Supply Chain Management Software Solutions

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.

Today HighJump announced that our latest route accounting system (RAS) has received certification with Anheuser-Busch InBev for use by their wholesalers. The result of this certification is that HighJump RouteCenter receives the highest level of compliance, Level 1 ISV – Strategic Partner. The news release: HighJump Software Named Strategic Partner by Anheuser-Busch InBev.

The role of route accounting systems in Anhueser-Busch InBev’s value chain is critical. In order to fully understand the importance of this software, it is important to contrast the value chain of the large four beverage suppliers from a traditional CPG value chain. Let’s explore the differences …

Traditional CPG Value Chain

The traditional CPG value chain is largely vertical. A vertical value chain is one where each component of the chain including source, make, deliver and sell is controlled by the same company – in this case the brand owner. This allows retailers and brand owners to collaborate about every aspect of the product including quality, new product introduction, price, promotions, and electronic commerce. With today’s sophisticated supply chain software it is possible for most CPG companies and retailers to know exactly what was sold (and at what price) at every retail location every day.

Additionally, most traditional CPG companies have the following inventory flow: manufacturing/production -> regional distribution center -> retailer’s distribution center -> retailer. In this scenario the retailer is primarily responsible for managing the inventory that is shipped from the manufacturer to the retail distribution center (ordering) and the flow from retail distribution center to store (although there are certainly evolving collaboration techniques to share this responsibility across the manufacture and retailer).

Big Beverage Value Chain

The value chain of the big 4 US beverage suppliers (AB InBev, MillerCoors, PepsiCo and Coca-Cola) are more fragmented than the traditional CPG companies. In the case of the beer suppliers, they manage the manufacturing/production process and then resell their beer to independent wholesalers/distributors that distribute and sell to the retail location. In the case of the large soft drink suppliers, they do not even manage the production process but leave make, deliver, and sell to independent bottlers.

Additionally, in most situations beer and soft drink products are delivered directly to the retail location and by-pass retail distribution. This approach benefits the retailer because they are not forced to handle and transport beverage products which are significantly heavier than most food products. The beverage companies benefit from the ability to merchandise themselves and manage promotions at a local level.

Why Retailer Collaboration is More Challenging in the Beverage Value Chain

Retailer collaboration through e-commerce initiatives is more complex in the beverage value chain. This is because unlike the traditional CPG chain which has full visibility to transactions with the retailer, the big 4 beverage suppliers are reliant on their independent distributors who transact with retailers. AB InBev needs to have the same level of visibility over their independent wholesalers as Proctor and Gamble has over its distribution centers….no easy task.

How the Route Accounting System Helps

The route accounting system is the core back office system for independent beverage distributors (think ERP for beverage distributors). Best-of-breed route accounting systems have certified integration back to the large beverage supplier organizations. Through this integration, the large beverage suppliers are able to have transaction visibility throughout their distributed value chain. This collaboration allows product, pricing, and promotional information to flow from the supplier to the independent distributor. It also allows sales transactions to flow from the independent distributor back to the supplier so that the supplier can provide this information to the large (and demanding) retailers. Therefore, it is really the route accounting systems which allow the large beverage supplier organization to provide retailers the e-commerce supply chain collaboration they demand.

I suspect, although it wouldn’t be admitted to in mixed company, that the presumption has oft been made that having any sort of route accounting software in place puts that direct store delivery business ahead of most. Quite a stretch, considering the increasing complexity of food and beverage distribution processes and requirements, and the extreme range of RASs out there (think old pick-up vs. shiny new SUV).

Now, that old pick-up was, in its day, the envy of many. It could even drive through some bumpy terrain. But now, although it [usually] starts, and can [almost] reach highway speeds, it’s not too reliable, and you need to visit salvage yards to find replacement parts. Not exactly the chariot you want your precious cargo riding in, and not exactly cost-effective. Not the most inspired metaphor, but not too far off?

So how do you know if you’ve got a route accounting system akin to that old pick-up? 
 

• Your processing times seem to be getting slower and slower. 
• You spend days trying to extract data for reports you need to run your business.
• It’s tough to get applications to work together and you’re spending a lot of time and money making integrations work.
• There’s only one person there who understands the necessary workarounds of your RAS – and he’s retiring next fall. 

