Programming advances may soon allow you to borrow bits and pieces of different systems to develop a custom supply chain application, all at a modest cost.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Michael Liebow tells how a colleague describes the typical supply chain technology development process. "He likes to say that you build a set of requirements, then roll in the cement truck and lock it in. To make any changes, you have to get a jackhammer."
That is, even the best programs are difficult and expensive to change. And at a time when supply chain managers are working hard to develop agile and flexible networks, tools locked in metaphorical cement can become a major headache.
Help, though, is near at hand in the form of new software tools built on something called service-oriented architecture, or SOA. Liebow, who is vice president of SOA and Web services for IBM Global Services, and other industry insiders report that providers of enterprise-wide systems and supply chain specialists alike are rapidly developing and rolling out SOA-enabled tools. And those tools, sooner rather than later, should offer distribution, logistics, transportation and other supply chain managers ways to adjust business processes quickly and to develop customized processes that meet the requirements of even the most finicky customers—and to do it without breaking the bank.
Pick and choose
Put simply, SOA-enabled systems allow end users to pick the parts—or services—they need from among all installed systems and to assemble them into a business process that meets specific requirements. It enables it without major integration efforts and the time and cost they entail.
Ron Riggin, technology leader of supply chain technology provider RedPrairie, explains it this way. "Think of it as having every subroutine now exposed to the outside world. You don't have to run the whole program; you could just run the subroutine. For example, if you want to use [Microsoft] Word's spell check, you could do that and not run all of Word."
Better yet, you might not have to pay for all of Word. With SOA, users may be able to buy only the parts they need, says John Fontanella, senior vice president and research director for Aberdeen Group. "Five years ago, you would buy a WMS and pay $500,000 whether you needed everything or not," he says. "What SOA does is break down individual functions. So instead of buying a warehouse system, you could buy the putaway module or the inventory control module. In the future, you will be able to put those together to
custom fit your needs."
As for how those different modules would communicate with one another, Eddie Capel, senior vice president of product management and customer relations for Manhattan Associates, describes the process as a series of well-orchestrated handoffs. "The notion of SOA is [that] you can have one application call another application to do some work and then pass back the results."
Capel gives the example of a warehouse management system (WMS) that is not RFID-enabled, but needs EPC numbers for shipping. "There is a business logic that goes into generating the EPC number. If the WMS does not have that logic, it has to get it from somewhere." An SOA-enabled WMS could output a message to another application, probably formatted in XML in order to use Web services. "It would say, 'Here's a piece of data'—it might be a carton number. Wrapped around that number would be instructions that say 'I need an EPC number for the carton.' And the receiving application—say, RFID software that is SOA-enabled—can receive the request and recognize it. It brings in that request, creates the EPC number and sends it back to you."
Theresult is that users can create what Hans Thalbauer, vice president for supply chain management for SAP, calls composite processes. Thalbauer says development of SOA makes particularly good sense for supply chain applications because of the demand for rapid change in business processes both within the enterprise and across the broader supply chain.
Great promise close at hand
Service-oriented architecture reaches well beyond supply chain applications. Enterprise system giant SAP, for example, has made major development efforts with SOA and expects to have all of its applications service-enabled by sometime next year.
Still, for supply chain managers, it can have great allure. Says Riggin, "It has immense applicability to the supply chain. Since the supply chain means shipping or receiving and communicating with trading partners, with the need to be more effective and to be more efficient, there's a tremendous value proposition. Service-oriented architecture is the best thing to ever hit that space as far as foundation technologies go. Having giant monolithic applications at each enterprise and periodic bulk transfers does not [benefit] anyone. It is going to improve efficiencies in everyone's supply chain."
Furthermore, SOA makes it easier to tap into Web-based applications. "The benefit of SOA is that I don't have to build it myself and I don't have to have it running on my server or on my enterprise," says Riggin. "The driving value is configuring your business processes to your needs and not having to own every single element."
The potential benefits are substantial. Dennis Gaughan, research director for AMR Research, says, "A perfect example is supplier on-boarding. Right now, it is a time-consuming and non-automated process. It involves entering data and managing across distinct systems." SOA-enabled systems, he says, would allow development of a composite application that could be built on data from disparate systems at both the supplier and the buyer.
Capel elaborates on what SOA could mean for WMS installations. In the past, he says, a WMS might require customization during an installation at a DC to meet specific business process requirements. "In days gone by, you would have to take that function and rewrite it as a custom application inside the WMS. Today, you don't have to do that. SOA allows the core application to just invoke business objects in existing applications. The cost of implementing and integrating the WMS is significantly reduced because you don't have to rewrite or eliminate applications you already have."
