The tech industry is no stranger to inflated valuations and over-priced acquisitions that ultimately destroy shareholder value. One can’t help but ponder these facts when observing the bidding war being waged between industry titans Hewlett-Packard and Dell for a previously little known data-storage company, 3PAR. Prior to Dell’s initial acquisition announcement on August 16th, 3PAR had a market capitalization of around $600M. As the bidding war has played out, 3PAR’s valuation has rocketed to over $2B. All of this for a company with just under $200M in revenue in fiscal 2010 that has yet to register a profit.
To be clear, this is not a commentary on the wisdom of this prospective acquisition. However, it provides a good opportunity to consider why such an intense battle would be fought over a relatively obscure company. Finding growth opportunities is challenging for large companies. HP and Dell’s dogged pursuit of 3PAR supports the view that cloud computing is an area of intense interest to the firms and that it is viewed as a growth vehicle.
Cloud computing solutions (aka hosted solutions) offer an alternative to on-premise systems that have traditionally been deployed. Some of the many benefits of the cloud deployment model include lower total cost of ownership (no upfront capital expenditure), reduced reliance on internal IT staff, and the ability to easily stay current with software/hardware updates.
In the supply chain execution space, cloud computing solutions have been around for some time with transportation management systems being the most widely adopted. As IT budgets and resources continue to tighten, companies are looking hard at this model for a wider range of solutions. For example, demand is increasing for full-function, best-of-breed warehouse management systems that go well beyond basic inventory control systems that have historically been on offer as a hosted solution.
Time will tell if this particular acquisition generates shareholder value for the ultimate winner. What is certain, is that cloud computing is an area that is expected to continue to grow quickly. Having the heft of an industry leader such as Dell or HP leading the charge can only accelerate adoption and growth of cloud computing for a wider variety of applications… including supply chain execution solutions.
I was reading an article a few weeks ago which said that by the year 2020 most users will be living in the cloud. This comes as no surprise when we look at the way technology is trending. More and more users everyday are adopting cloud-based applications for their personal use, and much of the reasoning behind using a cloud-based format for personal applications is applicable to business as well.Not too many years ago I recall a time when essentially every application on my computer was purchased from a store and came on a disk. The Internet was either nonexistent or too slow to support any large applications. We have come a long way to the point where purchasing programs from a physical store rather than the "app store" is unheard of. The software now is almost always free to start and then you either pay a monthly fee later or pay by letting advertisers put their message in front of you. This has made most software much more accessible to everyone who wants to partake.
• Storage Space
With all of the cloud-based programs I use, I know that I could not support them if I had to host all of that information on my physical PC. The ability to access information stored on servers makes it possible to utilize a much greater amount of information because I don't ever have to worry about whether I have enough space to house another application and its contents.
• IT Workload
I don't know about you, but my personal IT team is pretty small, consisting solely of typing any problem into Google and hoping it comes up with the right answer. That said, the adoption of cloud-based applications had lessened the requirements of the end user to keep the system up to date. Rather than having to download large updates and spend the time installing them, users log in and the updates and changes have already been applied. Now my personal IT team is able to spend time doing more useful things like checking the baseball scores from the previous night.
Related Resources:
Link to CNN article: “Experts say we'll be working in the 'cloud' by 2020”
HighJump Warehouse Management in the Cloud
Special Report: WMS In the Cloud - Real-World Option or Fluff?
I have to admit I am not an avid World Cup soccer fan...but I have enjoyed the coverage and subsequent drama unfold with a few of the higher profile upsets and controversial rulings on the field. The ironic story regarding the English team's history with the "Ghost Goal" certainly caught my attention (England clinched its only World Cup victory in 1966 with a similar dispute goal line marker) as the one disallowed versus Germany, en route to a 4 - 1 German victory.What I found particularly interesting was reading how Sepp Blatter (FIFA President) first maintained the "human aspect" of the game was key and could not be replaced, only to later change positions and seem open to technological advances to assist the officials.
http://www.guardian.co.uk/football/2010/jun/29/sepp-blatter-goalline-technology
How does this relate to direct store delivery (DSD) companies and their challenges? It seems that Sepp did some soul searching and came around to the concept of at least considering, if not implementing, technological advances. So what are some signs for DSD companies to recognize when it is time to move forward with a project that advances their use of technology? Below I talk about five points that really should trigger at least an investigation into what alternatives exist.
