Manufacturing & Logistics IT spoke with a number of vendors within the Transportation Management systems and services market about recent technological advances, how logistics professionals are benefiting from their solutions, the changing legal landscape and possible future trends.
Today’s transportation managers have to juggle a number of mission-critical disciplines. On the one hand they need to ensure they are providing goods in a timely manner to their end customers. And on the other, they need to seek to make their internal efficiencies as optimal as possible in order to keep costs to a minimum, while also ensuring their drivers are kept safe and keeping their carbon footprint as light as possible. In order to achieve all these objectives, logistics professionals are increasingly relying on Transportation Management solutions comprising a rich array of functionality. So what are the current trends and talking points within this fast-changing technology space?
Shaun Coughlin, managing director of tmWare, has observed that in recent years there has been an
increased level of expectation among customers and end users, driven on by the availability of information at their finger-tips. For example, he points out that smartphone technology has meant that people are never out of touch and can gain immediate access to a wealth of social interaction and business communication. He adds that this naturally filters through to what is expected from suppliers and the information they should make available in a timely and web-based manner.
Competitive pricing
According to Coughlin, one of the drivers for this technology has been the pressure on the logistics operators to provide this information but still retain a competitive pricing structure. “With the average rugged in cab device costing around £1000+, it is simply not an option for many logistics companies,” he said. “With 85 per cent of the UK adult population (Ofcom), owning a mobile phone, there is a ready-made platform for deploying real-time solutions. SMS POD technology means that a driver can send a text with details of the successful or failed delivery together with a name of who received the consignment. The system will use the time and date of the text to stamp the POD, thus enabling the customer to have instant visibility of delivery information and the logistics operator can release their invoice to the customer. Text alerts and updates can also be sent directly to the customer as well.” Conversely, Coughlin considers that there is an increased move towards the use of subcontracting to improve transport efficiencies. “In this case it is not always possible to deploy your in-cab hardware to these drivers and therefore SMS POD enables the logistics operator to retain the same levels of service regardless of the transport used,” he said.
As a Software as a Service (SaaS) solutions-provider improving communication between shipper and carrier in their transport processes, Transporeon maintains that Transportation Management is, and will continue to be, increasingly driven by new technologies, such as those within the mobile arena. “The nature of logistics mobility and therefore the current success of intelligent mobile devices will open new, value-added services to manage modern supply chains,” said Gitte Willemsens, marketing & customer care at Transporeon. In terms of the main driver for these trends Willemsens has no hesitation in saying that at the customer’s end this is, and will always be, time-saving and money making. “Time is money, and new technologies give millions of possibilities,” she said. “Everything that can be automated should be done this way. An example is that our shipper customers can have their loads automatically sent out via the Transporeon platform: directly out of their ERP-system to their contract based carrier. In this way, time won’t be wasted calling the carrier and sending them the transport information via fax or e-mail. Personnel can be reduced in this way, or, even better, the dispatchers can use this time to work on a more strategic level, or to spend more time on exception handling.” Additionally, on the environmental front, Willemsens reflects that new laws concerning CO2 calculation are increasing the need for system functionality that can facilitate this requirement.
The SaaS effect
Fabrice Maquignon, CEO at Transwide, believes that SaaS is probably becoming the leading way to
deliver Transportation Management systems. However, he adds that only a few companies are true SaaS (single instance multi-tenant) or have a significant network. “End-to-end connectivity between partners never has been so important as today,” he said. “Clients are in need of accurate data at any time to ensure efficiency of their business. Finally, advanced optimisation capabilities and optimisation algorithms become crucial for significant cost savings and gaining competitive edge.”
In terms of the motivating forces for these developments, Maquignon comments that customers have been trying to find the best compromise between costs and service capability. He adds that the ability to source new providers is key, as is the ability to optimise existing capacities and manage inbound as well as outbound flows. Maquignon also maintains that optimisation of loads or assets is a critical component with a short lead-time to ROI. At the same time, he points out that Transwide customers see a growing need for global implementation due to the fact that an increasing number of the company’s clients have operations on multiple continents.
