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.
As any logistics professional can tell you, the old saw about making sure the left hand knows what the right is doing could well have been written about distribution operations. By coordinating their transportation and warehousing activities, shippers can realize the kinds of efficiencies that lead to big savings—like consolidating shipments into full truckloads or building pallets to optimize unloading.
But in the past, companies often missed out on these opportunities. The reasons had largely to do with a failure to communicate on the part of their software apps. Shippers have traditionally used separate systems to manage their warehouse and transportation operations—a warehouse management system (WMS) for activities like picking and packing and a transportation management system (TMS) for carrier selection and routing. And the two apps didn't work together. "Supply chain execution applications emerged as silos—warehouse systems are independent of transportation," says Gartner analyst Dwight Klappich.
An emerging class of software addresses the need for closer cooperation between the two functions. These specialized apps, which could be termed logistics optimization packages, sit between the WMS, the TMS, and the company's enterprise resource planning (ERP) system and coordinate their activities for optimal performance.
The advantage for users is that they don't have to jettison their existing WMS or TMS (the new apps are designed to complement and enhance the existing systems, not replace them). As Klappich notes, most companies can't afford to "rip and replace" all of their applications, but they can afford to incorporate the new convergent applications into their operations.
One company that markets optimization software is Transportation|Warehouse Optimization (TWO), located in Franklin, Tenn. Company president Thomas Moore says TWO's solution uses a three-step approach to optimization. First, it calculates exactly how much palletized freight can be loaded onto a particular truck or trailer so it can group orders into the most efficient loads. Next, it uses inventory data drawn from the WMS to generate step-by-step picking and pallet-building instructions as well as a detailed loading plan that maximizes trailer cube and minimizes product damage. "If you think about a WMS, it does not understand you can't put bricks on top of a case of eggs," says Moore.
Then, once the TMS has selected a carrier, the optimization software runs a final check to make sure the designated pallets will indeed fit on the truck and that the load falls within legal weight limits.
Moore reports that shippers that have used TWO's solution have seen their freight bills drop anywhere from 4 to 10 percent. And that's just part of the story. Because the software takes the guesswork out of picking and pallet building, workers are able to make more productive use of their time. As a result, Moore says, his company's clients have also saved between 10 and 15 percent on labor costs.
Another company that offers this new type of software is Dutch software developer Ortec. Ortec's LEO solution, which is designed for SAP users, includes modules for optimizing order picking, carton packing, pallet building, vehicle loading, and route planning. These modules, which are embedded in SAP, are designed to be used alone or in any combination. By using all five simultaneously, companies can optimize the entire distribution process. Bobby Miller, vice president for product strategy and industry relationships in Ortec's Atlanta office, reports that his company's clients have shaved between 5 and 15 percent off their freight costs by using the solutions. (Note: All of these solutions are also available in a Windows version.)
Software analysts say these "hybrid" solutions that perform both planning and execution tasks have the potential to save shippers tremendous amounts of money. "Many 'full truckloads' today are actually only 80 to 85 percent full, and some of this leakage is caused by poor load planning," says analyst Steve Banker of ARC Advisory Group. "Improving load factors by 5 or 10 points could lead to significant cost savings."
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.