It's easy to fall victim to the ready, fire, aim syndrome when buying logistics software. In the rush to solve some sticky operating problem, logistics managers too often allow themselves to be swayed by vendors' seductive marketing promises and go with the company with the best pitch. Too late, they discover they've bought software that doesn't do what the salesman said it would do, let alone what they need it to do.
But that's a trap that can be avoided. No matter what type of software you plan to buy—a warehouse management system (WMS), a transportation management system (TMS) or supply chain planning and execution (SCE) software—you can head off problems by conducting a thorough needs assessment at the outset. Before you haul in vendors for the first round of demos, you want to be sure you're automating the right processes, not codifying inefficient or pointless steps. "You don't want to put clean clothes on a dirty kid," observes Chris Slover, an account executive at Fortna, a West Reading, Pa., company that integrates logistics and distribution systems.
As you venture into the market, expect to be surprised. Logistics software vendors have been trotting out new capabilities and features on a regular basis, says Dr. Terry Harrison, a professor of supply chain and information systems at Pennsylvania State University in State College, Pa. "If you haven't looked at products in this market for a few years,"he says,"you shouldn't assume that what you knew then is still true."
WMS vendors, for instance, have used computer wizardry to create systems whose capabilities re ach far beyon d their original function of tracking stuff through a warehouse. As traditional storagedepot type warehouses have evolved into sophisticated fulfillment centers that handle light manufacturing and order assembly tasks, WMS makers have kept pace,creating sophisticated control systems the Strategic Air Command would envy.
By the same token, today's TMS packages do a lot more than just help shippers pick the cheapest carrier or shortest route. In fact, they're coming closer all the time to reaching the industry's Holy Grail of end-to-end supply chain visibility. "Up to now," says Larry Lapide, vice president for supply chain management at AMR Research in Boston, "when something shipped on a carrier's t ruck, it became invisible until it showed up at the customer's receiving dock." Today, many TMS packages can generate advance shipment notices (ASNs), which notify customers when shipments leave the supplier and make arrivals more predictable.
That's hugely appealing to just-in-time manufacturing operations. Others offer consolidation capabilities, a big att raction for retailers and other companies that traditionally pay for inbound transportation. With up-tothe- minute information on when and from where their suppliers will be shipping, Lapide says, retailers often can consolidate shipments on their own across multiple vendors." That has the potential to save a lot of money," he says.
For importers and exporters, TMS are available with international trade management fea tures that electronically sift through the company's data streams, gathering information needed for compliance with new homeland security measures like the Cargo Security Initiative, which took effect last December. "Under that rule, you have 24 hours in which to specify how you will ship things from the port of entry and provide a manifest at the lowest packaging level," Lapide explains. And as similar rules affecting road, rail and air transportation are adopted, he predicts, TMS vendors won't waste time getting their updates out on the street.
As for the market itself, Lapide notes that buyers should be aware that a shakeup's under way within the vendor community. It's getting harder and harder to find a pure TMS company, he reports, because so many have been snapped up by WMS or planning-oriented companies. Vendors of supply chain planning systems,in particular, are finding component systems like TMS to be an easier sell than what Lapide refers to as "the big, intergalactic supply chain solutions." Though suppliers like i2 and Manugistics are still around, they're finding that fewer companies are willing to risk the wrenching changes demanded by a big systems overhaul. Today's deals, notes Lapide, "are smaller and less ambitious."
Package deals
Market dynamics aside, buying logistics software isn't really any different from buying any other type of system. All the usual rules apply … get the users involved, investigate the vendors, ask about support services, take the package for a test drive. But it's also true that even cautious buyers get into trouble. To steer DC VELOCITY's readers away from some common pitfalls, Harrison of Penn State has put together the following 10 tips:
1) Look for something that's based on a standard technology platform such as Windows, Linux or UNIX, advises Harrison. "Pick something that makes sense for your company in terms of the investments you've already made."
2) Select products that are easy to implement. Software users aren't software professionals and shouldn't have to be, he notes. If a tool is too cumbersome and demands too much of the user's time, it might not be used as intended.
3) Look for a product that can provide seamless integration. Often this means buying everything from one vendor, though that won't guarantee trouble-free integration, Harrison warns. The secret is to ask plenty of questions and, if possible, get proof.
4) Don't let a software package force you to change the way you do business. Some vendors require that you change your practices to fit their product's template. That can be a formula for trouble."You'll need to decide whether you really want to turn your business practice on its ear just to use this software," says Harrison.
5) Think through the total cost of ownership (TCO). What's it going to cost to implement? How about training? Is there a reasonable upgrade path for the future? These are some of the issues to consider before assuming that a software package m a kes financial sense. Harrison says there's no one formula for making this assessment: simply decide on some criteria that make sense for your operation.
6) Make sure it's scalable and upgradeable. With logistics software, it's worthwhile thinking through a future upgrade path as well as making sure the product has an adequate ability to scale. Is your business likely to grow or might you be acquiring and absorbing other operations? How about additional functions and responsibilities that might come your way? "You certainly don't want to find yourself a few years down the road unable to grow your business because of limitations in the software," warns Harrison.
7) Look for a Web interface. The nearly universal Web interface is a great way to reach across multiple platforms and can help with deployment in heterogeneous environments, says Harrison.
8) Look for a vendor with a future. You don't want to be stuck with an orphaned product.
9) Make your software selection based on the contents of a written requirements document. This will minimize the temptation to make snap judgments that could haunt you later.
10) Get top management's support. This can help ensure that everyone makes the implementation's success a priority.
