Larry Jones is vice president of operations at Fortna Inc., a provider of software, professional services and equipment for logistics and distribution systems.
It used to be that when you bought appurtenances for your distribution center, you bought equipment, or maybe services. Today, you often buy a "solution." "Solution," of course, is vendor talk for equipment, hardware, software and systems designed to address a specific operating or performance need. If buying solutions sounds harder than just picking out equipment, that's because it is: Not only do you have to choose the right stuff, but you also have to choose the right vendor.
When it comes to material handing equipment, the easiest to buy are the so-called "commodity" items. With commodities, whether it's conveyors or racks and shelving or motorized equipment, you can easily compare features—the roller size, bearing type, gauge of steel, type of paint, capacity. Once you've drawn up a list of products that meet your needs, it's a fairly simple matter to evaluate the vendors: Who will respond quicker to equipment issues? Will they deliver on time? Can I trust this company?
But when you make systems or "value-add" purchases—items requiring specialized engineering, software and software interfaces, or integration with other equipment and software—there are few measurable standards and features to fall back on. And that is not all. With a systems purchase, you're almost certainly entering a relationship of some duration with the vendor, which makes your choice of suppliers all the more critical. Usually anyone can supply equipment that will meet or exceed system capacity requirements. What counts is how well the engineering and technical staff plan, handle the installation, and implement and integrate the software and systems … and what kind of support they provide in the long term.
That's hard—so hard, in fact,that buyers typically retreat to familiar ground. They spend most of their time comparing the commodity parts of a proposed system, while attempting to quantify the basically unquantifiable "soft deliverables," such as support and training.
This is often their biggest mistake. When systems with a high degree of complexity fail, it's rarely related to any particular commodity item provided with that system. Problems with equipment are readily solved by replacing, repairing or adjusting components already on hand. Problems with poor engineering, project management, and software, however, are not so easily addressed.
Though due diligence may seem more like due drudgery, it's important to ask questions from the outset: Who will be responsible for project management? (Every vendor will tell you it provides project and site management, but who will actually perform these functions?) Does the salesman play this role and is he or she trained in these disciplines? Salesmen playing at project management can lead to poor team communication and forgotten functionality. What software is provided to communicate with all the material handling equipment and existing or future WMS packages? Is the software proven, stable and easy to configure? Who will be on site during training? Who is available to support the site and the software long after acceptance?
Then there's the matter of software specifications. Many times, vendors subcontract the spec'ing function to a third-party provider. But this raises the risk of miscommunication and may lead to limited site support . Usually a third-party provider's bid on a project includes a defined number of hours for on-site training and after-startup support. And all too often, the third-party's lack of involvement at the front end of the project, developing the proposal and detailed description of the operations, can cause confusion during delivery related to committed time on site, availability of remote support and missed software functionality.
A hard look at software vendors
Sooner or later, most DC managers will find themselves pulled into the systems purchase process—largely because they know their problems better than any IT staffer—or software vendor—does. Whether it's a warehouse management system (WMS), transportation management system (TMS) or a warehouse control system (WCS), the natural starting point for most buyers is to consider the software's ability to meet project and business requirements. Defining how the software will work may include conducting a detailed, scripted demonstration of the various systems under consideration using real data and simulated processes, or even a complete multi-week conference room pilot to actually test and demonstrate all of the software's capabilities. Spending the time in the beginning to fully understand the functionality reduces problems in the project implementation. And don't just ask whether the software can meet the requirements; ask how the requirements will be met .
Then you have to figure out who can deliver. To do that, you have to consider each software provider's capabilities and size and make some educated guesses as to how well it will work with your project team and organization. Check references, visit active client sites, and find out who will be working on the project as well as how the project will be supported in the long term. The individual people assigned to the project have a great impact on successful implementation. Find out whether vendors will provide detailed documentation on the base software and any special modifications. Ask if it's possible to obtain the source code for the software or whether the vendor will maintain an escrow account so that you have recourse in case of future problems. When discussing the software with references, ask about support and response time for problem resolution during implementation. The rule of thumb here is that every hour spent up front researching the vendors, their products, their personnel and their delivery models will save you three times that during commissioning.
