"Supply chain software: The next view of warehouse management software"

By Bob Trebilcock, Executive Editor
Supply Chain Management Review
June 18, 2010

I’m finishing up our annual look at the Top 20 providers of supply chain management software for the July issue of Modern. If there is news, it’s that the market for warehouse management software systems (WMS) shrunk by somewhere between 15 and 20% in 2009, according to Steve Banker, service director for supply chain management at ARC Advisory Group (http://www.arcweb.com). You may not come as a surprise to some given the overall economy. But the overall market for supply chain management software was off by just 2% last year.

One reason could be that the core technology for managing receiving, putaway, replenishment, pick and pack and shipping has been in place for some time. If it ain’t broke, don’t fix it: If your old WMS is working, why mess around with something new.

With that in mind, I asked Banker what he’s watching in the WMS market today. His answer: “Visualization.”

Now, we’ve been talking about real-time visibility in the supply chain going back to the Internet boom. That’s when your software systems can provide real-time information about what’s going on in your warehouse, transportation or manufacturing processes. But, visibility provides that information in the form of data, reports and alerts.

Visualization is something different. This is technology that delivers a graphical illustration – a picture - on a computer screen, an RF device, a PDA or a mobile phone. “Imagine you’re in a warehouse, and you don’t have enough slots so you’re storing more than one SKU in a slot,” says Banker. “With visualization, the system can display a picture of which SKU the associate is going to pick on the RF screen. Or, it can tell the associate that he is to build six kits for a customer, and show him what items should go in the kit and how they should be kitted.”

Several WMS providers have developed visual solutions, including Tecsys and Next View Software. They are taking two different approaches to the market.

Tecsys (http://www.tecsys.com), the Montreal-based provider of supply chain management software, has developed something it calls “visual logistics” in its WMS application. The idea is simple: instead of sending text-based instructions to an associate’s RF gun, the Tecsys system associates visual information with the labor task. Picking instructions, for instance, include a visual representation of the product that is going to be picked, along with a visual representation of where in the rack that product is located. If an associate is picking to multiple shipping containers on a cart, the system can highlight which container location gets the pick.

“If you think about driving down the highway, all of the signs used to be in text, and now there’s a graphic image that you instantly recognize,” says John Reichert, product marketing manager. “We’ve build an entire technology platform that allows us to do the same thing for the RF-enabled operator on the floor.”

While voice and pick-to-light have been making inroads into areas that were traditionally RF, Reichert contends that in complex picking environments, where an associate is picking to multiple totes or containers, for instance, visualization is an advantage. “As the complexity grows, that’s where we believe visualization will have a speed advantage, even over hands free picking,” he says.

Next View (http://www.nextviewsoftware.com) is using the gaming technology that powers Microsoft’s Xbox to bring warehouse, transportation and network operations to life. “If we can get a data feed from your overseas shipper, we can show you the loads you have on the water coming from China,” says Steve Simmerman, vice president of business development. “If your carrier has a GPS on their tractors, I can show you on Google maps where your loads in transit are located. And if you want to see where all of the inventory that’s within ten days of its expiration date is stored in the warehouse, you can query the system and have it highlighted on your screen.”

Tie the WMS to a labor management system that has warehouse coordinates and engineered labor standards, and the system can show the work being done in real time, including lift trucks and employees traveling down the aisles at the speed associated with those labor standards. Want to identify bottlenecks? Next View’s solution acts like a DVR, allowing you to watch what happened during a specific period of time. Last, and most important to Simmerman, the system can be tied into Skype, allowing supply chain partners to collaborate in real time to plan or identify problems.

There is no question that what Tecsys and Next View are doing is very cool. The question is whether these are solutions in search of a problem, or whether they are truly on to something game changing. “Right now, it’s very sexy, but it’s not being sold,” says Banker.

Tecsys has one customer using images for specific tasks and another customer about to go live with the full capabilities. Next View has implemented its system at a third party logistics provider.

Both Reichert and Simmerman believe this is where technology needs to go. After all, both say, end users are seeing rich graphics on their computers and video games at home. Bringing life to the green screen at work is the next logical step. “We fundamentally believe that business applications need to change,” says Simmerman. “Over the years, we’ve developed layers of intelligence and we can give people dashboards. But until now, there’s been now real-time end-to-end view of the supply chain.”

Until now.

To view the original article on Supply Chain Management Review, please visit their website.

Top 3PLs find savings on path to environmental sustainability

Source: Fleet Owner, Apr 22, 2010 9:28 AM, By Sean Kilcarr, senior editor

A detailed analysis of so-called “sustainability” programs launched by many global third party logistics (3PL) providers finds most are maintaining and even expanding such efforts largely due to the costs savings they’ve generated.

