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When the product volumes are high and shipping destinations many, things can quickly get out of control. Automating with a transportation management system will help.
If things go wrong and you are unprepared, you are in for a very tough time in trying to get them under control again. These kinds of mistakes in business mean delayed deliveries, lost revenue, and angry customers.
TMS systems and components are available from many major technology companies, including IBM, SAP, Oracle, and others. There's even a free version called TheFreeTMS.
Here's how to avoid that:
Planning — In order to ensure that goods reach their stipulated destinations in time, use technology to your advantage. Transportation management systems (TMS) provide you with a solution for your planning needs. They are able to connect carriers, shippers, and customers into a collaborative logistics network that is automated from end to end.
TMS software allows you to perform continuous and incremental planning, which means plans are automatically updated in real time for you and all your trading partners based on the changes in the business environment. TMS software can also be delivered as software-as-a-service, which means fewer IT resources, no upgrade costs, easy connectivity, and low total cost of ownership — ideal for the SMBs.
Contingency plans — No matter how good your plans are, at times they are subject to change. So, it is best to plan for contingencies. Using TMS, you can simulate contingency plans for delivery so that if the primary plan fails you will have a secondary strategy in place.
The advantage of simulating contingency plans is that you can also simulate the cost of these plans, and as a result, you know exactly how much additional cost will be required to deliver goods on time.
Monitoring & review — The human factor cannot be ignored. Even with the software doing bulk of the work, the most important task is left for the employees: to monitor the entire process and make changes whenever necessary. The changes that happen on the ground must be updated in the system.
If due to any unforeseen circumstances the actual plan is no longer feasible, the users must ensure that the contingency plan has been activated and associated costs have been analyzed. Changes to the delivery routes, schedules, vehicles, etc., must be communicated to the logistics team to ensure there is no information mismatch between the logistics personnel and the information in the TMS.
Usually, this process is done through EDI — an electronic data interchange. However, at times it must be done manually if your logistics provider is not integrated with your TMS.
The technology is paving way for the better management of the supply chain and transportation for the enterprise. It is up to you to decide if you want to opt for a technological change and reap benefits or stick to your legacy system and be vulnerable.
Planning needs to starts at the implementation stage. Creations of client-specific KPIs developed in the analysis phase of a TMS deployment will lead to an on time network. This all starts by defining the client's perfect order and includes lane analysis, route guide setup, and continuous improvement plans. As you mention, this isn't possible without the right system/technology.
“It is up to you to decide if you want to opt for a technological change and reap benefits or stick to your legacy system and be vulnerable.”
Most companies will opt for a technical change right away if they can offord it or understand the benefits it can give them. But it is not anly about about adopting the technology, but is also hiring and training the right skills to run it. If the learning curve is high, the rate of adoption migt be very low.
Good one indeed but I think that most of the features are available in this software are there in most of these tracking sites.
Greg Riemer,
“Planning needs to starts at the implementation stage. “
That's correct. This implies that the design and and implementation teams are able to think of most the different client's order scenarios during the analysis phase, and plan ahead accordingly.
Hi Greg!
You are spot on. Planning needs to be from the implementation stage for a new deployment. KPI's are usually identified and agreed upon during the analysis phase of the implementation and a formal document is submitted as a deliverable by consultants. Later, these agreed upon KPI's are measured and performance of the system is analyzed accordingly. And, yes it wouldn't be possible to do all of this efficiently without proper use of technology.
Hi Hospice_Houngbo!
Opting for a technology deployment is concerned with both finances and the willingness to improve. Today, the benefit is that companies do have the choice to opt for freeware too. It might not be as sophisticated as the premium products but does much better than maintaining things on MS Excel. Furthermore, there are SaaS based tools also available and the cost is not very steep.
You also mention about the learning curve and I believe it is a very important aspect of the deployment. Training end users & key users is the responsibility of the implementation team and they make sure that they give enough training to these people so that they can manage on their own in the future. Usually, companies get into a support contract for the initial few months so that professional help is available alongside in-house resources.
Hospice_Houngbo:
I would like to add here that the analysis of the scenarios is done through mutual work by the implementation team and the in-house resources. At times there are formal sessions nominated for this activity as often it is termed as the requirements gathering or AS-IS phase of the project implementation.
Well said, Greg. I wonder why this isn't consistent practice across the supply chain already. Any thoughts on that? It just seems like a “no-brainer” to me.
Sohaib: The notion of using SaaS and cloud computing for these sorts of functions seems like a logical course to me. I can imagine how that would help smaller supply chain operations take a quantum leap in their abilities to manage risk and assure a smoother cash flow.
Do others agree?
What system do big companies like Amazon use for tracking shipments?
There are many tracking sites but I think it differs based on the client isn't it ?
Planning for contingencies is critical. What are the most common snafus that come along in these instances? Does this software help organizations spot early warning signs of these problems earlier?