The importance of that kind of flexibility is hard to overstate. Liebow uses an anecdote to describe the problems many shippers face. "I know one large shipper that spent a lot of money home growing all [its] applications," he says. "Nothing off the shelf would work for them for the velocity they needed. What they built was an excellent system that served them very well. But as the business changed, it was not an adaptable or flexible system. You may get two changes a year to the system if you're lucky." Any changes require new code and extensive testing.
"You walk into any organization, and see what they have, and if they have to change, the response from IT will be they can do it in six months for $20 million. That's a frustration in the business. It has not gotten easier or cheaper."
Dismantling the barriers
What thatmeans is that despite a couple of decades of talking about integrated supply chains, the technology requirements have remained a barrier. Last fall, Fontanella wrote a report on the promise of SOA for supply chains. In the report, he posed the problem facing business managers this way: The high cost of software development and maintenance and the high cost of integration mean that only the most critical functions are interconnected and that many potential capabilities are denied to operations management. "If indeed companies compete with their supply chains, many are doing it with the technology arm tied behind their backs," he wrote.
Fontanella points out that most businesses rely on multiple applications. "No one is using their ERP to run the entire business," he says. Even within the enterprise, the task of getting different applications to work together has been difficult, time-consuming and expensive. And yet even aging legacy systems have value that businesses are loath to give up. SOA-enabled systems allow tapping into what's best about legacy systems even as new tools come along. "No company wants to pull out all its technology. SOA allows adding new functionality."
In his study, The Service Oriented Architecture in the Supply Chain Benchmark Report, Fontanella argues that SOA could "revolutionize the way the enterprise and its partners buy, build, and deploy supply chain technology." It could enable flexibility in processes now only available to a wealthy few firms.
Fontanella contends in the report that service-oriented architecture will lead to important changes in the development and management of supply chain applications. "For the first time, business users will be able to summon applications to support a business process rather than launch a business process constrained by the application." Deployment of SOA, he says, will lead to "cheaper and faster integration and more flexible business processes." It should enable selection of services and functions from among multiple applications to create customized customer-specific processes. Or looked at another way, it enables supply chain managers to meet the specific demands of different customers, as varied as those demands may be.
What's old is new again
SOA has been around for a while. Gaughan says it is already well established in service industries such as banking, finance, insurance and telecommunications. And chances are, your IT people are thoroughly familiar with it.
But it has only recently begun to emerge as a foundation for supply chain applications. SAP, for example, is approximately in the middle of its effort to roll out its service applications, according to Thalbauer. He says the company is working with its partners on releases for inventory optimization, demand management, and other tasks. For supply chain, the initial focus is on demand planning and supply planning, followed by transportation planning and execution.
As a group, suppliers of enterprise systems and supply chain applications are investing heavily in new generations of systems and tools built on SOA. In part, that's to their own benefit, Fontanella says. "For the application vendor, it greatly reduces development time and implementation time." With technology companies snapping up other firms, SOA significantly reduces the cost of integrating technologies. "Vendors are adopting it in their own best interests," he says.
The good news for those in the initial stages is that it's not too late. "We're still in the early days," Liebow says, when asked about the state of evolution of SOA in the supply chain. "Most organizations are in the planning stages."
Capel says, "I would say that a number of companies have some SOA implemented. The level at which it's implemented may be quite modest. Implementation is not ubiquitous. That is just a question of time. There are not significant cost barriers."
Proceed with caution—but do proceed
Still, Fontanella warns that business managers had better look carefully at technology that promises SOA compatibility. "Too often, we're seeing companies put out requests for information on supply chain technology and asking about SOA, and vendors are just checking it off," he says. "Companies are not doing their due diligence to see if the vendors have the platform or are building one in the next 10 years." Choosing the wrong technology now, he says, could lead to major headaches as true SOA-enabled technology rolls out over the next few years.
Despite the potential simplicity in using SOA-enabled systems, change will not come overnight. "You have to be very focused," Liebow says. "This is not a panacea. Organizations may find it difficult. But as with any change, over time, it gets easier."
He suggests starting slowly, with projects that can quickly have a big effect and prove the concept. He urges taking on real problems and developing a project around them— not a pilot, he says, but implementing into actual operations. "It could be a single product number or customer record, or something else with low risk and high requests." He tells of one large shipper that began with customer data integration. "In the old technique, IT would take all the databases, restructure everything, and create one master record. In the new way, you leave the databases alone, create a virtual integration layer, connect the databases and create a virtual record." As a result, all customer information, from a variety of systems, becomes available in the form required by the end user.
