Supply Chain Technology Solution
Selection & Implementation

Perhaps the most important decision with the greatest impact on the effectiveness of your logistics operations will be your choice of software and hardware technology solutions. The supply chain execution software market is characterized by many small vendors with solutions that are specialized in specific functional areas in specific vertical industry sectors. The risk of choosing a wrong solution is high and studies show that more than half of these systems are unplugged before they are ever implemented.

Over the years, KOM International has developed a thorough understanding of the strengths and weaknesses of today's supply chain technology
solution providers through extensive experience in selecting and implementing these solutions. Equally important, KOM International understands which solutions are most suited to specific industry sectors and which solutions are scalable to the needs of high transaction processing environments.

KOM International has a specialized supply chain technology practice to assist clients in the selection and implementation of supply chain technology software and hardware solutions. Unlike most consulting firms, KOM International's advice is completely unbiased and independent and is not influenced by supplier relationships.


KOM's supply chain technology services include:

 

Enterprise Distribution Systems

These applications typically span some or all components of an enterprise's business requirements that include but are not limited to: sales order processing, purchasing, demand planning, inventory management, manufacturing, warehousing, transportation, financial accounting, EDI, etc. Enterprise distribution systems differ from ERP (Enterprise Resource Planning Systems) in that they are typically more focused on supporting the needs of the distribution-intensive enterprise rather than the manufacturing-intensive enterprise.


Enterprise distribution systems are often integrated solutions that are niched in specific industry sectors. There are many firms offering these solutions with varying degrees of depth and breadth in functionality and industry experience. KOM International helps clients acquire the right solution for your business by providing an understanding of each supplier's heritage, core competencies, solution offering, technology capabilities, service and support performance and overall track record. top of page

Warehouse Management Systems

Warehouse management systems are solutions that manage and optimize the four-walls activities taking place within the distribution center. Since the mid-1980's, the leading suppliers in this market have evolved to go beyond the warehouse into other logistics-related areas such as transportation, labor standards, slotting, supply chain visibility, yard management, etc. Since 1999, the number of suppliers who are specialized in WMS has declined significantly and market consolidation is expected to continue looking forward. For this reason, it is essential to evaluate the financial integrity of the solution provider and sidestep the hype.

Choosing the right WMS solution provider will greatly depend on the level of complexity associated with your distribution center operation. The market is comprised of a wide range of solutions from simple stock locator solutions to advanced real-time system-directed solutions that would be integrated with automated materials handling equipment and new innovations, such as voice recognition technology.top of page

 

Transportation Management Systems

Transportation management systems are solutions that typically manage outbound shipping activity in the form of optimal LTL / FTL / small package carrier selection, freight cost determination, preparation of labels and paper work, scheduling, etc. These solutions have significant variations of complexity and core competency and often companies have to purchase more than one solution to meet their logistics needs.

The number of independent solution providers in this market has nearly been eliminated due to mergers and acquisitions from other software firms. When evaluating these solutions, it is important to identify if the software is being supported, maintained and developed or if the acquisition/merger has resulted in a solution that can no longer be supported.top of page

 

Dynamic Routing Applications

Dynamic routing applications are software solutions that optimize the assignment of outbound orders to trucks so as to minimize shipping costs. These solutions are typically deployed by firms that operate a private fleet, have dynamic shipping schedules and have multiple stops per load. These software systems utilize digitized road network databases to develop accurate times and mileages for the truck loads being routed. Traditionally, the digitized road networks were only available for the United States but more and more countries are now able to take advantage of this technology.

There are a few time-tested and proven applications in this market, most of which have been acquired by other firms. New European entrants to the North American market are providing alternative solutions.top of page

 

Order Management Systems

Order Management Systems (OMS) are solutions that manage the sales order processing cycle, which can include: order entry, inventory available to promise, inventory allocation rules, substitutions, non-stocks, product configuration, pricing, promotions, sales tracking, A/R credit, etc. These solutions are usually available as part of integrated suites because their tentacles touch almost all aspects of the enterprise. However some solutions are architected as stand-alone offerings.

Choosing the right order management system can be so difficult that some companies elect to develop their own system in-house they perceive that that off-the-shelf packages will not support the firm's core competitive advantage. Understanding which solutions to evaluate based on the supplier's heritage and experience is a very important aspect of evaluating any OMS. Since most of these solutions are highly customized, it is also key to distinguish generic solution offerings from customized ones.top of page

 

Purchasing and Demand Planning Systems

Advanced procurement software solutions with integrated forecasting capabilities are systems designed to automate the purchase order generation process so that buyers review purchase orders rather than manually entering them. These solutions help to significantly reduce inventory levels and improve in-stock service levels due to scientific forecasting techniques. There are numerous solutions available both stand-alone and integrated.