1. Hinderance or Help?
Your company bought that software (route accounting systems (RAS), mobile sales solutions, or maybe an inventory application) or possibly hardware with the intent of helping your employees get the job done faster and better than ever. At first things were great and you saw immediate improvement in your daily process, but those days are gone. Today you are more frequently forced to create work arounds or miss opportunities all together due to limitations in your technology suite rather than it helping you achieve improved results.
2. Reliability Issues?
How often do you hear your route drivers complaining of having to "re-key" a route due to data loss? Or perhaps a rushed purchase order has been placed due to an unrealized inventory issue from a batch posting failure? A better question would be - how many times can you let this happen before you realize there is a problem? Whether it is hardware or software that is letting you down, when these solutions start to impact your business due to failure it may be time to act.
3. Falling behind competitors?
When the calibre of your lawn falls behind that of your neighbors there may be some good natured teasing involved, but not much more. When your ability to deliver goods, invoice accurately or manage your supply chain falls behind your competitor you have a much more serious issue to deal with. In today's economy DSD providers are having their margins tightened while dealing with increased costs, so this is no time to give your competition a head start!
4. Increasing Cost of Ownership?
What did your IT staff look like when you first implemented your route accounting system? How did you roll out sales process changes with your route salesmen? What budget do you allocate to these activities now? Upgrades, maintenance, support and enhancements are all costs that hit the bottom line. If your IT spend continues to grow but your ability to handle new functionality (or possibly even maintain the status quo) hasn't progressed, isn't it time to start asking why?
5. End of Life?
Perhaps one of the more feared phrases of the IT world, if the above listed points haven't triggered the proverbial "spidey senses" then this one surely will start your temperature to rise. When Microsoft or IBM delivers the notice that product "X" is getting the End of Life treatment you may be able to stretch your utilization past the date, but if anything goes wrong the costs to support / correct / replace will be substantial. Better to act quickly and start identifying alternative paths to support your business.
The list of compelling events for your operations may be considerably different depending on the circumstances in which you exist. But by reading this, I trust that you are actively monitoring where you stand in your technology's life cycle...and good luck making your decisions!
“Gary and Amy are valuable additions to the HighJump executive management team and bring extensive experience to their roles,” said Russell Fleischer, CEO, HighJump Software. “Amy has served in many key positions at HighJump that make her uniquely suited for this newly created executive position, and Gary has extensive sales leadership experience in the supply chain software industry.”
Read the press release.
HighJump Software is proud to have been named to the Inbound Logistics Top 100. Every year, Inbound Logistics editors recognize 100 logistics IT companies that support and enable logistics excellence. Drawn from a pool of more than 300 companies, using questionnaires, personal interviews, and other research, Inbound Logistics selects the Top 100 Logistics IT Providers who are leading the way in 2010. Editors seek to match readers' fast-changing needs to the capabilities of those companies selected. All companies selected reflect leadership by answering Inbound Logistics readers' needs for simplicity, ROI, and efficient implementation.HighJump Resources
Watch a Video: 3PL achieves supply chain success using the HighJump Software warehouse management system (WMS)
Watch a Video: Fox Racing doubles distribution productivity with the HighJump warehouse management system (WMS)
Greetings from 35,000 feet! I am on my way to the west coast for meetings with another prospective HighJump warehouse management system (WMS) customer. This visit will likely be consistent with several meetings recently with large companies who are looking to standardize their WMS platform and move away from homegrown systems. This sounds like a fairly straightforward proposition…until you get into the details.
In each of my meetings, the company has strong feelings that their current homegrown WMS system provides them a true source of competitive advantage. It is not that the system contains “industry best practices”; these homegrown systems enable distribution processes that are actually sources of differentiation from competition. The processes and the systems supporting them are years in the making and unique to each business. By definition, many of these competitive advantages will not be found in traditional commercial off the shelf software – they are proprietary, confidential, and not available to everyone in a given industry.
These companies are pursuing commercial software as a means to reduce IT complexity and reduce total cost of ownership – common objectives of a WMS standardization initiative. However, there is reluctance to proceed based on the sources of competitive differentiation these companies have with their homegrown systems. In the traditional enterprise software approach, these companies will be forced to purchase commercial software, pay exorbitant fees for customizing it to enable their competitive advantage processes, pay exorbitant fees to upgrade (or elect to stay on old technology), and risk that their technology vendor will think their practices are so great that they should be put in the next version of the “standard package” (thus making the competitive advantage available to everyone).