James De Roo, business development manager UK at PTV Group, considers that one of the main talking points in the world of logistics at the moment is whether Transportation Management solutions should be hosted in-house or in the Cloud. “A large number of Transportation Management solution providers have developed Cloud-based solutions, and this can be a highly attractive deployment model when considering the benefits to the end customer,” he said. “For example, there is no need for lengthy implementation on premise. There is also little or no up-front capital expenditure required, and no need for regular upgrades – users just pay a subscription fee. PTV provides components for these Cloud-based solutions within our xServer toolbox.” However, de Roo adds that there are also a number of end users that prefer not to opt for Cloud-based solutions. “For example, Government agencies might require on premise solutions because of perceived security issues surround more open source models,” he explained.
de Roo points out that there are compliance and regulation issues concerning CO2 emissions that are
often talked about within the transportation industry, and that this debate may be one of the key drivers for the increased level of interest in Transportation Management solutions. “We don’t know for sure how these might change in the short or medium term, and how reporting requirements might change,” he said. “Also, we’re not sure whether logistics companies will also need to report third-party emissions. Nevertheless, these are all issues the UK Government is currently considering.” The Freight Transport Association (FTA) is working on carbon reduction schemes with the Government and with the transport industry.
de Roo adds that there is also the question of road congestion and other traffic issues, and how transportation professionals can better prepare for ad hoc situations in order to remain compliant while also saving time and cost. “This is where our xServer component toolbox comes in,” he said. “They can help give transportation companies an edge over their competitors by allowing them to integrate state-of-the-art geographic and logistic functions into their own software. Our xServers provide the technology behind our products in the form of efficient software components. By integrating these components into their own applications or in their company network transportation management solution providers, or the logistics professionals themselves, can quickly and easily extend their range of functions.”
Collaboration
Ronald Buijsse, director global marketing at Ortec, cites real-time traffic information for route planning as a recent innovation. He also points to collaboration between shippers and carriers to track and trace orders and share planning facilities. He explains that there is currently a successful project in Western Europe where carriers have access to the planning system of a shipper, to schedule the trips that have been appointed to them by the shipper. Buijsse also considers that mobility is an opportunity; quickly Apps are being launched, with tailored views on supply chain Key Performance Indicators. Additionally, he believes greater collaboration between carriers will be required from shippers. This for example, may result in a change from several one-pick-one (not full)-drop trips into multipicks-single (full truck)-drop trips, to avoid inefficient trips and reduce the number of trucks waiting at the dock for delivering.
In terms of drivers for change, Buijsse believes end-user requirements regarding Transportation
Management systems and their broadening logistics operations are changing. For example, he observes that there is a need for higher customer service levels and greater efficiencies in leaner economic times, as well as ‘blue-skies’ thinking on the part of vendors and their R&D activities. Additionally, Buijsse maintains that, for solutions vendors, it is important for them to focus on satisfying their logistics customers to ensure they retain their business, especially in these tough times. Buijsse believes there is therefore a need on the part of solution providers to focus less on cost cutting. Additionally, he observes that receivers of goods are increasingly demanding to be kept informed regarding delivery status in a real-time basis online.
Integration
In terms of the relationship between the more field-based Transportation Management systems and the back-office systems they integrate with, Willemsens points out that some 50 per cent of Transporeon’s shipper customers work with SAP. “These shippers are already used to the SAP environment and do not want to use extra applications to, for example, route their transports,” she said. “That’s why we have built an SAP add-on. This has numerous advantages for all parties: the IT-department is more than happy as they do not have to build interfaces, the end-user is happy as he does not have to switch screens and get used to a new system, and the logistics manager is happy as long as he can save costs once the system is up and running.”