Sohaib, SaaS based applications are available in tracking the products/goods from production environment to the facilitation or final destination place. All such tracking is based on human intervention (keying the details) and we in supply chain looking for a fully automated system with some tags like RFID or NFC. This will help for auto updation in system and can be tracked from remote sites.
Tom, the notion appears to be logical and straightforward but still there are a lot of firms out there who are still doing things the old fashioned way. For SMB's such tools can make enormous difference not only to cash flows and profit but also in maintaining better supply chain practises.
Hailey, the contingencies in this part of the world are mostly because of the inconsistent political and law & order situation. The most common scenarios include strikes, labor unrest etc. In these cases at times the land route gets blocked and the delivery system gets choked. In these cases the software can help in running scenarios for delivery accounting for the delays. If the delivery is extremely urgent and cannot be delayed a simulation for air frieght costing & delivery can also be executed.
Jacob, RFID based tracking systems are also available on the SaaS platform. RFID enables clients to opt for item level tracking instead of the more commonly used batch tracking.
RFID based tracking facilities are available freely right now. Its just a matter of fact in improving the features.
Rich, you are most welcome!
These software systems are really very handy for organizations if they intend to use them to full effect. They integrate different parts of the enterprise seamlessly to give you better operating efficiency.
“RFID based tracking systems are also available on the SaaS platform. RFID enables clients to opt for item level tracking instead of the more commonly used batch tracking. “
Sohaib, then what's the difference between RFID based tracking and your proposed systems.
@sohaimasood, thanks… very helpful. The only thing you can plan for is needing to plan for contingencies!
RFID is one of those techologies that remains wildly under-used, and I wish I could explain why. Many merchants, of course, tag items in the supply chain, but the cost of the tags remain a tad on the high side — what ever happened to the 5-cent tag we were promised five years ago.
Douglas has put his finger on a very simple use that is also very practical and very affordable. If I were a leasor, I would tag every item in my inventory. If I were a long-term lessee, I'd do the same. This is a clever little strategy that almost any company could apply, and find new places to apply it, too.
@Tom…I'm gratified that you saw the value of this article. It is very indicitive of the response level in an ironic sort of way. It is precisely because people say “I have nothing to do with renting equipment” that the problem persists in companies. It takes an owner or someone with a card in the game to call for a rental equipment review. The additional irony is that our company saved so much money that we justified three more hire in place of the needless rental spending. We used to call that kind of savings, “low hanging fruit.” It became part of our periodic cost reduction practices. If a company is heavy into R&D and there are more than 7-10 engineers that have been working on various projects for at least two years, I can almost guarantee that there is rental equipemnt in the lab that should have been returned. Has anyone else had this same issue?
Very helpful article. Especially for those expensive equipment no doubt it is more cost-saving to rent than to buy. Even if we buy, the next 2-3 years we have to upgrade to a new model. And sometimes we only need them for a few months.
@t.alex…Just curious. How long does a development project take at your company? Does the company rent their test equipment? I think you hit the nail on the head. If you only rent for a few months, is someone in your company responsible for all test equipment or do you rely on the engineer to tell you he or she no longer needs the equipment?
@DA: I also love too have RFID tag for small tools/equipment. Like caliper, hot plate, handheld DMM etc. This serves too purpose – you can find them when you need them – may be in someone's drawer. It also serves to locate them for claibration and can assign owner.
I suggest organization who porvides calibration service should provide service to add RFID tag to all different small equipments.
Can RFID also be useful at home? We get so many items at our home, we can not keep track. If low cost RFID solution is offered for home, this provides good tracking of all items.
@_hm…I agree. If a rental or calibration lab attached RFID renewable, programmable tags to their rental equipment, then they could offer the tracking feature software as a competitive edge over their competition. In the 80s, I wrote a pseudo code program and presented it to Leaseametric execs. They had me speak at their annual sales conference. I gave them a demo of how rental software might work as a means for getting their salesman into a company's front door. It included a reminder feature and a date and time stamp. They liked the presentation, but said they were already working on their own version and did not need mine. I never saw their version and as far as I know, their is still no software with RFID offered by rental or calibration companies out there.
@DA: I agree with you and your foresight in evolving new concepts. I may suggest that one of the vendor should take this initiative, and all other will follow. It may be the smallest of major vendor should take this lead. RFID is very powerful device and should be utilized to enhance efficacy.
@-hm…I think we have to face reality. The reason the rental told me my idea was so good but that they were working on their own version is obvious. They did not want to purchase my program because they actually benefit from having companies continuing to pay for products no matter if they are using them or not. In other words, they never had any intention of developing that software tool because they believed it would have undercut their business. The only way this software application will fly if the end user/renter company buys it themselves.
@Douglas
Your case study is an interesting example of RFID use. Could you tell a bit more about the process of how the polling worked?
How were the readers placed? Did somebody go around with an HF reader to read all the tags? How were the owners of the equipment notified? If you could walk me through this process, I will get a better understanding of the efficiency of the system you are talking about.