When selecting the software vendor, be sure to include the people who will use and maintain the software. If you have no internal support capabilities, arrange to have the vendor provide this service and make sure this is included in all contracts. Keep in mind that the more support the vendor has to provide,the higher the ongoing maintenance costs will be. Support provided in-house helps ensure more rapid problem resolution and keeps the focus on moving product through the material handling system.
As with commodity items, many times software vendors will claim to make a product with the same capabilities as competitors' products; however, taking the time to "look under the covers" can often be the difference between a successful, on-time implementation and a long, drawn-out struggle. Depending on the type of software and the business requirements, most software solutions can eventually be jerry-rigged to work. But there is a major risk that while you're trying to make it work, customers unhappy over your execution may desert you. Software is not a commodity, and very often the difference between success and failure is as simple as asking how a process works and making sure adequate support is provided.
Not so easy picking
A company that's evaluating warehousing or transportation software generally has no illusions about being involved in a complicated systems purchase, but other cases may not be so clear cut. It's not unusual for buyers to be thrown off track by what appears to be a straight forward commodity purchase but is actually a more complex systems purchase. Take picking modules, for example. Whether rack, shelving, or mezzanine-supported, picking modules may appear to be a simple commodity. Exclusive of any powered equipment, they're static structures. They don't require software interfaces or I/O checkout. Most customers choose their picking modules based on the type of product to be stored or operational requirements (pallet flow, carton flow, or piece picking from shelving?). And they're quick to dive into the details: What type of rack upright, capacity, color and type of coating?
But by focusing on what they know—the individual components—they risk overlooking the systems aspect of a functioning module. Given their large number of pieces and components, picking modules are engineering intensive. And though stand-alone, static structures,they interface with operations and the people using them. Though it might not be evident initially, the buyer will undoubtedly face innumerable complex questions. For example, what type of flooring will you need? (Flooring requirements vary, based on the sprinkler requirements and the type of picking.) Or if operators will be picking to cart, what type of wheels do the carts need? Have the operations and engineering staff reviewed any conveyor interfaces related to replenishment, takeaway and trash removal? Where will pallet returns be installed? How many are needed? Are pallet slide rails required? Should pallet flow positions have safety bar grating under each pallet position? Should safety netting be used around stairs and outer walkways? Does the setup conform to government code and site requirements?
These are all things to ask the vendors who come in to bid. And while they're on site, find out whether they have in-house professional project managers, site managers and engineers. Focus on the delivery process of both the integrator and the manufacturer. Make sure the vendors understand the key tasks and the sequence in which they must be completed and verify that these "critical path" elements and their completion deadlines are reflected accurately on the project schedule. Interview the prospective key personnel from both the integrator and the manufacturer. Push for strong individuals with decision-making authority as project managers at the integrator and manufacturer levels. Place a like-minded individual within your organization as the primary contact and key decision maker.
And always, always ask to meet the engineering staff. The quality of the engineering affects not only the structural design but also the functionality. Engineers have to accommodate the client's demands within the limitations of both building and design constraints all the while dealing with the various issues that will touch on available storage and personnel access.
Though at this point, you might be tempted to beat a retreat to familiar ground and concentrate on the rack uprights, rollers and coatings, don't make that mistake. Look past the components; you're buying a relationship.
The U.S., U.K., and Australia will strengthen supply chain resiliency by sharing data and taking joint actions under the terms of a pact signed last week, the three nations said.
The agreement creates a “Supply Chain Resilience Cooperation Group” designed to build resilience in priority supply chains and to enhance the members’ mutual ability to identify and address risks, threats, and disruptions, according to the U.K.’s Department for Business and Trade.
One of the top priorities for the new group is developing an early warning pilot focused on the telecommunications supply chain, which is essential for the three countries’ global, digitized economies, they said. By identifying and monitoring disruption risks to the telecommunications supply chain, this pilot will enhance all three countries’ knowledge of relevant vulnerabilities, criticality, and residual risks. It will also develop procedures for sharing this information and responding cooperatively to disruptions.