HighJump offers a unique approach.
HighJump’s Supply Chain Advantage suite is architected with an expectation that you will want to enable business processes that are sources of advantage on our technology stack. It is HighJump’s philosophy that 80% of supply chain practices are not sources of differentiation and should be covered by industry supply chain best practices enabled with standard product. However, we also expect that there are 20% of your supply chain processes that are potential sources of competitive advantage. For this 20%, we provide a flexible workflow architecture that allows end users to modify the workflows in the product to support their sources of competitive advantage.
This presents a “best of both worlds” value proposition for our customers. Customers moving off homegrown systems get the benefits of commercial software (new releases containing technology and functionality updates, a worldwide product support organization, and technology partner that will stand by them in the long term) with the flexibility to support their business processes that are sources of competitive advantage.
Related Resources:
HighJump Adaptability Datasheet
GM2 Video: 3PL achieves supply chain success using the HighJump Software warehouse management system (WMS)
Our New Partnership with MercuryGate: What It Means for HighJump Customers and Prospective Customers
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:
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.
With cloud computing, the WMS vendor hosts the software application and hardware infrastructure. The customer accesses the WMS via a Web browser. Cloud-based solutions are becoming a more common alternative to on-premise software as businesses seek ways to reduce IT requirements and simplify maintenance and upgrades. Because all system infrastructure is based in an off-site, secure data center, cloud solutions also eliminate up-front capital expense and reduce the risk and time required by on-premise implementations. HighJump WMS in the cloud is ideal for growing businesses because the Amazon.com cloud is elastic and scalable; more power and storage is available as demand changes or the business expands. One simple monthly subscription covers maintenance, upgrades and support.
Read the press release.
What’s so difficult? If you’re a third-party logistics provider (3PL)/logistics services provider (LSP), all you need to do is provide efficient warehouse management, exceptional inventory visibility, seamless freight management and timely and accurate 3PL billing. Oh, and you need to do it all more cheaply – and just plain better – than your customers can do it themselves. Bit of a tall order, especially when you’re trying to post your own profit too!
I imagine trying to stand out among other 3PLs is similar to any other more commoditized service. You’ve got to: (1) Find a way to attract new customers and (2) Keep the customers you already have so happy that they’ll gladly tell their peers about how fantastic your services are.
One of the advantages of being in the fast-growing logistics services space is that technology providers have their development teams working overtime to create tools to make things easier for you. With modern supply chain management software, you have the means to achieve those two huge tasks. Here are a few examples.
· Facilitated on-boarding new customers – the quicker you can do it, the sooner you can get paid, right?
· Getting the billing right – new automated 3PL billing technology is making it simpler make sure you are getting paid for each service you provide, and that you can easily account for those charges. You can also preset billing rules at a very granular level – a detail which might help your sales team seal a few deals?
· Tracking inventory attributes – it’s the nature of your business – every customer wants to track different attributes, even if the items are exactly the same as another customer. Now you can set up detailed – and different – rules for each customer.
· Offering more value-added services – the best way to set your business apart from 3PLs that just provide shelf space. These value-added services can be anything from repackaging to relabeling, kitting and light manufacturing. Adaptable supply chain technology can support the adding of new services that your customers are waiting for.
Guess it’s just perspective…it’s a challenging, cost-conscious industry, but you’ve got access to the technology to let you go grab your share of new business.
Related resources
Special Report: Four Ways 3PLs Can Harness Technology to Attract Customers and Drive Profitability
HighJump Software announced Shearer’s Foods Inc. is experiencing improvements across its operations after implementing HighJump Route Administrator and HighJump Route Assistant. The company utilizes the HighJump route accounting, mobile sales and mobile delivery solutions to support 100 direct store delivery routes across Ohio and Pennsylvania.
Shearer’s Foods sought to replace its 30-year-old, antiquated system after it became too costly to maintain. The company searched for a next-generation route accounting system to automate its manual processes and provide visibility into its daily operations. Shearer’s Foods selected HighJump Route Administrator and HighJump Route Assistant for the software’s depth of functionality and ability to meet the company’s key requirements.