Though he acknowledges that it might require giving IT a push, Liebow insists it's worth the effort. "The results are astounding," he says. "Once you start to free up the information flow, you start to free up dollars like you cannot imagine. You can redeploy labor, accelerate your ability to react to changes in the marketplace, and take a business process that may have taken 60 days to implement, and take it to minutes or days or weeks—at a fraction of the cost."
A team from the University of Tennessee, Knoxville, walked away with top honors at this year’s event. It was the school’s first time competing in the scholarship competition, which was held during IANA’s Intermodal Expo in September.
The winning squad included students Jaren Bussell, Elizabeth Shuler, Brock Sooley, and Kathryn Whittaker and was coached by Dr. Donald Maier, associate professor of practice–supply chain. “It is exciting to see what the students can achieve in five hours. Each team reads, analyzes, and prepares a presentation with no faculty input,” Maier said in a release.
In addition to UT, participating schools included the California State Maritime Academy, College of Charleston, Georgia Southern University, and SUNY Maritime as well as the universities of Arkansas, Maryland, North Florida, North Texas, and Wisconsin at Superior.
IANA’s scholarship awards support curriculums designed to attract students to careers in freight and intermodal transportation. Since the program’s inception in 2007, IANA has awarded over $5.3 million in scholarships.
Family-owned business Cibao Meat Products, a producer of Hispanic-style sausages and deli meats, has long prided itself on staying true to the traditions and values the company was founded on in 1969—like a commitment to high-quality ingredients and a family workplace atmosphere. Less of a source of pride, however, was its continuing reliance on the same, mostly manual, processes and data management techniques used at its inception.
With the company now selling its meats to retail giants such as BJ’s, Sam’s Club, and Costco as well as 500 supermarkets and restaurants across the U.S., Cibao president Heinz Vieluf Jr. knew that it was time to take the company into the digital age. “As a third-generation leader of a multigenerational company, I put an emphasis on bringing our business into the digital future and utilizing technologies that will help propel success,” he said in a statement.
IN WITH THE NEW
In Cibao’s case, that would require modernizing its data-collection practices. Because the meat producer still relied on legacy processes, its company data and customer data were siloed, scattered throughout departments from sales to manufacturing to accounting. Teams were manually gathering information and creating reports on a weekly or biweekly basis. As a result, company leaders had no real-time visibility into business-critical operations. On top of that, creating those reports ate up hours of team members’ time each week.
For help bringing all of its organizational data into one central location, Cibao turned to the Slingshot work management platform from software company Infragistics. In October 2023, the company began working with Slingshot to compile data from multiple sources into a centralized hub that would be accessible to every employee.
Today, with the new platform in place, Cibao is benefiting from enhanced data transparency across the company and from accelerated data-reporting capabilities. Employees can now create reports within minutes, eliminating the biweekly reports in favor of daily assessments and unlocking insights needed to make critical decisions 10 times faster than before—saving 120 hours a month, the company says. For example, now that it has real-time access to its customer payment data, Cibao’s accounts receivable team has been able to detect any discrepancies in real time. This has allowed the team to check in with customers as soon as they notice a potential issue, which has increased the company’s cash flow by $40,000 a week on average, or up to 65%.
STRENGTHENING THE BOTTOM LINE
With teams saving hours each week on reporting, Cibao employees can now concentrate on higher-value tasks. For instance, they have more time to connect one-on-one with clients and develop relationships, instead of getting held up on the back end. They can also focus on new marketing efforts and promotions, not only boosting customer satisfaction but also helping to grow existing customer relationships and develop new ones.
“We created Slingshot to bring together data that has traditionally been spread across departments into one completely accessible space so that companies can better drive productivity, insights, and ultimately business results,” said Dean Guida, founder of Slingshot, in the statement. “By bringing its data into a central location, Cibao Meat Products has unlocked insights that have allowed [it] to move strategically and at a faster pace, strengthening the company’s bottom line.”
As autonomous systems take on a bigger role in logistics and industrial production applications, the race is on to make the equipment smarter, more efficient, and safer. To accelerate work in this area, the German lift truck and logistics technology vendor Kion Group is partnering with a local university to support expanded studies on artificial intelligence (AI) and autonomous systems.