According to the U.S. Department of Homeland Security (DHS), the group chose that sector because telecommunications infrastructure is vital to the distribution of public safety information, emergency services, and the day to day lives of many citizens. For example, undersea fiberoptic cables carry over 95% of transoceanic data traffic without which smartphones, financial networks, and communications systems would cease to function reliably.
“The resilience of our critical supply chains is a homeland security and economic security imperative,” Secretary of Homeland Security Alejandro N. Mayorkas said in a release. “Collaboration with international partners allows us to anticipate and mitigate disruptions before they occur. Our new U.S.-U.K.-Australia Supply Chain Resilience Cooperation Group will help ensure that our communities continue to have the essential goods and services they need, when they need them.”
A new survey finds a disconnect in organizations’ approach to maintenance, repair, and operations (MRO), as specialists call for greater focus than executives are providing, according to a report from Verusen, a provider of inventory optimization software.
Nearly three-quarters (71%) of the 250 procurement and operations leaders surveyed think MRO procurement/operations should be treated as a strategic initiative for continuous improvement and a potential innovation source. However, just over half (58%) of respondents note that MRO procurement/operations are treated as strategic organizational initiatives.
That result comes from “Future Strategies for MRO Inventory Optimization,” a survey produced by Atlanta-based Verusen along with WBR Insights and ProcureCon MRO.
Balancing MRO working capital and risk has become increasingly important as large asset-intensive industries such as oil and gas, mining, energy and utilities, resources, and heavy manufacturing seek solutions to optimize their MRO inventories, spend, and risk with deeper intelligence. Roughly half of organizations need to take a risk-based approach, as the survey found that 46% of organizations do not include asset criticality (spare parts deemed the most critical to continuous operations) in their materials planning process.
“Rather than merely seeing the MRO function as a necessary project or cost, businesses now see it as a mission-critical deliverable, and companies are more apt to explore new methods and technologies, including AI, to enhance this capability and drive innovation,” Scott Matthews, CEO of Verusen, said in a release. “This is because improving MRO, while addressing asset criticality, delivers tangible results by removing risk and expense from procurement initiatives.”
Survey respondents expressed specific challenges with product data inconsistencies and inaccuracies from different systems and sources. A lack of standardized data formats and incomplete information hampers efficient inventory management. The problem is further compounded by the complexity of integrating legacy systems with modern data management, leading to fragmented/siloed data. Centralizing inventory management and optimizing procurement without standardized product data is especially challenging.
In fact, only 39% of survey respondents report full data uniformity across all materials, and many respondents do not regularly review asset criticality, which adds to the challenges.
Artificial intelligence (AI) tools can help users build “smart and responsive supply chains” by increasing workforce productivity, expanding visibility, accelerating processes, and prioritizing the next best action to drive results, according to business software vendor Oracle.
To help reach that goal, the Texas company last week released software upgrades including user experience (UX) enhancements to its Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) suite.
“Organizations are under pressure to create efficient and resilient supply chains that can quickly adapt to economic conditions, control costs, and protect margins,” Chris Leone, executive vice president, Applications Development, Oracle, said in a release. “The latest enhancements to Oracle Cloud SCM help customers create a smarter, more responsive supply chain by enabling them to optimize planning and execution and improve the speed and accuracy of processes.”
According to Oracle, specific upgrades feature changes to its:
Production Supervisor Workbench, which helps organizations improve manufacturing performance by providing real-time insight into work orders and generative AI-powered shift reporting.
Maintenance Supervisor Workbench, which helps organizations increase productivity and reduce asset downtime by resolving maintenance issues faster.
Order Management Enhancements, which help organizations increase operational performance by enabling users to quickly create and find orders, take actions, and engage customers.
Product Lifecycle Management (PLM) Enhancements, which help organizations accelerate product development and go-to-market by enabling users to quickly find items and configure critical objects and navigation paths to meet business-critical priorities.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.