The “Third Party Logistics Sustainability Report” compiled by Robert Lieb, professor of Supply Chain Management at Northeastern University and Kristin Lieb, assistant professor of marketing communication for Emerson College, shows that many large 3PLs increased their commitments to developing greener practices and building environmental sustainability programs despite the global recession of 2008 and 2009.

Sponsored by Penske Logistics and based on key findings from the 2008 and 2009 “3PL Provider CEO Perspective” surveys conducted by the Liebs, the report found that 28 of the 35 3PL CEOs polled said sustainability programs yielded overwhelmingly positive results. These were seen as reducing operating expenses, especially fuel costs, with one CEO noting that sustainability efforts resulted in a 40% reduction in fuel expenditures.

“I was first surprised by the breadth of the 3PL commitment to ‘sustainability’ efforts in 2008, then surprised again in 2009 as many expanded those efforts in the face of the global recession,” Robert Lieb told FleetOwner.

He said the 35 3PLs– including DHL Exel Supply Chain, Kuehne + Nagel Logistics, Landstar, Menlo Logistics, Penske Logistics, Ryder, Schneider Logistics, Transplace.com, and UPS Supply Chain Services to name a few – represent a total of $60 billion in revenue each year.

“Our research now indicates most [3PLs] are staying on the [sustainability] path in 2010 as they are realizing economic advantages from them,” Lieb added. “Many came back surprised themselves at the significant operating savings they were achieving through sustainability efforts.”

Some 63% of the 3PL CEOs surveyed reported expanding the existing sustainability programs in 2009, with 71% of CEOs indicating they had launched completely new sustainability initiatives.

Lieb stressed there’s no focus in the 3PL space on one particular sustainability path. Rather, most of the companies are taking a very broad approach across their organizations. They are engaged in everything from installing motion-detector light switches to reduce electricity use to building windmills at distribution centers to generate power, and even educing the work week from five to four days.

“We tallied 20 different sustainability programs affecting transportation alone,” he noted. “So no one thing stands out from 3PL sustainability efforts; these are very broad efforts.”

Interestingly, while the 3PLs said their customers are showing increased interest in their environmental sustainability capabilities, it’s not necessarily translating into new or increased business from their customer base.

Only six out of the 35 3PL CEOs polled reported that their company sustainability efforts led to increased business with both existing and new customers. Overall, despite their investments, most 3PLs said sustainability was very infrequently a determining factor in either extending existing contracts or securing new 3PL business.

“At this point, sustainability is not yet a decisive factor in whether 3PLs maintain or receive new business,” Lieb said. He pointed out that “a corporate desire to do the right thing” was by far the most important reason to commit to sustainability initiatives, noted by 24 out of the 35 CEOs. And “pressure from customers” ranked a very distant second – cited by only seven respondents.

On average, 21% of existing customers and 20% of potential customers raised sustainability issues in their discussions with the 3PLs, Lieb related. When asked what percentage of their existing contracts included sustainability performance metrics, the average response was just 2.5%, he said.

Paper Converting Services

Midwest Warehouse offer these services at their paper converting machine company, Midwest Converting.

Midwest offers precision paper slitting, sheeting and trimming services and solutions through Midwest Converting. Midwest Converting does not buy or sell paper; instead they focus on providing the right mix of flexible, time sensitive solutions that enable customers to improve service, enhance converting capabilities and reduce cost.

Located in Bedford Park, Illinois, our paper converting machine company maintains a full compliment of machinery that includes 116” wide high-speed rewinders, 65” precision sheeting equipment and 110” wide trimmers. This wide variety of converting machinery gives Midwest Converting the capability to convert virtually any grade or type of paper, from 10 pound bag paper to 34 point board stock. Midwest Converting’s unique operation can accommodate one-ton to 1,000-ton orders anytime while still providing same-day and next-day service.

Case Study Spotlight: International Printing Services Corporation

Midwest Helps International Printing Services Company Achieve Logistics Excellence at Multiple Sites

"Midwest Warehouse is a really great company to work with. They are professionals who listen to our needs and quickly respond. They understand our goals and do whatever they can to help us achieve them."

- Facility Manager, International Printing Services Corporation

The Client
As an international printing, document outsourcing and logistics services provider, this innovative company integrates leading-edge technology in its global manufacturing operations to deliver fast and accurate services to clients worldwide.

The Challenge
To maintain its position as a leading provider of a full range of print and related services, this client is committed to ensuring its customers’ printed materials and products are safely stored and accurately delivered from their point of origin to their final destination. To accomplish this objective, the client established a number of strategically located and networked facilities throughout the U.S. As demand for its products and services continued to grow, the client needed to optimize its logistics operations to keep pace with increased customer demand — without sacrificing quality or driving rates upward.

