James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
Software applications are often referred to as "tools," and just as with any tool—say, a hammer or table saw—you have to use them properly to get good results. Although it's relatively quick to teach someone how to wield a hammer, that's not the case with most software applications. Sure, the vendor may provide support in the form of classes or training, but the user still has to spend time learning how to use the software.
But in recent years, a few supply chain software vendors have begun offering clients another option for using their apps—a service in which the vendor runs its application on the customer's behalf for a fee. These arrangements are known as "managed services," a term that comes from the information technology (IT) sector, where this has been common practice for years.
This past September, at the annual global conference of the Council of Supply Chain Management Professionals, JDA Software Group Inc. of Scottsdale, Ariz., announced plans to begin offering managed services for its transportation and logistics management software. In its announcement, JDA said it was targeting its new offering to companies that wanted to incorporate transportation management software (TMS) into their operations but lacked the IT and capital resources to do so.
By the way, JDA's new transportation offering is only its latest foray into managed services. The vendor has been offering this option for some of its other software apps for years now. In the supply chain software area, for instance, the company has been providing managed services for its supply chain design solution for about five years and for its carrier bid procurement application for seven, says Dawn Salvucci, a product director at JDA.
Although JDA made a splash with its recent announcement, it isn't unique among supply chain software vendors in taking this route. Several other software providers have been quietly offering managed services for some time now. GT Nexus of Oakland, Calif., for instance, offers managed services to clients of its trade and logistics pOréal. Greg Kefer, the company's director of corporate marketing, says about a quarter of the company's customers retain the vendor's data services organization to manage the network for them. For these clients, GT Nexus handles tasks like partner integration and data standardization to ensure that data quality remains high, which is critical for supply chain visibility. Kefer adds that GT Nexus employees also work alongside select customers to help them manage the freight spend process from initial bids through freight bill auditing.
Another software vendor that provides managed services is i2 Technologies Inc. of Dallas, which offers support to users of its planning and forecasting apps on a contract basis. "We provide the pilot and plane with managed services," says Adeel Najmi, a vice president at i2.
For a monthly fee, i2 personnel will use the software to develop sales forecasts for individual stores down to the stock-keeping unit (SKU) level. "We take over the day-to-day work of maintaining the (forecast) model, publishing the plans, and doing the analytics," says Najmi. Although i2 employees develop the plan, he notes, the client still reviews and "blesses" it.
The service is not new; i2 has been doing this for five years now. So it's interesting to note that JDA, which is now jumping into managed services in a big way, announced last month it would be acquiring i2 for some $396 million. Among other benefits, the deal paves the way for the two to work together on managed services.
It appears that JDA's move comes at an opportune time. Najmi says he's seen an uptick in interest in managed services in recent months, particularly among consumer packaged-goods manufacturers. As for what's driving the interest, he believes it's the prospect of speedy access to the information his time-pressed clients need for decision making. "The number one reason (for the current interest in managed services) is the time to value," he says. "We can get them seeing results quickly."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.