Learn more about Shearer's Foods' success with its HighJump route accounting system, mobile sales and mobile delivery solutions.
I spent some time last week with a HighJump Software customer who is considering further expansion of HighJump WMS solutions in their distribution centers. The customer is undertaking a massive ERP program that will allow the ERP system to be the IT backbone of their worldwide operations. They are also evaluating WMS solutions from this ERP provider.
In a meeting with senior IT leaders of this organization, I explained that I was highly confident the outcome of their pending due diligence regarding total cost of ownership (TCO). I contend that a best of breed solution will result in lower long term costs for this IT organization. Here are a few things that make me confident in my position:
Best in Class Functionality
While ERP-based WMS solutions have advanced significantly, they are limited to the “classical” warehouse operations including receiving, put-away, inventory control, picking and loading. Supply chain best practices such a labor management, slotting management, advanced wave planning, and last mile delivery are not traditionally supported with ERP WMS solutions. This means that when supply chain operations teams demand these capabilities, IT organizations are forced to address them with expensive customizations or bolt-on solutions with multiple integration touch points.
Upgrades
A WMS solution typically has a 10 year lifespan. In this lifespan a WMS could be upgraded five times. ERP upgrades are generally more expensive to upgrade because of the interdependencies between modules and re-application of source code customizations. Additionally, corporate IT governance and change management processes often make it difficult to upgrade a single module. Therefore the business users may be forced to wait for new features because of dependencies on modules that have nothing to do with distribution and logistics. View this video to learn more about HighJump’s approach to simplified upgrades.
Adaptability Tools
If your organization views distribution as a source of competitive advantage, then ERP-based WMS could be problematic. By definition, a competitive advantage must be unique to the organization. Business processes available in commercial off-the-shelf software packages (like ERP) therefore cannot contain business processes that are sources of competitive advantage.
To really ensure you have the flexibility to maintain and create further sources of advantage in your distribution operations, your supply chain logistics software must have the ability to create processes that are unique to your business.
HighJump has a unique approach that allows customers to define unique workflows that does does not involve any source code modifications. I am not aware of any ERP based WMS solutions with a similar architecture.
Without this architecture it can be very expensive for IT organization to deliver these workflow changes.
I recently received a direct mail marketing piece from a HighJump Software competitor. The mailer included a press release announcing that this company had “enhanced direct store delivery integration” and a one page datasheet which described a direct store delivery value chain as manufacturing + regional warehouse + mobile resources + retail shelf.
HighJump Software is the North American market leader for direct store delivery software solutions. If our primary competitor in the warehouse management systems market had encroached on our market position I needed to know. Perhaps they had acquired a route accounting solutions provider or acquired a provider of mobility solutions for mobile selling and delivery at the retail location. I consulted a trusted industry analyst who confirmed my suspicions… this was marketing hype and this company’s approach to direct store delivery still had significant “holes.”
Anyone familiar with the value chain of direct store delivery companies knows there are some specific complexities that must be addressed in order to have “comprehensive coverage across the extended supply chain.” Here are some things companies should consider when search for direct store delivery software solutions:
Certified Route Accounting Systems
Route Account Systems are unique software systems to manage the complexities of route-based sales and delivery. They typically manage the entire order-to-cash cycle and are geared toward the world where sales, inventory, and business metrics are all tied to a “route.” Although traditional ERP systems can be used for route accounting systems, they typically require customization to deal with complex pricing/promotion, cash settlement, truck inventory, and supplier e-commerce integration. To further understand the complexities in the beverage value chain read It is Hard for Anheuser-Busch to be Procter and Gamble.
Mobile Sales and Delivery Applications
Success or failure in a direct store delivery business is determined at the store shelf. Direct store delivery companies have large workforces of mobile sales and delivery professionals who need to be equipped with mobility technology for them to effectively accomplish their objectives. HighJump Software provides a comprehensive suite of mobility products which support industry best practices for order capture, goal-based selling, delivery tracking and cash settlement. For more details on these solutions read about our latest mobility suite product release HighJump Software Enhances Mobility Solutions With New Release of Mobile Route Sales and Delivery Software Suite.