No, we haven’t been shadowing you. The fact is: the symptoms you’re experiencing are quite common to DSD businesses running on dated technology. While your system may still work at a basic functional level (the pick-up still starts and runs, remember?), modern technology can provide new features, better access to company performance and smoother integration with other systems. 

You may even be interested in the “full maintenance plan” (to extend the vehicle metaphor painfully further) for a modern route accounting system – otherwise known as an on-demand, or hosted system. This option removes the maintenance headache completely by having your supply chain management software vendor host your system for you. There is no hardware to purchase or maintain and patches and upgrades are done automatically. 

This year may be the best yet for your direct store delivery business – do you have a swift, reliable and easy-to-maintain “vehicle” to get you there?
 

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 3^rd 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.

HighJump Software has partnered with John B. Sanfilippo & Son Inc. (JBSS) to create a video highlighting the use of supply chain management software solutions to improve food safety and traceability of food products for recall management. JBSS is the manufacturer of the Fisher Nuts and various private label brands of nut products. Watch the video at http://www.highjump.com/Sanfilippo/.

Food recalls of recent years – peanut butter and spinach among others – have propelled food safety issues into the national spotlight. Also making headlines is the Food Safety Enhancement Act of 2009 for enhanced traceability and regulation of the food supply chain. Supply chain execution technology is a critical component in adhering to these new regulations and ensuring food safety. For effective recall management, full traceability is required – from the supplier, through production, distribution and last mile delivery.

Read the full release.

At HighJump Software we are working on a new performance dashboard for our WMS Warehouse Management System.  This is a very exciting project which will allow customers to view key metrics throughout their distribution center operations.  While ensuring the dashboards are esthetically pleasing is a key element of the process, the more important part is determining what are the right metrics to include in each dashboard.  In addition to relying on industry associations such as the Supply Chain Council and the Warehousing Education and Research Council, we evaluate potential metrics according to the “SMART” criteria:

S – Specific

Is the metric detailed enough to be meaningful?  A metric like ‘Outbound Order Progress’ sounds interesting, but probably lacks the specificity to be useful.  Metrics like order pick accuracy or number of cases shipped are more specific and tangible.

M – Measurable

There are a lot of interesting metrics, especially in supply chain, but many companies do not have the data to actually measure the metric.  Total landed cost is one that comes to mind as challenging for many companies.  Before selecting a set of metrics, make sure you validate your supply chain management software solutions have the data needed to calculate the metric. 

A – Actionable

If the user looks at a metric and finds it interesting but is unable to take action to improve the metric, then it will not be very useful.  When a metric falls below a goal or a certain tolerance, the user of the metric should be able to determine the root cause and take corrective action to improve the metric.

R- Relevant

The metric has to be relevant to the user.  It would not be relevant to display outbound order metrics to the inbound receiving manager.  This is why it is important to have multiple dashboards so that only relevant metrics are presented to the user.  While there will be some overlapping metrics between the DC manager dashboard and the customer dashboard, it is important that only metrics that are relevant are displayed to the targeted user. 

T – Time Based

The metric perfect order fulfillment sounds like a good metric, but if I just said the value was 98% that would prompt a series of questions:  for what time period, is it trending up or down, how it compares to last year at this time, etc.  Metrics need to have a specific timeframe associated with them and depending on the metric that timeframe could be hours, days, weeks, months, etc. 

Hopefully this is helpful when you evaluate what metrics to use in your supply chain operations.  More to come as our dashboard product nears completion.

I recently met with one of our large 3PL customers from China.  Among other things, we discussed the product roadmap and importance of a localized application.  This reminded me of a trip I made to Taiwan which clearly demonstrated that localization considerations go far beyond just supply chain software solutions. 

In the streets of Taiwan there are hundreds of scooters.  On any given corner there could be literally tens of scooters waiting for a green light.  This adds another level of complexity to driving a car in the streets of Taiwan since even a slight shift in direction could send a scooter flying, causing serious injuries as a result.  Many car manufacturers have localized cars to have sensors on the four corners of the car.  If a scooter is close to the sensor, the driver is alerted to their presence even if the driver cannot see the scooter.  While this does not eliminate accidents, it greatly reduces them. 

