Workflow Management Solutions

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

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

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.

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.

As I begin blogging, I hope my thoughts are useful to some you out there.  The power of the internet is the transactions and interactions that it creates.  This is where collaborative magic happens and I look forward to the conversations and feedback that are created.

In working with literally hundreds of customers over the last 20 years in the IT business, I see a similar problem all of the time.  People invest a great deal of time and money to implement new state of the art technology so that they can be leading edge and then spend an equally staggering amount on making it do what they do today.  The argument is often cloaked in well founded arguments around how the processes they have are working and don’t need to be changed.  The horse and buggy, quill pen and typewriters all worked as well.  This approach is particularly evident when organizations are changing their direct store delivery software and route accounting systems.

When we dig into it, we find that a lot of the processes we see in the field are created due to physical limitations that were caused by data only being communicated when field representatives returned to the office or the physical passing of paper.  With wireless communications and real-time information those limitations are gone.  This creates the opportunity to rethink some of those basic assumptions. If we receive orders in real time, do we really need to wait until tonight or tomorrow to pick them?  If the inventory is already on a truck that is nearby, can’t we just dispatch that truck and call it done? It is really about using our workflow management solutions to change the way we work.  Fax machines were state of the art less than 20 years ago.  Wireless technology is changing the way customers want us to serve them.  The real question is, will we keep up and create the opportunities that grew our traditional businesses in the first place?

Image via Flickr user Beaverton Historical Society.
 

As an avid Minnesota Timberwolves fan I was very excited when we exercised the demon of Kevin McHale from the organization.  While I know he had his heart in the right place, the organization could not move forward as long as he had some connection with the team.  This change is complemented by the Timberwolves adding Ricky Rubio and Jonny Flynn in last night’s draft.  These new players should provide a solid core along with Big Al and Kevin Love to hopefully challenge the Western super powers in the years to come.

The past several years there has been little to cheer about, but that did not mean we should completely start over.  We had some good pieces to the puzzle and needed to complement them rather than completely start from scratch. 

This is an approach more companies should consider with their supply chain logistics software.  Too often companies go with a big-bang approach that completely rips out existing WMS Solutions and discards several processes that were of strategic importance.  This causes them to spend more money to duplicate what they already had to take advantage of new capabilities in the latest release.  A well architected software product should allow for step-wise changes that allow you to keep the key pieces of functionality you have configured but augment them with the latest R&D efforts from your supply chain vendor.  HighJump Software merge tools allows customer to take new workflows from the latest release and deploy to a customer environment with little or no impact on the other existing workflows.  In addition to a quick time to value, the risk of these step-wise changes is substantially easier to manage.

If you don’t know which processes are your Al Jefferson or Kevin Love, I suggest you take the time to understand what is really strategic and leads to differentiation within your current application stack. Then look to add other processes in a step-wise fashion to build a championship supply chain.

Recently I have had some events that again have me wondering why companies continually trust their complex, high volume distribution operations to ERP-based WMS Warehouse Management Systems. Allow me to describe these events…

1. I spoke with a large HighJump Software customer who told me the CIO had been pushing for a global deployment of an ERP system across all functions including distribution operations, but had been stalled by business owners who were concerned about the distraction and cost relative to the value.
2. I spoke with a prospective HighJump customer who has spent millions of dollars and multiple years attempting to implement an ERP based inventory WMS system. They have finally conceded that their distribution operations are too complex for an ERP solution and are turning to a best of breed solution.
3. I attended a panel discussion of users of an ERP based WMS Warehouse Management System. Presumably, these were the “flagship” customers because the panel was chosen by the ERP vendor. Customers openly complained about the performance of the system which they attributed to an inventory model that was not suited for distribution operations and a transactional model that was financially-focused rather than distribution-focused.

I would urge anyone considering the implementation of an ERP based WMS Warehouse Management System to consider these factors before finalizing their strategy to move forward with an ERP based WMS Warehouse Management System provider.

