applications for the price of just a traditional
shipping
system, supply chain, accounting or reporting alternative.
The combination of enterprise
services like AccuSHIP's STAR system creates an RBI opportunity significantly
greater than any of the individual components.
These initial tips will provide you with an excellent insight into
the new services available to help your company achieve RBI. We welcome
you
to contact
our team to find out how much your company can benefit from a strong
return before investment program.
Mason Kauffman, AccuSHIP Chairman & CEO, is recognized as one
of the world's foremost authorities in logistics information technology.
Contact
him via email
at mkauffman@accuship.com or by phone at 901.271.1936
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