LOGISTICS MANAGEMENT

SUPPLY CHAIN
SOFTWARE

Our editors have curated several feature stories that neatly encapsulate
the current state of the supply chain management software market as consolidation,
competition and the Cloud are re-shaping the landscape around the world.

®
 LOGISTICS MANAGEMENT
welcome
SUPPLY CHAIN SOFTWARE Integrating systems
to stay ahead
contents Digital commerce
and the subse-
State of TMS: Interest continues to rise 10 quent challenge
As capacity tightens and freight rates rise, both new and established vendors of omni-channel
are coming up with solutions that fit the smaller shipper’s budget while also fulfillment have
placed an enor-
offering all of the bells and whistles that larger systems offer—and logistics
mous amount of
operations of all sizes are catching on. pressure on logis-
tics professionals
WMS/Inventory Management: 6 trends for the modern age 14 here in the U.S. and around the world.
Here’s how the next generation of warehouse and inventory management And while customer services expecta-
systems are evolving to help logistics operations operate more efficiently and tions have been pushed to new levels, ship-
pers continue to face tighter capacity con-
improve their bottom lines in our brave, new digital age. straints and rising rates in nearly every major
mode of freight transportation while distri-
State of GTM: Taking it to the next level 20 bution center (DC) operations are being
As more and more shippers finally turn to technology to help them tackle pushed to the brink of their capabilities.
their most pressing global trade issues, the software sector that supports it is To help keep pace, savvy logistics pro-
fessionals are applying more supply chain
looking ahead and figuring out what lies around the next corner.
management software than ever to better
mange the increasing complexity. By inte-
6 ways to improve your inventory management right now 28 grating transportation management systems
Plagued by stock-outs and poor inventory visibility? Here are a few practical (TMS), warehouse management systems
best practices and technologies that can significantly improve inventory (WMS), global trade management (GTM)
management inside today’s rapidly evolving warehouse and DC operations. ad labor management systems (LMS) into
their technology stack, shippers are stream-
lining operations and gaining the visibility
DOM’s impact on customer experience 36 they need to stay ahead.
Distributed order management (DOM) suppliers and users tout its ability to In this Special Digital Issue, the editors
strengthen the customer experience through better ties to store-level systems of Logistics Management have curated sev-
to improve buy-online/pickup-in-store efforts. eral feature stories that neatly encapsulate
the current state of the supply chain man-
agement software market as consolidation,
The evolving DC teck stack 44 competition and the Cloud are re-shaping
With the growth of e-commerce, the technology stack for distribution centers the landscape around the world.
is expanding. We explore why WES/WCS software is gaining prominence
and share how operations are expanding their use of data science.

Labor management systems get smart 50

Labor management systems have started to expand beyond engineered Michael A. Levans, Group Editorial Director
standards by integrating machine learning and other capabilities that further Comments? E-mail me at
[email protected]
enhance their position in the supply chain software stable. Follow me on Twitter: @MikeLeva

Editorial Staff Peerless Media, LLC

Brian Ceraolo
Michael Levans Sara Pearson Specter Wendy DelCampo
President and Group Publisher
Group Editorial Director Editor at Large Art Director
Kenneth Moyes
Bob Trebilcock Roberto Michel Polly Chevalier President and CEO
Executive Editor Editor at Large Art Director EH Publishing, Inc.

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CMYK GRAYSCALE B/W

2 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
 NOT ALL
TRANSPORTATION
OPTIMIZERS ARE
CREATED EQUAL

The best transportation management systems (TMS) deliver

insights, streamline logistics, and dramatically reduce shipping
costs. Watch this video to see the power of the MercuryGate TMS
and Mojo optimization in action.

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Supply Chain & Logistics Technology

State of TMS:

Interest continues
to rise
As capacity tightens and freight rates rise, both new and established
vendors are coming up with solutions that fit the smaller shipper’s budget
while also offering all of the bells and whistles that larger systems offer—
and logistics operations of all sizes are catching on.