Regards…
@Cryptoman…This was early on in RFID so a walk around reader was all that was available. If I was going to implement a new lab today, I would use ZigBee wireless associated with the transmitter and reader. The ZigBee tag with the radio is about the size of a quarter and good for longer distances with about a 2 year battery life. The radio in a mesh network is easy to identify as each tag will have its own IP. I would then port the data to the internet and with a supplied API, write and update a DB automatically. The DB would flag for calibration and rental due dates with flags and alerts for overdue dates. The design of the hardware system can be ported to any asset tracking, rental or not. Laptops, Desktops, CAD systems etc. Once the asset is logged into the DB with the owner's name and phone number associated thereto, any queries can be expedited and actions confirmed with a notes field with follow-up flags that could port in-turn to an auto-email notification or reminder. Design this network abd it will pay for itself as I am sure you will find other useful items/assets to track. One thing I would like to see implemented is the tracking on equipment that is borrowed” from R&D by manufacturing. THis is particularly true if the factory is offsite like a contract manufacturer or outside test lab.
@Cryptoman…Here is a link to a company that sells the ZigBee readers and tags for asset management. The also sell the SDK for writing your own programs. http://www.abrfid.com/Solutions/RTLS/Value-ZigBee
Jacob, we are talking in general about the TMS systems without focusing on vendor specific details. We don't want to look like we promote a specific product over another therefore we try to advocate only the common features across software.
If a solution for RFID based tracking is required there are numerous products out there from IBM, SAP etc. However, the TMS software under discussion in this blog focus more on the enterprise needs for planning and monitoring their daily shipments.
Hailey, you are welcome!
Yes, things do look a bit gloomy this side of the world. You would be suprised how technology actually helps enterprises in overcoming these odds by planning for contingencies.
Hi Douglas.
Thank you for your thorough response.
I presume each asset you want to track will have a ZigBee transceiver (?).
For typical assets of low cost, attaching a ZigBee transceiver to each would be a luxurious solution. However, for many high value items such as a $15K+ testing equipment, this could be a viable solution. If ZigBee transceivers are to be used in this network, you would not need RFID at all. Each ZigBee device will have a unique MAC address you can use to uniquely identify each asset.
With a ZigBee/Internet gateway that allows you to query each ZigBee node within your domain of operation. That way you can track each asset effectively. Each Zigbee node can create events and alarms to inform the database about the time of calibration, maintenance and rental dues.
Another interesting application could be to report the physical position of the asset that is tracked if the ZigBee node is equipped with an accelerometer. Most such platforms come with built in accelerometers these days. This feature would allow the node to detect that the equipment rests on its side or in any other angle at which it cannot be used. If this odd positioning does not change for a long time then one can infer that the equipment may be returned as it is no longer needed. That way the user of the equipment does not need to be asked whether the asset is needed or not.
Regards…
@Douglas
Thank you for this useful link. Looking at the price of the ZigBee tags, they are totally affordable and can be used fro tracking assets of low value as well. The SDK is a one off cost so the $650 price tag is not a showstopper especially if this tracking network will have many assets to track.
Regards…
@Cryptoman…those were my thoughts too. When the tags are reprogrammable, then the cost virtually is amortized away over time. I haven't read where RFID is being marketed for this specific application, but someone could wordsmith a brochure and sell systems as an aftermarket opportunity. Every major R&D company has some percentage of their equipment on a rotational basis via rentals.
Very interesting case study. Who would have imagined that with such a tight budget, 10% of it would be unaccounted for?
Its a good solution for just about anything that needs to be kept track of? What is a normal cost for a RFID system? (basically the reader and a set of tags)
@Mr. Roques…we had 2 million left of the 3 we started the company with. We were budgeted 1 million for 1 year of R&D and the remaining 2 was reserved for Marketing and Whiz Bang Dog and Pony shows to get our product visible to the big boys. We had just 39 people in the company when we were site surveyed and approved by AT&T who bought our first T1 23GHz microwave hops. 1 year later, Ronald Regan had one installed at his ranch, and 6 months after that we sold a bunch to the White House where all the communications equipment followed the President of the US on Air Force 2. It was a good strategy to hold back 2/3 of our venture money for Marketing. Our subsequent funding came from our IPO just a few short years later.
Tracking the movment of equipments inside any RnD organization is a must these days to make sure all the equipments are used if they are rented, all are caliberated in time to make sure the all the maasurements are accurate. The advanced technologies such as zigbee could definitely help to solve this.
“We don't want to look like we promote a specific product over another therefore we try to advocate only the common features across software. “
Sohaibmansood, RFID is not a vendor specified solution. It's a technology and anybody can build up on such technologies.
@Cryptoman…accelerometer…hmmmm very insightful. Equipment stacked on its side would most likely be in storage. I never thought of that. Thank you.
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