The Solution
Midwest Warehouse (Midwest) was engaged in 1997 to help the client improve its logistics capabilities at one of its key operations centers. To ensure the client’s needs were fully supported, Midwest established a team dedicated exclusively to providing the client with professional, accurate, timely and cost-efficient logistics services. Over the next five months, Midwest’s team helped the client consolidate two different platforms and successfully integrate two different cultures while also implementing enhanced processes. Working together, Midwest and the client were able to:
• Increase productivity and service levels
• Improve inventory accuracy
• Expedite product delivery
• Eliminate costly incorrect shipments
• Reduce costs

Based on Midwest’s demonstrated ability to drive significant business improvements and decrease costs, the client selected Midwest as its full-time, third-party warehouse provider at the facility. In this role, Midwest was charged with handling the client’s inbound/outbound and inventory process. Soon after, the printing services company engaged Midwest to help strengthen operations at multiple sites across the country.

The Results
Midwest and the client have remained trusted partners since 1997. Over the years, Midwest has helped the printing giant dramatically streamline operations, implement best practices and increase profitability at locations in five states. “Midwest is really proactive — not only in their services, but in helping us manage operations. They are sincere in making sure we are doing things right. If something is dysfunctional, they help us identify the issue so it can be resolved quickly, which in turn reduces our operating expenses,” said the client’s facility manager. “They also played an important role in helping us meet Six Sigma project management objectives.”


What to know how many pounds of freight Midwest managed?
Want to know the accuracy percentages we achieved in this relationship?

Please visit our Logistics Case Studies page.

The 7 Principles of Supply Chain Management

The most requested article in the 10-year history of Supply Chain Management Review was one that appeared in our very first issue in the spring of 1997. Written by experts from the respected Logistics practice of Andersen Consulting (now Accenture), “The Seven Principles of Supply Chain Management,” layed out a clear and compelling case for excellence in supply chain management. The insights provided here remain remarkably fresh ten years later.

By David L. Anderson, Frank F. Britt, and Donavon J. Favre -- Supply Chain Management Review, 4/1/2007

*Principle 1: Segment customers based on the service needs of distinct groups and adapt the supply chain to serve these segments profitably.

*Principle 2: Customize the logistics network to the service requirements and profitability of customer segments.

*Principle 3: Listen to market signals and align demand planning accordingly across the supply chain, ensuring consistent forecasts and optimal resource allocation.

*Principle 4: Differentiate product closer to the customer and speed conversion across the supply chain.

*Principle 5: Manage sources of supply strategically to reduce the total cost of owning materials and services.

*Principle 6: Develop a supply chain-wide technology strategy that supports multiple levels of decision making and gives a clear view of the flow of products, services, and information.

*Principle 7: Adopt channel-spanning performance measures to gauge collective success in reaching the end-user effectively and efficiently.

Translating Principles into Practice
Reaping the Rewards

Managers increasingly find themselves assigned the role of the rope in a very real tug of war—pulled one way by customers' mounting demands and the opposite way by the company's need for growth and profitability. Many have discovered that they can keep the rope from snapping and, in fact, achieve profitable growth by treating supply chain management as a strategic variable.

These savvy managers recognize two important things:

1.

They think about the supply chain as a whole—all the links involved in managing the flow of products, services, and information from their suppliers' suppliers to their customers' customers (that is, channel customers, such as distributors and retailers).
2.

They pursue tangible outcomes—focused on revenue growth, asset utilization, and cost.

Rejecting the traditional view of a company and its component parts as distinct functional entities, these managers realize that the real measure of success is how well activities coordinate across the supply chain to create value for customers, while increasing the profitability of every link in the chain.

Our analysis of initiatives to improve supply chain management by more than 100 manufacturers, distributors, and retailers shows many making great progress, while others fail dismally. The successful initiatives that have contributed to profitable growth share several themes. They are typically broad efforts, combining both strategic and tactical change. They also reflect a holistic approach, viewing the supply chain from end to end and orchestrating efforts so that the whole improvement achieved—in revenue, costs, and asset utilization—is greater than the sum of its parts.

Unsuccessful efforts likewise have a consistent profile. They tend to be functionally defined and narrowly focused, and they lack sustaining infrastructure. Uncoordinated change activity erupts in every department and function and puts the company in grave danger of “dying the death of a thousand initiatives.” The source of failure is seldom management's difficulty identifying what needs fixing. The issue is determining how to develop and execute a supply chain transformation plan that can move multiple, complex operating entities (both internal and external) in the same direction.

To view the rest of the article, please click here.


For more information on how Midwest Warehouse and meet your supply chain needs, please visit our website or our Chicago third party logistics, food distribution and paper converting machine company pages.

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