BY BRIDGET MCCREA, CONTRIBUTING EDITOR

4 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
 A
critical link in the supply chain, transportation is costly, time-consuming, and
sometimes difficult to manage—and it’s going to get even more complex as
capacity tightens and rates continue to rise over the course of 2018.
Approached haphazardly, transportation management can quickly eat up human
resources, consume a good portion of logistics spend, and can leave customers ask-
ing questions like: “Where’s my stuff?” But done right, transportation helps shippers
create efficiencies, improve productivity, save money, and provide premium levels of
customer service.
And while several strategies can be used to attain these benefits, transporta-
tion management systems (TMS) consistently stand out as one of the best tools
for streamlining the transportation component of the supply chain.
Acting as the logistics management “hub,” TMS handles route planning and
optimization; freight audit and payment; order visibility; carrier management;
and other critical functionalities that help shippers digitally manage and optimize
their transportation networks. Historically offered as an on-premise software
application, TMS has since largely moved into the Cloud and, as such, provides
real-time, always-on collaboration across shippers, carriers, trading partners and
customers.
In this annual examination of the state of the TMS market, we’ll look at the cur-
rent adoption trends for this software, show how vendors are innovating and coming
up with new functionalities and delivery methods, and discuss what’s ahead in 2018
for what can be the most valuable tool in the logistics manager’s toolkit.

Shifting to the Cloud

Vendor innovation plus the proliferation of e-commerce and omni-channel distri-
bution are both pushing more shippers to consider TMS as part of their overall
supply chain management strategy. Bart De Muynck, Gartner’s research director,
transportation technology, says adoption is particularly strong for shippers that
spend more than $100 million annually on freight.
“Those companies continue to invest heavily in TMS,” says De Muynck. Much

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 5
Supply Chain & Logistics Technology: TMS

of that activity involves shippers that

are “changing out” their current TMS TMS SAVINGS
and replacing it with modern platforms
that come with more bells and whistles In its most recent
“TMS Market Research Study,” with the
than their predecessors could offer.
“We’re seeing a lot of companies
moving from older, on-premise plat-
ARC Advisory group says companies
report an AVERAGE SAVINGS
of approximately 8% use of a
TMS
APPLICATION

forms to either multi-tenant [when

60%
Of these Simulation and
a single instance of software runs on savings, network design
a server and serves multiple tenants] nearly THESE
of users indicated FREIGHT
or Cloud-based solutions,” says De that less than SAVINGS Load consolidation and

10%
CAN BE lower cost mode selections
Muynck, noting that some shippers are
ATTRIBUTED
purchasing the software from vendors TO
Multi-stop
that they haven’t worked with before of the NET SAVINGS were route optimization
absorbed by the TMS
while others are sticking with their
original software providers. “At this
point, a lot of the older TMS solutions too expensive, too much of a hassle these companies are signing on thou-
are starting to be bypassed, and par- to implement, and didn’t really drive sands of new users with that strategy.”
ticularly if their vendors aren’t going to improved productivity, says De Muynck. Cloud Logistics, for example, ran a
be supporting them anymore.” The tide has turned over the last few $500-a-month subscription special in
Not to be outdone, small to mid- years, De Muynck notes, and now the 2017. “We saw a very high uptake in the
sized (SMB) shippers are also adopting market is coming out with solutions that number of companies using the solu-
TMS—a trend that’s being driven by a are cheaper, more relevant, and even tion,” he notes.
new crop of Cloud-only solutions that more user friendly. “These new solutions De Muynck says that these “loss
offer quick setup and affordable, or are so easy to implement and use that leader” strategies are creating a ground-
even free, subscription-based models. companies are very attracted to them, swell of SMB firms taking an interest in
“In 2017, we saw a huge growth in and particularly those shippers that are TMS—to the tune of tens of thousands
TMS usage by the SMB segment,” says dealing with challenges around capac- of new users across multiple vendors.
De Muynck, who points to AscendTMS ity and freight rates,” says De Muynck. And because those shippers bring their
as a lesser-known vendor that’s actually “They see TMS as a way to get more own carriers onto those networks, they
the “world’s largest” TMS vendor. “They productivity out of transportation.” also represent new levels of transac-
have over 15,000 companies using their Vendors have caught onto this trend, tional volume. “This plays into the
TMS, with a lot of those users being and are coming up with solutions that fit whole goal of transportation manage-
smaller shippers that are using the free the smaller shipper’s budget while also ment,” says De Muynck, “which is to
version of the software.” offering all of the bells and whistles that become more efficient and make more
larger systems are offering. efficient use of available capacity.”
If it’s free… “Companies like Kuebix and Cloud
Just 10 years ago, a company that spent Logistics are saying: ‘hey, if you’re a Strong return on investment
a few million dollars in transporta- smaller shipper, we’ll give you our solu- If there’s one factor driving more ship-
tion annually probably didn’t own a tion for free or at a very low cost,’” pers to adopt TMS it’s the strong return
TMS. That’s because the software was De Muynck says. “Within a week on investment (ROI) that these solu-