Load Optimization
Optimized loading of side bay beverage trucks can be complex. While there are numerous packages for creating optimized load plans of traditional van trailers or flatbed trailers, optimizing for side bay beverage trucks is another animal. Additionally, this business problem becomes even more complex when you have a “peddle” environment (driver selling off truck without pre-sold orders) and driver preferences must be taken into account at the load and pallet level.
I think the moral of the story is “don’t believe the hype.” Direct store delivery software solutions are specialized for the unique needs of this industry. Direct store delivery software solutions deal with complexities of supplier integration, cash settlement and truck inventory. A WMS, TMS and retail workforce solution will not meet the needs of most food and beverage distributors in their direct store delivery operations.
HighJump’s new VP of Sales, Jim Bork, was in my office the other day and asked me, “Why don’t more people implement our Yard Management solution?” After hearing a customer case study at Innovation 2009, HighJump’s annual user conference, where the customer claimed benefits from yard management in excess of $1 million, Jim wondered why all of our customers wouldn’t leverage this technology. As I started thinking about this question, I realized that maybe companies are looking at the wrong business case for yard management.
What is Yard Management?
Yard management is a kind of supply chain logistics software solution that tracks trailers and containers in a yard outside of a manufacturing facility, warehouse or distribution center. Using workflows, the software can support the following activities:
· Driver check-in or check-out including collecting all relevant data from the driver and tying the arrival to a specific dock appointment
· Optimized storage of trailers or container within the yard. Trailers with “hot” product can be moved directly to dock door locations. Other trailers can be dropped in the yard for unloading in the future.
· Visibility to trailer aging is provided so companies do not incur demurrage charges for holding a trailer in the yard for excessive time periods. (Trailers and containers are typically owned by a 3rd party and holding them for too long can trigger a charge called demurrage).
· Optimized work instruction is provided to yard drivers for moving trailers to and from dock door locations.
Work Optimization – The Old Thinking
Yard management provides benefits on multiple levels, however, most supply chain management professionals first think of the work optimization as the primary benefit. Work can be optimized creating labor savings and more efficient flow of inventory. However, if you “run the numbers” on a typical yard, labor savings alone will not drive a strong ROI on a labor management system.
The Safe Thinking
Safety and security has become a primary concern for many businesses in light of focus on national security in many countries. A yard management solution will also provide benefits in the area of safety and security. Yard management systems help facilitate a single point of entry and exit from the yard. Additionally, a yard management system will systematically collect information about specific loads that could be used to comply with internal or homeland security requirements. While safety and security are important it is difficult to build a hard business case around these factors.
Inventory Optimization – The New Thinking
Companies with the most successful yard management initiatives find ways to optimize inventory across the yard, manufacturing facility, and distribution center. As companies in the US and Western Europe are transitioning from manufacturing-centric to distribution-centric, inventory in the yard has become a serious issue. Import-centric supply chains leverage low cost of materials and product, but suffer from long lead times and product obsolescence. Often this results in large amount of inventory being held in containers in the yard.
The best way to build a business case for a yard management system is treat your yard like an inventory buffer. An inventory buffer in the yard will allow many companies to carry additional inventory without facility expansion in their distribution center.
An additional inventory buffer provides significant benefits in terms of supply demand matching and perfect order performance.
HighJump has one yard management customer who drops orders to the warehouse for fulfillment even when the expected inventory only exists in the yard. This means they must coordinate a trailer move of inventory to the dock door, cross dock the needed product, and marry it with the other product required for the customer’s order. Clearly, this logistics capability is something to build a business case around!
So before taking your yard management system business case to the corner office, ensure you have considered all aspects of intelligent inventory positioning and supply chain management best practices that can be gained from a yard management system.
Every conversation I have had with a new customer around automation always seems to include some discussion of reducing paper. Many customers have been extremely successful in reducing the paper that is generated internally. Some technologies that are specifically using direct store delivery software include DEX and/or EDI to limit or eliminate customer-side paper. This works very well for large customers. With that said, it is amazing how often these electronic transactions are supported by a printed form. It’s a bit crazy if you really think about why these systems were developed in the first place. Most convenience stores, gas stations and restaurants are still operated by local owner operators and these technologies are not readily accessible to them. They are stuck with, wait for it … more paper.