Coughlin believes it is inevitable that the availability and reliability of wireless communication infrastructures will broaden the possibilities for integration and use. “Until recent years the use of a mobile network to communicate operational transaction both from within the warehouse/yard and out in the field would not be viable,” he remarked. “Now, the use of mobile networks is becoming an increasingly popular way to run an operation that would be traditionally done using WiFi infrastructure. Mobile tariffs have become so cost-effective to run that it is often a better alternative to the capital outlay involved with wireless access points and router hardware. It also means the devices are not limited to the range of the WiFi network, so can be utilised over a larger area and over multiple sites.”
de Roo considers that the logistics market definitely wants more of a turnkey solution. “There have been major improvements made over the past few years, but there still seems to be a lot of stumbling blocks out there where a lot of different pieces of the puzzle aren’t joining up as well as they could,” he said. “So, it’s about getting all the data together in a more seamless way with less data silos.”
Buijsse’s view is that the client/server is still key, while web user interfaces are next on the agenda for light users. Maquignon believes the ability to interface systems efficiently has always been critical. He points out that for a company like Transwide this has always been native on the platform. “Building solutions on a single communication platform is critical for seamless operations,” he said. “There is a lot of hype about mobile application and we start to see more of those deployed on board trucks.”
Legal matters
And have changes in transportation legislation influenced the development of Transportation Management systems over the past year or so? According to Buijsse the answer is in the affirmative. “Yes, working time regulations are now included more often in route planning,” he said, adding: “An eco-tax will be implemented in France in mid-2013, which will force shippers to pay additional taxes for the usage of certain roads, and to place GPS equipment in their trucks.” Willemsens believes that green logistics and the need for CO2 calculations is something that might have influenced the development of Transport Management systems further. “The fact that everything needs to be ‘green’ these days and shippers and carriers need to have calculations based on this might have pushed developments on this topic,” she said. On a global level, Willemsens considers that the new eco-tax in France will have impact on some Transportation Management systems.
Maquignon observes that the main changes are related to security in international transportation and in the Carrier Safety Act the USA. In Europe, meanwhile, the French eco-tax will have a major impact on the transportation industry, in his view. “Transwide is prepared because our solutions already have the ability to manage accessorial,” he said. “Moreover, our costs computation capabilities are very strong. All in all, new regulations are usually strong drivers for TMS investment.”
Differentiation
And what of some of the key points of differentiation within the Transportation Management solutions arena? Maquignon considers that one differentiator is functionality-driven; namely the ability to deliver on all processes – from sourcing to planning to execution to costs auditing to reporting & analysis. “Only a few Transportation Management systems have the ability to execute with some functional depth in all areas especially today,” he said. “The ability to run transport planning through a good optimisation process warrants fast ROI. Transportation Management systems need to be versatile and allow customers to work jointly with 3PLs and 4PLs directly with carriers, or manage their own fleet when necessary.” In terms of technology-driven differences, Maquignon maintains that it is still a case of On Demand TMS vs. ASP TMS vs. On-premise TMS. “We see that the case for On Demand is growing stronger as it allows greater flexibility, cheaper implementation and allows customers to evolve their processes more easily,” he remarked. “In the end it is not just the ‘pay as you go’ model which is attractive but the faster ROI, lower risk and lower maintenance cost.”
And in terms of service differences, Maquignon comments that when looking for a Transportation Management solution one should look at both the level of support that will be provided as well as at how one’s providers will be supported.
On the road to future development
And with a view to future developments and trends Coughlin points out that tmWare is looking at utilising smartphone technology in particular; to further enable more functions and features of the system to be available through this medium. He adds that, whether it is a case a manager logging in to his dashboard to get a quick overview of operational status while he is out and about, or fully featured apps that enable transactional operations to be performed, this is an exciting area. According to Coughlin it affords much potential for genuine benefit to the end user rather than just a fad like RFID. “RFID is great concept but how many people actually use it?” he remarked.