6 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
tions offer to companies of all sizes. more cost efficient to bring transporta- Looking ahead, De Muynck says
In its most recent “TMS Market tion management in-house.” TMS vendors will likely continue to
Research Study,” ARC Advisory group There are also more providers and shape their solutions’ functionalities
says companies report an average sav- solutions to choose from, with the lines around shipper challenges like capac-
ings of approximately 8% with the use between enterprise resource planning ity crunches and changing end-user
of a TMS application. Of these sav- (ERP) and best-of-breed solutions demands. “Capacity is tight and com-
ings, nearly 60% of users indicated that beginning to blur. “Right now, when you panies are out looking for their 2018
less than 10% of the net savings were look at the leading TMS suppliers, it’s bids and seeing that it’s not easy to
absorbed by the TMS. These freight a mix of both ERP and best-of-breed,” secure the capacity that they need,” De
savings can be attributed to simulation says Cunnane, who points to SAP, Muynck points out. “Wanting to control
and network design, load consolidation “Capacity is tight and companies are out looking for their 2018 bids and seeing
and lower cost mode selections as well
that it’s not easy to secure the capacity that they need. Wanting to control costs,
as multi-stop route optimization.
more of them are likely to turn to technology for help.”
“The growth of e-commerce and
omni-channel fulfillment continues — Bart De Muynck, Gartner
to help the market grow as well,”
says Chris Cunnane, an ARC senior Oracle, JDA, Descartes and TMW Sys- costs, more of them are likely to turn to
analyst, noting that in the last five tems as a few of the top players right technology for help.”
years, e-commerce revenues have now. “Whereas the rest of the market is Acknowledging the status of TMS
increased by 51% and are expected focused on offering more of a ‘point’ or as one of the most mature supply
to grow by 42% in the next five years. best-of-breed solution that fits into a dif- chain software segments, Cunnane
“This continued growth will make it ferent footprint.” says there really is “only so much that
more important for organizations to vendors can do” to improve upon their
utilize TMS. Additionally, it’s not just More speed, please platforms at this point. He sees back-
retailers turning to e-commerce; more As he looks around at the TMS market- haul optimization as a potential area
brands are selling products directly to place, Amit Sethi, senior manager for of innovation going forward for TMS
the consumer over the web.” logistics and supply chain at Capgemini, vendors that helps shippers figure out
Cunnane adds that one of the key says that he’s seeing less focus on trans- how to make the most of their return
drivers of the TMS market right now portation optimization and more focus freight movement.
are “barriers to entry that are lower on execution. “It’s a mature market, so innovation
than we’ve ever seen.” He credits the “TMS and its vendors have moved may slow down until we see one of the
continued growth of Cloud-based toward more online planning, and to newer players enter the market with
solutions with pushing those barri- flowing orders through automated sys- something that’s groundbreaking—
ers down over time. “Historically, if tems that vet, tender and ship without something no one else thought of,” says
you didn’t have $20 million in freight human intervention,” says Sethi. This, Cunnane. “Then suddenly there’s a race
spend, purchasing a TMS was out of in turn, has pushed optimization online, to try to get to where that vendor is, but
the question,” he says. “Instead, you with a focus on immediate execution— I don’t see any of those entries in the
would look to a third-party logistics versus “batching” orders for execution market right now.” •
provider to handle it for you. Now, at a later time. “This is being driven by
with the number of Cloud applications shippers that are more interested in —Bridget McCrea is a contributing
that are out there, suddenly it’s a lot speed versus optimization.” editor to Logistics Management