Let’s take a new millennium look at what customer-facing paperless could mean in the route accounting systems world. Most people today are getting used to receiving their bank statements and various types of bills in electronic format. When I rent a car, I almost instantly receive an email with a PDF electronic version of my final invoice. Strangely, the demand for this in mobile delivery, sales, and service has not been strong, but I believe it is coming. In the wireless environment, we can capture orders, convert them to invoices, take and apply payments and then capture a signature. This is all transmitted back to the host in real time. Imagine the owner of the store or the accountant receiving that invoice electronically just as fast. There is no chance that the sixteen year old working the counter at the time loses that document, and it provides an electronic delivery trail.
Sometimes we over-think these things. Simple solutions often yield the biggest impact. A toaster isn’t complex but it is a lot easier than lighting a fire to make the bread crunchy.
Photo via Flicr user luxomedia.
"Is it live, or is it Memorex?" - I remember a set of commercials from a long time ago were you couldn’t really tell if the sound that broke the glass was real or a virtual sound from a Memorex tape.
It is the same with Virtualization in IT today. You really can’t tell the difference between an app running on a physical or virtual machine. We have seen this trend growing more and more over the last few years. Virtualization provides many benefits to a company including “greener IT,” lower costs, server consolidation, higher server utilization, faster provisioning etc.
There are also many layers that are benefiting from virtualization in IT other than just at the server level such as storage, networking and others. Virtualization also is a key enabler for cloud computing which is a topic for a later discussion.
HighJump Software fully supports our software in a virtualized VMWare ESX environment, and we utilize virtualization heavily in our own development processes including testing and automated builds. The leading vendor in this space is VMWare but there are many other providers that see the trend increasing and are now in the space in a big way including Microsoft, Citrix/XenSource, IBM, Novell and many others.
I would encourage anyone just learning about virtualization to research the different options and vendors and start developing a strategy for deployment and management in a virtualized world.
So the next time you are using your favorite software from your corporate IT systems, you may wonder “Is it live or is it Memorex?”
I was talking with a friend the other day and the topic of Facebook came up. This friend had joined Facebook but become disengaged quickly saying he just didn’t “get it.” Rather than embracing the technology, engaging with friends and trying to figure out why millions of people are flocking to social networking, he threw his hands in the error in disgust. It reminded me of my grandmother trying to program the VCR “back in the day.” My friend is inflexible, unable to change, and unable to support the new process of communication.
Many warehouse management systems suffer from these same challenges – inflexible, unable to change and unable to support new communication processes.
Many enterprises implemented WMS Warehouse Management Systems in the late 1990’s and early 2000’s to support their growing operations. While the initial value and return on investment of these systems has been achieved, the current state of these systems is a concern for many IT and supply chain executives.
Changing the system to meet new operational needs.
Your distribution and supply chain operations are probably significantly different than when you initially deployed your WMS warehouse management system. Product mix changes, increases in volumes, changes in material handling equipment and new distribution strategies can have significant impact on warehouse operations. Many warehouse management systems provide you with just two options to address these business changes: pay the software vendor to the customize the software for your new process, or develop a workaround outside of the system. Neither approach is optimal. Obtaining approval for software change orders is increasingly challenging as IT organizations are forced to look at every opportunity for cost reduction. Enabling processes with system workarounds results in quality issues which impact customer satisfaction. Many companies operating aging WMS technologies suffer from these challenges.
Relatively high total cost of ownership.
It is widely known that WMS warehouse management systems are one of the most customized software applications in the enterprise. This is especially true of warehouse management systems implemented five to ten years ago. Not only are many companies dependent on the vendor to make ongoing system changes, the cost of system upgrades is extraordinarily high. Relative to other enterprise applications, aging WMS platforms have high upgrade costs because source code modifications must be reapplied to future versions. This is often a risky process which includes significant consulting hours from the software vendor. Additionally, WMS warehouse management systems purchased five to 10 years ago was significantly more expensive than WMS warehouse management systems purchased today. Because annual maintenance and support fees are typically based on a percentage of the license fees, many enterprises with aging WMS technologies are paying significantly higher fees than enterprises who recently implemented modern technology platforms. It just doesn’t make sense, why should you pay more for an older platform that doesn’t fit your business?
Uncertainty about your vendor’s strategy for the product line.