According to Kion, Peitz’s work will focus on the development of autonomous systems that operate intelligently and safely for all parties involved, with a particular focus on autonomous mobile robots, forklift trucks, and AI-based systems that are used in logistics and production environments.
The objective of the endowed professorship is to advance the field of research at the highest international level, Kion said in a statement. In close collaboration with research networks and other partners both within and outside TU Dortmund University, such as the Fraunhofer Institute for Material Flow and Logistics IML and the Kion Group itself, the professorship will form a “hub” for digital and intelligent logistics, the company added.
American skin-care company ET Browne—best known for its Palmer’s Cocoa Butter—has trimmed costs, boosted revenue, and increased profits thanks to a recent IT upgrade from its longtime technology partner Syspro, a global enterprise resource planning (ERP) software provider that specializes in serving manufacturing and distribution businesses. ET Browne has run on Syspro software for 25 years and racked up some of its biggest year-over-year improvements following a 2023 upgrade to the latest version of Syspro ERP—an enhancement that allowed it to leverage the platform’s material requirements and planning (MRP) capabilities to build a just-in-time inventory system.
The net result? A smoother-running supply chain.
“We’ve successfully relied on [Syspro] for more than a quarter century while both growing and aligning our business to take advantage of the [platform’s] enhancements,” Pieter Goes, ET Browne’s vice president of IT & BI (business intelligence), said in a statement describing the project. “After bringing in [Syspro] to do native demand forecasts, we were able to better evaluate key markets and key customers, enabling our forecasting and capacity planning to be much more accurate. As a result, we can achieve a fill rate of greater than 95% and are able to process our purchase orders much sooner, resulting in better supply.”
NEW CAPABILITIES, BETTER OUTCOMES
Syspro’s MRP capabilities allow companies to balance supply and demand for materials and components so they can accelerate manufacturing production. With the system upgrade, ET Browne was able to take advantage of those capabilities to gain better visibility and control over inventory and the supply chain. As the companies explain, this allowed ET Browne to predict demand, understand how filling the projected sales pipeline would affect production schedules, and anticipate the peaks in demand it would need to buffer.
Leveraging those demand forecasting and supply chain management capabilities, ET Browne created a just-in-time inventory system that has dramatically reduced the amount of raw material and product it keeps on hand—a move that is translating into increased profits: Since implementing the upgrade, ET Browne has reduced inventory by 22% and increased profits 113% on 7% revenue growth.
ET Browne’s leaders say they intend to leverage Syspro to manage emerging challenges as well. Those include meeting growing consumer, distributor, and government demands to use recycled materials in packaging, while also making sure the company first uses up the materials it already has on hand. That transition will increase complexity within the company’s bill of materials, something Syspro’s management capabilities can help it navigate.
“[Syspro] ERP provides much more than just financial management,” Brian Rainboth, CEO of Syspro Americas, said in the statement. “Our platform empowers mid-market manufacturers to create accurate demand forecasts [and] project exactly how much raw material they’ll need to order and how much product they need to make to meet demand. We’re proud to celebrate 25 years with ET Browne and look forward to enabling future growth and profitability as the company deploys additional capabilities with [our] platform.”
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Illustration courtesy of Clean Energy Fuels Corporation
For consumers, the car-buying process generally includes a test drive so they can see if the vehicle lives up to its hype before they plunk down any money. But the process can be a little more difficult for commercial fleet managers.
The 2025 Peterbilt 579 day cab tractor, branded in Clean Energy’s signature green, will be available for fleets to test on their normal routes for up to two weeks. And if you don’t happen to have an RNG fueling station in your own yard, that’s no problem: The fleets testing the demo truck will be able to use Clean Energy’s fueling infrastructure, which consists of over 600 stations across North America, 200 of which have public tractor-trailer access.
First in line to try the new rig—which can haul heavy loads for an 800-mile range—is transportation and logistics giant J.B. Hunt Transport Inc. After Hunt completes its trial, the truck will make its way through large and medium-sized heavy-duty trucking companies in California, Arizona, Texas, Oklahoma, Ohio, Michigan, Pennsylvania, and Florida. Clean Energy says it expects to run the X15N demo truck program at least through 2025.
“Vehicles powered by renewable natural gas produce significantly less carbon emissions throughout their lifecycle and are more compatible with today’s available infrastructure than most competing emissions-reduction technologies,” Greer Woodruff, executive vice president of safety, sustainability, and maintenance at J.B. Hunt, said in a release. “The new technology and supporting fuel network in this pilot have the potential to be a viable, cost-effective solution for customers wanting to decrease their carbon footprint in the near term.”