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 7
 Supply Chain & Logistics Technology

WMS/INVENTORY MANAGEMENT:

6 TRENDS
FOR THE MODERN AGE
Here’s how the next generation of warehouse and inventory
management systems are evolving to help logistics
operations operate more efficiently and improve their
bottom lines in our brave, new digital age.

BY BRIDGET MCCREA, CONTRIBUTING EDITOR

T
asked with supporting the fulfillment “The majority of companies out there are
across a growing number of distribution still using basic 101 warehousing at this
channels, warehouses and distribution point,” says Norm Saenz, managing direc-
centers (DCs) are increasingly looked upon as tor at supply chain consultancy St. Onge
strategic business assets versus cost centers. Co. “Even the larger shippers are trying
Where in the past a warehouse or DC was to get better in areas like automation,
simply a storage facility for goods or a place robotics, virtual reality, voice and radio fre-
to put “stuff” as it made its way through the quency identification, in an effort to get to
supply chain, the modern-day facility must be the ‘next level’ with
agile and capable enough to support brick-and- their warehousing.”
mortar, e-commerce, B2B, home deliveries and The good news is that software and
parcel shipments—to name just a few. equipment vendors aren’t resting on their
Achieving this balance requires one of two laurels, nor are they standing by and allow-
things: a whole lot of labor and real estate, or ing companies’ warehousing strategies to fall
advanced technology that helps to offset issues into the dark ages. From autonomous mobile
like high labor costs while also streamlining the robots to complete supply chain solutions
process and making it more efficient than ever. to advanced inventory tracking systems, the
And while most companies are at least options continue to proliferate and drive
thinking about how to make that happen, logistics professionals to develop smarter,
many are still using antiquated processes like more efficient facilities. With that in mind,
pen-and-paper and spreadsheets to manage here are six ways warehouse management is
inventory and track product movement within evolving, along with a peek at what we can
the four walls of the warehouse. expect in the next five years.