Choosing the right purchasing and forecasting solution for your enterprise will require an advanced knowledge of where you need t get to since most companies are weak at purchasing prior to the implementation of this type of software.top of page

 

3PL Execution Systems

Many third-party logistics providers are seeking to offer their clients more than just warehousing or transportation services. In the interest of increasing their competitive advantage, 3PL's are turning to technology solutions that add value to the client through web visibility of inventory, orders, shipments or through other e-commerce collaborative efforts. Because 3PL's serve clients and customers, their software requirements, such as inventory ownership, 3PL billing, Value-added Services and transparency to the end customer, are unique in that they are all important business requirements.

There are several software solutions providers that strategically focus on 3PL as a target market and have built 3PL billing modules as standard product offerings. Although most software firms will claim to support the needs of the 3PL distributor, it is important to separate the wheat from the shaft to determine the solutions that truly have a track record for this market.top of page


Supply Chain Visibility Systems

The visibility of inventory, order status, transportation shipments, sales and customer service information, product information, etc., has traditionally been isolated into various functional silos within the organization and very little information sharing was possible due to a lack of integration of enterprise software systems.

Supply chain visibility technology attempts to integrate systems in a unified ubiquitous Web user interface, such that information sharing could take place not only within the enterprise, but also up and down the supply chain with customers and suppliers. Many firms are discovering that they can add informational value to their trading partners to improve collaboration and improve their competitive advantage.

These solutions typically involve heavy integration to other systems and therefore often involve significant customization and require time-consuming data mapping efforts. It is important to ensure that the software supplier provides appropriate service and support for ongoing changes.top of page

 

Yard Management Systems

The Yard Management System is essentially an application that controls the movement of trailers, inventory and people within the exterior distribution center yard. These applications tend to be deployed by firms with significant assets in private fleets, with 100 or more trailers, or firms with significant traffic within the yard that is controlled by yard jockeys. The software controls the movement of trailers and the prioritization of loads to be received through instructions issued to yard jockeys via wireless communications.

There are few suppliers of this software due to the market place being relatively small and the solutions being in their infancy stages. Some of the larger WMS solution providers market YMS as an extension of their product portfolio and there are stand-alone solution providers as well. It is important to assess the level of sophistication required for this application, because some of the solutions are advanced in terms of their capabilities.top of page

 

Labor Productivity Systems

A labor productivity system is a solution that predicts and monitors the amount of direct warehouse labor required to execute warehouse operations, such as order picking and stock movement activities. These solutions are closely coupled with the warehouse management systems that generate the work to be done. For this reason, most labor productivity software is an extension of a high-end WMS solution.

To predict the labor time required to execute tasks, engineered labor standards are typically used in conjunction with XYZ coordinates for each physical stock location. Many firms with a large warehouse direct labor force use this software to measure operator performance and often companies can create financial incentive systems based on the engineered standards. In unionized environments, the software can play a key role in contract negotiations regarding labor productivity.top of page

 

Radio Frequency and Bar Coding Systems

RF technology is the hardware used to communicate information (typically bar code information) to computer software systems that gather and utilize the data (e.g. WMS). The manufacturing of RF equipment is dominated by several market leaders who typically go to market through various distribution channels including resellers.

It is important to recognize that RF technology provides the backbone, but not the nerve center, of a physical operation. In other words, this technology provides the ability to gather data but not necessarily make use of it. RF and bar coding technologies need to be implemented in conjunction with software systems that not only gather the data but also respond to it in real-time or in batch mode.

This technology has evolved from its origins in proprietary systems to the point where today's solutions are developed using industry-standard wireless communications protocols. New product innovations continue to emerge to improve the ergonomics and usability of the terminals. When choosing a solution provider, it is important to look beyond price and to study the equipment options, use of standards and level of supplier support available for your geographic area.top of page

 

Voice Recognition Technology

Voice recognition technology in industrial environments is a relatively new technology application but one that promises to provide tremendous value going forward. This technology enables industrial operators (e.g. warehouse order pickers) to receive voice instructions from a headset; thereby enabling paperless work environment and eliminating the need to use RF devices to scan bar codes to confirm transactions.

The results of early implementations indicate that order accuracy, real-time inventory information, reduction in new personnel training, productivity increases, elimination of paper documents, and the ability to support multiple languages in the distribution center work force are all exciting benefits of voice technology.

There are as of yet few suppliers of voice technology solutions. When evaluating suppliers, ensure that the solution provider can integrate voice technology to the chosen software support system (e.g. WMS).top of page