Logistics Transportation Management

This week HighJump announced a product partnership with MercuryGate to provide extended capabilities in TMS. See the press release: HighJump Software Expands Transportation Management (TMS) Capabilities Through Partnership with MercuryGate.

I would like to provide some additional commentary on this partnership and what it means for HighJump customers and prospective customers.

HighJump acquired our TMS capability in 2006 when we acquired Pinnacle Distribution Concepts and its Freight Logic product (which we rebranded HighJump Transportation Advantage).  HighJump Transportation Advantage has strong capability for domestic shippers who primarily ship outbound and need optimization across truck load and LTL.  However, HighJump Transportation Advantage has functionality limitations for inbound management, international shipping, multi-mode optimization, and capabilities for some logistics services providers (multi-client consolidation and optimization, cost allocation methods).  We feel that this product partnership with MercuryGate provides a leading TMS with capabilities that are expected from transportation supply chain management users with complex requirements.

HighJump will continue to support HighJump Transportation Advantage and the 33 customers using the product.  In fact, we have significantly invested in data center capability and transitioned the SaaS datacenter from Tennessee to Minnesota.  This datacenter move allows us to provide on-going support to customers running HighJump Transportation Advantage.

Through this partnership, HighJump will provide a re-branded version of the MercuryGate eTMS and MOJO solutions as part of our Supply Chain Advantage Suite.  The offering is called HighJump Transportation Management.  Workflow integration across inbound, yard, and warehouse is done through the HighJump adaptability platform utilizing the web services available from MercuryGate using Service Oriented Architecture (SOA) philosophies.  HighJump Transportation Management will be hosted in MercuryGate’s existing datacenter.  HighJump Supply Chain Advantage may be deployed on-premise or through our recently announced cloud deployment option.

For new customers we will offer HighJump Transportation Management.  We will also offer existing Transportation Advantage customers the option to migrate to HighJump Transportation Management through a migration program with preferred pricing.

Related Resources:

TMS press release

TMS web pages

Link to MercuryGate website

HighJump Software, a global provider of supply chain management software, announced today it is augmenting its existing capability in transportation management through a partnership with MercuryGate. The partnership will bolster HighJump Software’s current supply chain management software suite by adding new functionality for the management of international inbound and outbound transportation and robust transportation management functionality for third party logistics (3PL) providers.

To maximize the value from a transportation management system (TMS), shippers and 3PL’s are turning to systems that have capability for international and multi-mode shipments. The HighJump TMS can now coordinate and optimize complex multi-stop, multi-modal shipments, including ocean, air, rail, LTL, TL, and parcel. The solution also supports multi-currency and inter-geography shipments. Additionally, more companies are outsourcing their logistics to 3PL providers. The solution allows the 3PL to easily implement and on-board new clients and to leverage transportation across all of their clients reducing costs and maximizing profits. HighJump’s transportation solution continues to be deployed as a Software-as-a-Service (SaaS), which connects shippers with an extensive network of carriers and allows them to begin processing shipments using the system in a matter of weeks. The overall solution is web service enabled and utilizes HighJump Software’s unique adaptable architecture which allows companies to use their supply chain processes as sources of competitive advantage.

Read the HighJump Transportation Management press release.
 

I was asked by a new HighJump Software customer to provide the welcome keynote at their annual sales meeting. This company is embarking on a shift from being primarily a provider of air cargo transportation services to providing a comprehensive set of solutions for their current and prospective clients.  HighJump Software provides a key role in this transformation by providing the supply chain technology backbone for warehouse management systems and billing management systems.

I ran into several of the attendees the night before my presentation at the hotel bar where a good time was being had all.  Surprisingly, the audience was very attentive for my 8 a.m. breakfast keynote even though many of them had a late night prior.

Some of the key points of my presentation were:

The Use of Logistics Service Providers is On the Rise
There are multiple market studies that have shown that an increasing number of companies are likely to outsource their distribution and logistics solutions.  North America provides a substantial opportunity because the use of outsourced logistics is more prevalent in Asia, Europe and South America than it is in North America.

Economic Uncertainty Caused Businesses to Evaluate Outsourced Logistics Solutions, Warehousing Solutions and Transportation Solutions
It was reported that 3,000 domestic trucking companies went out of business in 2009 and over 1 million shipping containers remained idle as a result of the global recession.  While overall volume certainly presented challenges for logistics service providers, the uncertainty in the economy caused many companies to rethink outsourced logistics solutions, warehouse solutions, and transportations management solutions.  It also caused these companies to rethink their current relationships with their logistics service provider.  As many companies were forced to do a deep dive on their financial performance, many concluded that using outsourcing allowed them to shift from fixed to variable costs and resolve balance sheet and cash challenges by selling assets associated with their supply chain.

IT Enablement and Broad Solutions – a Recipe for Winners
Buyers of 3PL services consistently state that IT enablement is a major consideration in choosing a logistics service provider.  Cost continues to be the number one factor (as it  should be) but logistics services providers can “change the game” by offering broad set of solutions, powered by technology and command premium pricing for these services.

Related Resources:
- HighJump Solutions Page for 3PL’s
- HighJump LSP Datasheet
- HighJump WMS Brochure
- HighJump Billing Management datasheet
- Georgia Tech/Capgemini 3PL Study
- Eye for Transport Web Site resources
- Are 3PL CEOs Bad at Strategy? By Adrian Gonzales of Logistics Viewpoints

If you read any publication about application software, you will hear the term SaaS (software as a service). As the momentum for SaaS builds you might expect all supply chain logistics software to be offered in a SaaS model. Does that make sense? As with many good ideas, the hype builds so that people think the solution can be used to address any kind of problem, but this can result in the proverbial square peg for a round hole. SaaS is already proven in CRM and makes a lot of sense for Transportation Management solutions since you get a network effect by already having several carriers integrated. However, one of the core tenants of SaaS is a multi-tenant architecture with everyone running on the same software. This typically results in more simplistic less configurable applications. 