8 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
 Warehouse Control Systems (WCS)
in lieu of WMS
The walls between warehouse control systems
(WCS) and WMS are coming down, and the former is
Software that adapts playing a larger role in the overall management of a ware-
and personalizes house’s inventory. This is particularly true for companies
on the dime that are putting more automation into their warehouses
Much like their end customers and DCs, says Saenz.
expect quick, personalized service, Historically, WCS provided the interface for material han-
today’s logistics professionals are dling systems (i.e., carousels, sorters, conveyors, etc.), while
turning to their warehouse man- WMS managed processes, people, and activities like ship-
agement systems (WMS) software ments and orders. “We’ve worked with numerous companies
vendors and asking for systems that were putting in new automation along with new WCS
that accommodate their specific and looking at how to leverage their WCS investments for
company’s needs and pain points. warehouse management functionality,” says Saenz,
“WMS is kind of behind the who expects this trend to continue as the lines
curve right now in terms of between WCS and WMS continue to blur.
building out personalization,”
says Matthew Deep, vice presi-
dent of information technology Autonomous mobile robots
at DMLogic. “Going forward, on the warehouse floor
however, I expect WMS rollouts Wärtsilä and DHL have completed a successful
that go beyond the ‘round peg in pilot where the companies tested Fetch Robotics to inves-
a round hole’ approach, and that tigate possibilities to utilize the latest technology innova-
feature very flexible, adaptable tions in the daily operations of the warehouse. The robots
software functionalities.” are designed to work alongside employees, and to relieve
For example, Deep says he sees them from physically strenuous tasks.
more logistics operations asking At Rochester Drug, a mobile piece-picking robot
for WMS that can be built out named Adam roams aisles of inventory, selecting items
rapidly and put in place without directly from shelves without human intervention. Finally,
having to go back to the vendor for at Whirlpool, 54 robotic tuggers, each with a stereo
help, support, and additional train- camera-based navigation system from Seegrid, deliver
ing. “Through those customiza- washing machine parts to 24 locations on assembly and
tions, logistics managers can train sub-assembly lines in Clyde, Ohio.
their own people a lot faster than This is just a glimpse of what’s to come on the mobile
they’d be able to with a more stan- robot front, where Dwight Klappich, research vice president
dard WMS offering,” says Deep. at Gartner, says we’re “on the cusp of some very radical
“Knowing this, software developers changes to the warehouse thanks to automated robots.”
are now building out platforms And while warehouses and DCs have been
that are as flexible as possible, and equipped with what Klappich calls “bolted to the floor”
that cater to an increasingly fickle automation for nearly 40 years now, such equipment
customer.” has been expensive to design, build, and install—
and complicated to support.
“But once a logistics operations has paid all of that
back, it could dramatically lower its costs to handle prod-
uct,” Klappich points out. “In the future, all of that tech-
nology may be completely or mostly autonomous.”

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 9
Supply Chain & Logistics Technology: WMS/Inventory Management

Robots that coordinate with the workforce

To be most effective on the warehouse floor, Clint Reiser, research
analyst with Boston-based ARC Advisory Group, says that the robots
themselves are going to have to become more intelligent and universal in their
applications—and they’re going to have to learn how to play well with an
existing, human workforce.
Reiser points to Fetch Robotics as one company that’s making headway in this direction, having
successfully piloted a project where a U.S. customer wanted robots that could sit within a certain zone on
the warehouse floor, collect items gathered by human pickers, take those goods to a packing station and then
return to the picker after its cart was emptied. “This is one way robots are helping to streamline things, but
there are definitely more opportunities ahead in that realm,” says Reiser, who sees the optimization of robot-
ics in conjunction with pickers as a good way to streamline warehousing processes without adding additional
labor. “It’s all about getting the robotics coordinated with the workforce.”

Advanced planning capabilities that flip Collaborative

from rear-view mirror to windshield robotics projects
Klappich sees an industry that’s lagging behind its coun- Looking out a few years,
terparts when it comes to advanced planning. In fact, he says it’s Reiser expects more technology ven-
not unusual at all for warehouse managers to have the mindset dors to join hands and come up with
of, “Well, you can’t plan in a warehouse. Our job is to do what we automated solutions that are spe-
have to do to get stuff in and out the door.” cifically targeted to the warehouse.
As a result, warehouse and logistics managers are often very This is an important point because
good at expediting, but not as good at planning for the here-and- so many of today’s innovators on the
now or for the future. However, that could change over the next robotics side are small, startup firms
few years as forces like e-commerce and omni-channel are push- that may be good at inventing and
ing managers to rethink the way they approach their jobs. innovating, but may not necessarily
“When you get into high-volume e-commerce, more com- be able to sustain their businesses
panies are using warehouse execution systems [WES] to apply for the long haul.
more sophisticated logic to how they manage their work,” says “In the next couple of years, we’re
Klappich, who sees optimization and machine learning (i.e., going to see some interesting stories
giving computers the ability to learn without being explicitly pro- of how systems integrators/ware-
grammed to do so) techniques as viable ways to plan in advance house automation providers work
in even the most challenging distribution environment. together with smaller, autonomous,
“Both Manhattan and Softeon are developing [solutions] that collaborative robotics firms to develop
help companies look more carefully at how to apply work opti- new solutions,” Reiser predicts. “The
mization techniques in high-volume distribution environments, established WMS vendors will also get
such as those that we see with e-commerce,” says Klappich. in on the game and come together on
In a similar vein, he expects more companies to move away some projects. It will be interesting to
from “after the fact” reporting in areas like labor, where questions see how all of that plays out.” •
like: “how did Sally do yesterday?” can be flipped around to “what
do we need to accomplish today or this week?” or “do we need Bridget McCrea is a contributing
to shift workers from receiving to packing because the latter is editor to Logistics Management
behind schedule?”
“With good advanced planning,” says Klappich, “shippers can
effectively flip the emphasis from the rear-view mirror to the
windshield, and gain some good efficiencies as a result.”