The Integration Myth

It is commonly perceived that integration between a WMS Warehouse Management System and other business systems will be easier if both systems are packaged as a suite. The truth is that most ERP WMS solutions have an API-based interface between the WMS Warehouse Management System and the rest of the business applications. In many cases best of breed WMS Warehouse Management Systems have packaged integrations that utilize the same API-based interface as the ERP WMS. While many of the ERP interfaces are “hard coded,” a best of breed WMS Warehouse Management System often provides integration tools (like HighJump Software’s Advantage Link module) which allow data mappings to change based on specific business requirements. It is important to understand the details of the interface approach before assuming that cost will be less and functionality will be greater with a “suite” solution.

The Transaction Models Are Different

During my time as a consultant, I implemented ERP systems and best of breed supply chain systems. There is a fundamental difference in how these systems are architected. Supply chain systems start with a practitioner’s view of the business problem. Screens and workflows are suited toward the needs of people who are supply chain professionals. ERP systems have an accountant’s view of the business problem. Nearly all transactions that occur in an ERP solution tie to a general ledger transaction. Often this accounting-centric view results in business processes that are not optimized for the supply chain.  

For more information on Best of Breed vs. ERP WMS, please read HighJump Software's Special Report on the topic.

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. 

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

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.   

HighJump Software today announced it has achieved integration validation with Oracle’s PeopleSoft Enterprise Supply Chain Management (SCM) 9.0 for both HighJump Warehouse Advantage and HighJump Data Collection Advantage. HighJump Software has maintained a strong relationship with PeopleSoft and Oracle for more than 10 years by providing integrated manufacturing data collection, inventory and warehouse management solutions for Oracle’s PeopleSoft Enterprise SCM products. This relationship has resulted in more than 80 joint customers.

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.

I started with HighJump Software in February of 2002. The economy was still rocky following the September 11^th tragedy and the enterprise software industry was particularly hard hit on the back of the dot com bubble burst. Some might have said it was a terrible time to move from management consulting to the software business. Interestingly, HighJump was able to weather the difficulties and produced rapid growth in the early 2000’s. For several years in that time period, our marketing message prominently highlighted that we were the “fastest growing supply chain execution software provider”. As HighJump established a larger position in the supply chain execution software market, we de-emphasized that message.

The recent news that HighJump was cited as the fastest growing provider of Warehouse Management Systems (WMS) in a report by ARC Advisory Group titled “Warehouse Management Systems Worldwide Outlook: Marketing Analysis and Forecast Through 2013” was a bit like déjà vu, especially given the current economic situation. There appear to be some factors that remain important to WMS warehouse management system buyers when they select HighJump over our traditional competitors.

Flexible Architecture – traditional approaches to WMS solutions remain primarily switch driven. This means that functionality is enabled through setting of interdependent switches to define a business process. HighJump does provide switches for all standard functionality in the warehouse management system (WMS). In addition to the traditional switches, HighJump’s architecture provides a workflow modeling tool which provides even greater flexibility when defining operational processes such as those in a warehouse. Prospective buyers who understand their distribution center operations will likely change over time, see value in this flexible architecture.

Total Cost of Ownership - ongoing cost of enterprise software applications is being heavily scrutinized by IT organizations during this economic slowdown. HighJump encourages buyers of warehouse management systems to evaluate cost of ownership over the full lifecycle of the software system, typically 7-10 years. Specific areas to understand include: initial software license fees, implementation services, customization fees, maintenance and support fees, upgrade fees (assume an upgrade every 2-3 years) and ongoing customization fees to support business changes. Our experience shows that buyers who perform this analysis will see clear differentiation in total cost of owner between HighJump its traditional competitors.

I believe flexible architecture and total cost of ownership are heavily weighted criteria when evaluating a warehouse inventory management system in an economic slow period like we experienced in the early 2000’s and are currently experiencing. These factors may provide some indication of why HighJump’s business performance will remain healthy during these time periods.