Many WMS Warehouse Management Systems implemented five to ten years ago were provided by vendors who are no longer market leaders in WMS. Many of these vendors have been acquired by financially focused firms who collect software maintenance and support fees without re-investing in product development and customer service. In many cases, it is unclear how long the vendor will provide software updates and technical support on these product lines. Each time there is an ownership change with these software vendors, the viability of the product line you use is called into question. Can you trust your distribution operations to a software vendor with questionable long term viability?
Do you have these symptoms of an aging WMS?
It is possible to move from aging WMS platforms to modern technology platforms with a simplified upgrade path. In many cases the annual cost of the new software is equal to the current costs of the aging platform.
I will not replace my friend because he is aging, but you might want to consider replacing your aging WMS!
Image via Flickr user kid_entropy
HighJump Software just had another customer go live with HighJump Warehouse Advantage and the Embedded Voice module. This customer is a third party logistics provider who plans to use the improved productivity and accuracy of their voice-enabled WMS Warehouse Management System to help them gain additional clients. Yesterday we released a video success story on Fox Racing who also utilizes embedded voice technology in their operations. See the Fox Racing video. The benefits of voice technology in the warehouse seem well understood by most distribution professionals I speak with. Most are quick to point out improved productivity (takes less time to accomplish tasks), safety (workers are hands and eyes free), and accuracy (complex check digit validations). Yet I often hear several misconceptions about voice technology that prevent adoption. Below is a listing of five common misconceptions I frequently hear about voice technology.
1. I require proprietary hardware solutions for voice.
At one time this was true. However, voice technology providers like HighJump Software’s partner Vocollect, have worked with the leading rugged mobile computer manufactures to provide a solution that runs on a traditional device used in the warehouse. It is now possible to utilize the same device to accomplish both voice processes and traditional RF scanning processes.
2. It does not work in the language spoken by warehouse staff.
With HighJump Software’s voice solution, warehouse workers can speak to the device in any language they choose. The recognition technology will respond to spoken commands in any language. Additionally, HighJump Software’s WMS Warehouse Management System is fully internationalized so warehouse employees can be prompted in any of the languages supported in the system.
3. I don’t need a WMS if I have a voice picking system.
Voice enablement is a standard feature in a best of breed WMS Warehouse Management system. The voice technology allows multiple processes such as picking, cycle counting, and put-away to be automated with voice-based interaction with users. A voice system does not optimize all functions within a warehouse and assign warehouse work in the most optimal way. In addition, a best of breed WMS expands beyond the four walls of the distribution center to integrate with suppliers (supplier enablement/supplier integration) and customers. These extended features are not found in voice enablement technology.
4. Voice picking systems simply voice-enable RF prompts.
Most distribution professionals focus too much on the voice technology and not enough on the process differences between traditional RF prompting and voice prompting. Interacting with a text based interface can be completely different than interacting with a voice system. Workflows often need to be optimized for a voice environment. This often means reducing the number of commands spoken and shortening operator response. There is also a different approach to validation because bar code scanning is often minimized in voice environments.
5. My distribution center is too small for voice.
Voice technology is not just for the “big boys” any more. Simplified WMS integrations make voice implementation straight forward for the end customer. The emergence of multi-modal hardware solutions also mean that distribution centers with smaller teams can have team members easily move between voice enabled processes and non-voice processes. Voice technology represents a strong ROI for any distribution professional who wishes to improve productivity, accuracy and the safety of warehouse employees.
If you have been responsible for implementing any business applications, you have dealt with a gap between your company’s requirements and what the base application offered. In the past you were always faced with two choices: change your process and in many cases sub-optimize it to adhere to the software vendor’s offering or create an expensive change order where the base code is modified which matches your process but results in a less supported product and more costly ongoing maintenance. In this paradigm, the general approach is to determine if the core business process is strategic. If this is viewed as a differentiator to your company then the general consensus would be to change the software to match your process. However this is a tough question to answer, especially deep in supply chain processes. Many companies over-estimate the degree that each process is strategic causing horribly customized and un-supportable applications as a result. But, does this question have to be either or? Is there another option?
Companies such as HighJump Software have architected our supply chain management software solutions to allow the company to match their business requirements without costly modifications. With the business process configuration tool the customer can match their processes where appropriate but also take advantage of standard supply chain best practices that are resident in the application. This offers a refreshing change to the either or outcome of previous gap analysis efforts.
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.
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