Correctly localizing supply chain logistics software can also eliminate accidents in your operations and help keep costs low.  When the topic of localization is brought up, we generally think outside the United States, but even in the United States it is commonplace to have a multi-lingual workforce where upwards of five languages are spoken.  Workers who can operate in their native language are much less likely to make errors and generally have higher productivity because they don’t constantly have their own internal translator processing every prompt.  HighJump Software WMS Management solution has been translated and localized for over 10 languages including simplified Chinese and Japanese.  On your next software project, don’t underestimate the importance of localization.

Image via Flickr user The Kozy Shack

As a maker of action sports apparel, Fox Racing runs two fast-paced distribution centers in California. The company was growing quickly and was looking for supply chain management software solutions to improve the flexibility, adaptability, speed and accuracy of the order selection process at the company’s DCs. Fox Racing implemented the HighJump WMS warehouse management system along with Vocollect Voice. Check out the video below to see Fox Racing’s operations in action.

Fox Racing’s Improvements

·         Doubled productivity.

·         Order accuracy has increased to 99.99%.

·         Training time has been reduced from a full day to less than two hours. Order selectors are achieving full productivity by the end of the second day of use.

·         Training for Spanish-speaking employees has been simplified through the voice system’s multilingual capability.

·         Worker satisfaction has significantly increased through shorter work days. Work now finishes by 5:30 p.m., versus the previous 9:00 p.m.

·         The hands-free, heads-up aspect of the voice system has resulted in less worker distractions and has reduced the opportunity for work injuries.

·         ROI has been achieved in six months – six months earlier than projected.
 

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.

Dan Radunz
Dan has a 13 year history with HighJump Software.  He moved up through the organization from software developer, to team leader, to Director of Technical Development Services.  Dan is a guru when it comes to the Advantage Platform, HighJump’s unique platform for supply chain technology that is highly adaptable and flexible.  I’ve had the privilege to listen to Dan speak of customers and prospective customers about the technology features of the Advantage Platform.  He has a knack for explaining highly technical concepts in a simple manor and can go deep in the weeds with the most technical audience members.  Dan will bring this technology leadership to the Direct Store Delivery Software products as we move forward with making newly acquired platforms available to existing customers.  Dan will also be critical in advancing our agile development methods across the organization.  
    
Millions of Moms, Millions of Flowers
Apparently, I wasn’t the only guy who found it easy delight my mother with a bouquet of flowers by placing an easy on-line order.  During the peak flower giving seasons of Valentine’s Day and Mother’s Day, a HighJump WMS warehouse management system customer ships millions of flowers in a very short time period (including my frequent orders).  The millions of WMS warehouse management system transactions required to support this volume are astonishing.  Only with supply chain logistic software that is benchmarked and proven to scale, is this type of operational volume accomplished.  It is a good feeling to know our software plays a critical role in these operations.
 

Considering that one of the first records I ever bought was “Heartbeat City” by late 70’s/early 80’s New Wave heroes, The Cars, I thought it appropriate to pay a little homage in my first ever HighJump Software blog posting.  While those of you familiar with the song “Magic” will (with good reason) wonder how a catchy little love song relates to Agile Software Development; I can tell you that you needn’t look any further than the title (yes, I am that obvious). 

As Agile Software Development becomes more and more main-stream, you will find countless hordes of consultants and authors, all extolling the magical virtues of adopting this process.  And naturally, for a fee, these consultants and authors will be more than happy to share with you the secret of this silver bullet.  While I’m the last guy who wants to stand in the way of someone making a buck, I can assure you that there is nothing magic about this.  Agile will not slay your Werewolves; and this is precisely why it works. 

Agile Software Development is a process that is firmly grounded in common sense.  While I fully acknowledge that Agile, much like other methodologies,  has its own language and its own complexities,  it is a simple process that aides in building a solid understanding of cause and effect and helps establish repeatable practices around teamwork, creative collaboration, incremental development and individual accountability.  Here at HighJump Software, we have been using this process to manage all development for our direct store delivery software, manufacturing execution system software and supply chain management software solutions projects.  I have experienced life before our process adoption, I’ve seen the transformation and have enjoyed the benefits since, and would never dream of going back.