In de Roo’s view, the Cloud will definitely continue to become more popular. He also maintains that the continuing integration of Transportation Management functionality with mobile devices and more general centralised integration of data will become increasingly prevalent. “It seems to me that we are going back to the old mainframe type solutions; rather than allowing much of the transportation-related data to be held in silos,” he said. “There is certainly a strong desire for all this information to be pulled back into a more centralised data hub.”
de Roo added that one of the biggest areas of focus within the transportation management arena is driver performance, and solutions that can help logistics companies to better track driver performance. “This will undoubtedly become even more important in the future,” he said. “One reason for this is the desire to ensure driving time is best utilised, thus saving on fuel. Also, companies want their drivers to drive as safely and responsibly as possible, therefore reducing vehicle wear and tear as well as having fewer accidents. This last point can also, of course, have a bearing on the insurance premiums a logistics company has to pay.” According to de Roo, the further reduction of vehicles’ carbon footprint may also become an even greater requirement in the near future. “So, looking at the broad picture, transportation management solutions are increasingly required to save time and cost as well as ensure greater environmental responsibility as well as optimum safety on the road,” he stated. “And, of course, achieving such overall cost savings can mean the ROI in logistics companies’ transportation management solution can be achieved within a compellingly short timeline.”
Buijsse believes tailor-made reporting, possibly via Apps on mobile devices, will become more prevalent. Additionally, he considers that there could be an upcoming dearth of drivers, which may force shippers to move partially back from rented fleet to private or dedicated fleets, to secure short term carrier availability.
Changing demands
With regard to the end user, how might their business or operational requirements change over the coming year or two? Buijsse points to backhauling, the avoidance of sub-optimisation and the inclusion of workforce scheduling within system functionality, together with the use of more parameters, to make planning as realistic as possible. According to Maquignon, the regulatory environment may provide more constraints and drive a growth in intermodal transportation. He also considers that high oil prices will surely revive initiatives for collaborative logistics; hence driving the need for Transportation Management solutions that are fully capable of letting partners share environments. Regardless of what the future holds, there can be no doubt that today’s state-of-the-art Transportation Management systems are reaping major time, cost, safety and environmental benefits for logistics professionals, not to mention their invaluable benefits in keeping businesses on the right side of legal compliance.
Transportation Management in action
The following case studies illustrate how Transportation Management solutions are delivering real benefits to a range of logistics operators:
Transporeon case study – Procurus
With Transporeon working with drinks manufacturer Bacardi across Europe, a UK link was the logical next step. Over the past year Transporeon has provided its transport assignment system to specialist 4PL provider Procurus, logistics partner for Bacardi, the world’s largest privately- and family-owned spirits provider. Procurus has staff embedded in Bacardi operations, handling all movements around the Continent. Transporeon’s UK key account manager, Charlie Pesti, worked closely with Graeme Connor, Procurus’ business development manager and his colleagues, to establish a 4PL solution to the demands of distributing Bacardi products around Britain. Connor inherited the plan to link with Transporeon when he took up his post with Procurus in August 2011. Procurus is using Transporeon’s No-Touch Order module. The module has a range of major features. Among those particularly attractive to Procurus is the automated transport allocation, based on defined criteria with no need for manual intervention, with transport planners freed to concentrate on exceptions. Procurus is also using Transporeon’s Time Slot Management module, which ensures that loading and unloading slots can be booked online, carriers can be tracked on route and can quickly get on their way again after arrival. The system will be used too for monitoring and checking security information, which is required in moving high value products such as alcohol. Procurus and its carriers are now benefitting from reduced time, efforts, costs and increased productivity as well as reduced empty miles.
Transwide case study – Ontex
Ontex is a European provider of hygienic disposables (such as nappies and wipes, feminine hygiene and adult incontinence) for the private label sector. Utilising 11 manufacturing facilities, these facilities are strategically located to enable the business to provide timely deliveries of all products to customers. Ontex recognises that delivering the product in time is a key feature for its customers and as a result it has developed a high quality supply chain organisation to ensure the highest levels of customer service. By using the Transwide communication hub, Ontex is able to manage and monitor the inbound and outbound traffic at 20 locations, including transport booking, load planning and full track & trace visibility once the shipment has left the Ontex premises. Most of the data flows are currently automated through electronic bi-directional messaging exchange. The key benefits of Transwide include time efficiencies in transport ordering process. This allows Ontex more time to focus on its service performance and customer satisfaction. Another benefit is better planning and managing of human & mechanical resources.