10 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
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Supply Chain & Logistics Technology

NEXT
State of GTM:
TAKING IT TO THE

As more and more shippers finally turn to technology to

help them tackle their most pressing global trade issues,
the software sector that supports it is looking ahead and
figuring out what lies around the next corner.

BY BRIDGET McCREA, CONTRIBUTING EDITOR

T
hey go by names like Amber Road, costs that come when shipments are non-
Descartes, Aptean, and Infor, and compliant. These solutions also streamline
they’ve carved out a niche for them- and automate business processes and help
selves by providing the software engines that shippers determine the “total landed cost” of
help today’s global supply chains run with less their global shipments.
friction. As the makers of global trade man- “With trade becoming global, it became
agement solutions (GTM), these and other imperative for vendors to make their produc-
vendors help shippers stay in compliance tion and supply chains as efficient as possi-
with the many regulations that govern cross- ble,” says a recent GTM report from technol-
border shipments, and in a very automated ogy market research firm Technavio. “Quick
manner. and efficient communication between inter-
Adept at screening against sanctioned mediaries such as transportation and logistics
party lists, managing export licenses, service providers, custom brokers, foreign
maintaining export classification, handling trade agents and third-party service providers
embargo checks, managing classification is imperative. GTM solutions can only help
codes, generating import/export documents, organizations better achieve this and help
and ensuring import controls, GTM is best them gain an edge over their competitors.”
known for how it helps shippers reduce the Over the next few pages we’ll explore the

12 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
 LEVEL
current state of GTM in the broader realm of supply
chain software, discuss how shippers are leveraging
these mainly Cloud-based platforms, and highlight a
few new capabilities that may soon work their way into
the GTM landscape.
area, says McNeill, who points out that someone “still
has to be responsible for the device.” In other words,
if a shipper is using a carrier that provides ocean
container tracking, an individual still has to put the
tracking device on the container. In most cases, that
responsibility falls on the supplier’s shoulders, but it
Global trade on a tear can also be handled by a third-party logistics (3PL)
Global trade is on a tear, and it’s taking the world’s firm or even by a customer.
shippers right along for the ride. According to the “This is one area that presents a challenge, but the
World Trade Organization’s (WTO) most recent bottom line is that vendors are making it easier for
predictions, the volume of world merchandise trade shippers to do the tracking and tracing as a whole,”
volume grew by 3.6% in 2017 (up from 1.3% in 2016), says McNeill, “with easier to use devices and Cloud-
and is on track to grow by 3.2% this year. Accord- based platforms where everyone involved can share
ing to the WTO, stronger growth in China and the the information and data.”
U.S. boosted demand for imports, which “spurred Those Cloud-based platforms—which manage
intra-Asia-trade as demand was transmitted through activity that happens outside of the four walls of the
regional supply chains.” typical enterprise—are also having an impact on the
And as world trade volume ebbs and flows over GTM space and on how shippers use and interact
time, GTM remains a stalwart in the pool of supply with the software. “Thanks to the Cloud, users are
chain software applications that help shippers work getting more real-time, accurate information,” says
smarter, better and more efficiently in the current McNeill, “and avoiding the latency associated with
business environment. legacy systems like electronic data interchange (EDI),
This year, Will McNeill, principal research analyst where it could be hours or days later before the infor-
with Gartner, says that he’s seeing high demand for mation becomes available.”
track-and-trace capabilities on the global trade front,
where companies like Sendum, TransVoyant and Keeping them compliant
FourKites are providing more real-time visibility and Import and export compliance is a complicated beast
location-based services to their users. “We’re definitely that’s not getting any easier to tame, and particularly
seeing a renewed interest in hardware-based options as more country-to-country trade restrictions and
like GPS, RFID and sensors,” he says. rules emerge and existing trade rules (i.e., NAFTA)
That renewed interest is being driven by lower are either altered or done away with completely.
hardware/device costs and easier access to the tech- “Compliance is an ongoing, complex issue,” says
nology itself. But there’s still room to grow in this Amit Sethi, senior manager for logistics and supply