Could the SaaS approach work for WMS solutions? I have visited several warehouses and they are all different physical configurations. Even within the same company each warehouse has a unique configuration of dock doors, shelving, material handling, workers skill-sets, and space requirements. This uniqueness generally drives unique business process flows to optimize the flow of goods into and out of the warehouse. While some vendors have started offering WMS solutions in a SaaS model I believe it will be very challenging to manage the heterogeneity of requirements that are inherent in many companies’ distribution operations yet adhere to the core tenants of SaaS. While the time may come, SaaS is still the square peg to solve the WMS round hole.   

About 24 months ago at our midyear sales meeting I unveiled HighJump’s strategy to more aggressively target logistics service providers with our supply chain management software solutions.  The reaction from the sales team was mixed.  Logistics service providers are notoriously highly variable sales processes because the system purchase is typically tied to the acquisition of a new client for the logistics service provider.  The market data supported our strategy.  Use of logistics service providers is increasing worldwide as more companies outsource all or a portion of their logistics capabilities.

Times have changed.  The sales team now loves this strategy as logistics service providers are turning to HighJump Software for their supply chain logistics software.  The most recent logistics service provider to select HighJump is Cresent, a leading logistics outsourcing partner for a number of consumer goods companies.  Read the HighJump news release regarding Cresent.

HighJump WMS Warehouse Management System will automate many of Crescent’s previously manual warehouse processes and optimize the movement of goods throughout Crescent’s distribution centers, boosting productivity and inventory accuracy. The system will also enable the company to meet customer traceability requirements for batch and lot code tracking. Crescent will also be able to interface to customer ERP systems, a requirement that often previously hindered new business wins. The company will utilize HighJump’s Manufacturing Execution System Software in its co-packing operations, where it assembles product multipacks and builds product displays.

Why are so many logistics service providers turning to HighJump Software for their supply chain logistics software?  Here are few of the contributing factors.

Billing Management
HighJump Billing Management helps ensure maximum revenue and minimal billing cycle time by enabling activity-based billing of each client according to their distinct attributes. Appropriate charges are automatically generated for storage of goods and any other services you perform as a logistics services provider.
HighJump Billing Management’s capabilities extend far beyond billing and reporting. This comprehensive solution can also help make your business more attractive to current and potential clients by enabling you to offer more value-added services, superior inventory control and overall cost reduction—making you stand out in a commoditized logistics marketplace.

Dynamic Inventory Attribute Tracking
Logistics Service Providers have complexities of handling a variety of products with complex tracking requirements.  The same facility may manage perishable products that require best before date tracking, apparel that requires style color size tracking, and electronic products that require serial tracking.  With HighJump WMS Solutions all these attributes can be tracked in the same inventory model.  In fact, as the logistics service provider encounters uncommon data tracking requirements they can configure the solution to track these inventory item attributes.  Additionally any of these attributes can be shared with end clients through inventory visibility portals.

Integrated Transportation Management
Many logistics service providers in traditional public warehousing or in contract warehousing are branching into managed transportation services.  HighJump Software provides a transportation management solution used by many logistics service providers and is fully integrated with WMS warehouse management system.  The TMS support management of buy-side and sell-side contract rates allowing a logistics service provider to manage rates for contract carriers and separate rates for the price they sell the transportation service to their end client.

Flexibility to Meet the Changing Needs of Clients
The most important business differentiator for a logistics service provider is flexibility.  Existing clients frequently have new requirements and winning new business often requires changes to the operations and supporting systems.  HighJump has developed an out-of-the-box rules based architecture to allow logistics service providers to create unique rules that influence how a process works in the warehouse.  The rules can then be assigned to a client, an item, a vendor, or any attribute within the WMS warehouse management system.  Additionally if a standard rule cannot meet the specified requirement, a new rule may be created using Advantage Architect, HighJump’s workflow management adaptability tool.

Don’t you just hate starting a new job and getting assaulted by a never ending stream of acronyms?  I know when I started my supply chain career; it took me a while to sort out the difference between WMS solutions (warehouse management systems), WCS (warehouse control systems, TMS (transportation management systems), MES (manufacturing execution system software), etc.

If you are new to outsourced logistics, the bevy of terms can be equally confusing and overwhelming.  Below is some clarification about some common terms you will see as you start to explore this area:

• Third party logistics (3PL):  Organizations that provide outsourced logistics services, typically specializing in integrated warehousing and transportation services, although the portfolio of services offered continues to expand and can include additional services, such as freight forwarding and customs brokerage.
• Logistics Service Providers (LSPs):  An umbrella term for independent organizations that provide, for a fee, various logistics services, such as shipping, forwarding and contract warehousing. Can include 3PLs, 4PLs, freight forwarders and carriers.
• Fourth-Party Logistics (4PL)/Lead Logistics Provider (LLP):  In practice, this is a 3PL comprised primarily of computer applications and knowledge workers that manages other 3PLs and logistics service providers that supply logistics services to customers. A 4PL is often viewed as the same as a non-asset-based 3PL or lead logistics provider.  A 4PL also can manage other 3PLs to provide a global solution to customers.
• Non-Asset Based:  Provides logistics services, such as coordinating transportation, tendering/booking, routing and freight auditing/payment, but these firms do not typically own the warehouses, vehicles or other forms of transportation assets. These firms typically only have applications/systems, operational best-practice methodologies and logistics expertise in areas such as logistics operations, freight negotiations and customer service.

Hopefully this can help mitigate some of that initial frustration of outsourced alphabet soup.