This includes:
- 10 per cent increase in quantity loaded with the same operational resources.
- 10 per cent increase in on-time delivery.
- Over 50 per cent decrease of waiting times.
Additionally, track & trace functionality allows a very fast response time to customers and improves exceptions management and issue resolution. This results in reduced complaints from customer on delivery delays. Also, carrier acceptance has guaranteed full project ROI; none of the carriers have refused to use Transwide. And 95 per cent of carriers book time slots at pick-up locations and comply with their own commitments, leading to a substantial reduction of demurrage costs. The remaining issues are tackled through continuous improvement and based on pro-active exception management.
tmWare case study – Sea Cargo
Sea Cargo, a North Sea shipping company based at Immingham docks, uses tmWare to receive cargo in, manage and plan orders out. A lot of the transport work is subcontracted out, which means it is not possible to supply each subcontractor with an in-cab device. Therefore, tmWare’s POD SMS provides a platform for maintaining the real time communication of successful deliveries. Steve Lingard, IT development manager at Sea Cargo commented: "Not being an operator of a large fleet of vehicles Sea Cargo relies on subcontracted haulage. The solution to send POD information over SMS allows these subcontractors to maintain reliable and up to date communication directly with our transport applications. As every haulier already has a mobile phone there is zero investment required from the subcontractor and allows Sea Cargo to operate as if having an in-house haulage department using expensive in-cab hardware. We also see the use of smart phones to greatly increase over the coming years which will allow even more innovation and functionality in this area.”
PTV case study – Isotrak
British company Isotrak specialises in field of telematics and transportation software. Product manager Jon Hannah is responsible for assembling products that meet the customers’ goals and expectations for their business. “To this end we provide software innovations that drive Isotrak‘s offerings forward,” said Hannah. Mapping performance was one of the features that Isotrak wanted to improve: “The performance was too slow when customers wanted to view the current position of their vehicles or analyse routes generated earlier in the day,” Hannah explained. In addition, customers had seen the advent of Google and Bing mapping. “Therefore, our customers felt features like aerial mapping would be useful,” Hannah continued. “They also wanted to introduce polygon geofences as an improvement on circular ones, enabling them to better define the areas within which they search for addresses.” A research project was undertaken by the Development Team to find out how to integrate aerial mapping and polygons into the software via OpenLayers. Isotrak chose PTV xServers to optimise its software solution.
PTV xServers are powerful modules that enable users to easily integrate geographical and logistical functions into their client server architecture. Detailed NAVTEQ data ensures precise geocoding and map display as well as accurate routing & tracking. Hannah commented: “The components contain many functions which we can use for our software. And we truly appreciate the partnership approach taken by the PTV team which will serve us well on projects going forward.” Due to the PTV xServers Isotrak was able to not only solve the initial problems, including mapping, the provision of aerial mapping, enhanced geographic search and the integration of OpenLayers for map overlays, but also provide the new Route Sequence Planning functionality. It includes valuable information on vehicle profiles, dynamic vehicle rerouting, HGV-specific restrictions and Traffic Patterns. Users of the software, both internal and external, got to grips with the software extremely quickly.
Ortec – TNT case study
The Franz Edelman Award was presented to TNT Express as the company – together with a team, including Ortec, and by using Ortec tools – saved over 200 Mln euro in the past 5 years on networking and routing optimisation projects.
Ortec – Walmart study
Earlier this year Walmart announced an improvement in the efficiency of its private fleet by almost 69 per cent last year compared to its 2005 baseline. Part of these savings has been realised by the company-wide implementation of the Ortec Vehicle Routing and Ortec Load Building solutions. An excerpt from the Walmart report reads: “Throughout our network, we delivered 65 million more cases, while driving 28 million fewer miles, by increasing pallets per trailer and better managing routes. The heavier loads have minimal impact on our fuel-efficient equipment, which includes an average tractor age of three years and the addition of more than 13,000 skirted trailers. Our network efficiency improvement equates to avoiding nearly 41,000 metric tons of CO2 emissions, the equivalent of taking about 7900 cars off the road.”
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