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 13
Supply Chain & Logistics Technology: GTM

chain at Capgemini, “but I don’t think software vendors do way on the web, are fulfilling companies’ needs for flexible,
enough to push the envelope on compliance solutions—they connected GTM solutions.
could be doing more in this area.” Also driving the market right now are a number of emerg-
In looking at current GTM adoption rates, Sethi says the ing technologies that range from machine learning to artifi-
fact that more vendors are offering Cloud-based platforms cial intelligence to blockchain, all of which are expected to
is helping to buoy those rates. That’s because today’s ship- have continued impact on many different facets of business
pers tend to not think about activities like product clas- and life.
sification and compliance in isolation, but rather as part of “I think we’re going to start to see some GTM vendors talk-
their overall supply chain processes. This is especially true ing about how they’re applying machine learning (i.e., when
within the context of the globalized supply chain, where computers can learn and take actions without being explicitly
a growing number of companies are trading with foreign programmed) in their solutions,” McNeill predicts. Apply-
business partners. ing machine learning to real-time visibility, for example, can
“From a shipper’s perspective, and particularly with provide “all kinds of new insights,” he adds, such as improved
the advent of e-commerce, the need for global trade clas- estimated time of arrival (ETA) calculations.
sification, documentation, and export/import filing rules “You can always call your carrier and find out when a ship-
and regulations is only going to increase,” says Sethi. “As a ment is slated to arrive and then calculate the total time
result, GTM is beginning to get a bit more traction than it that it’s going to take to get to its destination,” says McNeill.
has in past years.” “Combine real-time visibility with machine learning, however,
That traction should continue gaining momentum in 2018, and you’ll get more accurate, faster results—immediately.”
and mainly because “there’s no way the compliance require- However, this example just scratches the surface of how we
ments are going down from this stage,” adds Sethi, who points might see machine learning applied in the supply chain space,
to the Oracle GTM, which is built on the vendor’s transporta- McNeill notes, adding that “right now, every single Gartner
tion management system (TMS) platform, as one example of analyst is talking about machine learning to some degree.” •
a cloud-based platform that’s gaining popularity among ship-
pers. Also, he says vendors like GT Nexus, that allow shippers —Bridget McCrea, is a contributing editor
to manage their global trade activities in a very collaborative to Logistics Management

The Global Blockchain: Supply chain of the future?

C urrently, many industry analysts are also talking about blockchain—a digitized, decentralized, public ledger of all cryp-
tocurrency transactions—and the role it will play in the supply chain in 2018 and beyond.
As part of those conversations, Gartner, in its “2018 Top 8 Supply Chain Technology Trends You Can’t Ignore” report,
says that while most supply chain management related blockchain initiatives are nascent at this point, it’s ripe
territory for blockchain concepts because of the distributed, multi-enterprise nature of complex global value chains that rou-
tinely conduct business among multiple parties.
“Supply chain management trails other areas in consideration of blockchain technologies. However, certain highly
decentralized supply chain management functions are prime candidates for this technology, such as smart contracts or
traceability and authentication,” the Gartner report states, pointing out how Walmart is using blockchain to track pack-
ages of mangoes from farm to store shelves and Maersk Line is using it to share shipping data and enable multiple
parties to select insurance terms.
“I’m skeptical about blockchain because more than 50% of inbound messages are still in EDI format—technology that’s
30 years old—and expecting those same companies to use blockchain is unrealistic,” says Gartner’s McNeill. “However,
we’ve already identified a few use cases where the technology may be applicable, although overall adoption is going to be
slow and low.”
Capgemini’s Sethi has a slightly rosier outlook, but admits that the integration of blockchain and global trade is still very
much in its infancy. “Some software providers have made progress in this area, and I personally think blockchain is the
technology that will power global trade in the future,” he says,” especially with most of that activity coming to the Cloud
versus through on-premise software. I’m confident that once vendors start incorporating blockchain technology into their
software solutions, shippers will get excited about it.”
—Bridget McCrea, contributing editor

14 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
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16 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
 6 to Improve
Your Inventory
WAYS
Management
Right Now
Plagued by stock-outs and poor inventory visibility? Here
are a few practical best practices and technologies that
can significantly improve inventory management inside
today’s rapidly evolving warehouse and DC operations.

I
f the notion of folding flying drones into your warehouse inventory
management approach sounds far-fetched, think again. In August,
Massachusetts Institute of Technology (MIT) revealed a new way
to combine drones and RFID technology to improve stock-keeping
processes. Dubbed “RFly,” the system enables small, safe, aerial
drones to read RFID tags from tens of meters away while identifying
the tags’ locations with an average error of about 19 centimeters.
MIT researchers envision the system being used for continuous monitoring, to pre-
vent inventory mismatches, and to find the location of individual items in large ware-
houses. By incorporating drones and RFID into the stock-keeping process, shippers
may be able to more effectively optimize inventory levels, reduce stock-outs, improve
stock visibility, track orders, and reduce the possibility of human error.
“In 2016, the U.S. National Retail Federation reported that shrinkage—or loss of
items in retail stores—averaged around $45.2 billion annually,” Fadel Adib, the Sony
Corp. career development assistant professor of media arts and sciences, whose MIT
Media Lab group developed the new system, told MIT News. “By enabling drones to
find and localize items and equipment, this research will provide a fundamental tech-
nological advancement for solving these problems.”

BY BRIDGET MCCREA, CONTRIBUTING EDITOR

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 17
Supply Chain & Logistics Technology: Inventory Management

Drones not your thing? Boston-based Commonwealth Supply powerful wallop that shippers can use
Try this instead Chain Advisors, says that this is a step to address their inventory management
Of course, solid inventory management that many shippers overlook. “Focus challenges. “When you can get your
doesn’t require an unmanned aerial on knowing exactly what’s in every bin demand management right,” says Banker,
vehicle and individual RFID tags. In in the warehouse in real-time, all the “you know to have your inventory in the
fact, there are several best practices and time,” Hobkirk says, noting that a ware- right place and at the right times.”
technologies that, when used on a stand- house management system (WMS) is Consider adding GPS technology to your
alone basis or combined with other plat- the best tool for the job. inventory management lineup. Most often
used for vehicle navigation, satellite-based
“By using a WMS for bin-level controls, every- navigation systems are also being used
thing that come out of the bin gets tracked in to manage inventory in the supply chain.
real-time. When you can achieve this, then you Saenz says he recently worked with
a battery distributor that was using the
can start to move to cycle counting instead of technology to track inventory in its supply
having to conduct full physical inventories, the chain, and that the GPS system reports
latter of which are usually huge events that hog on the status and actual performance of
inventory for the company.
resources and kill productivity.” “They wanted to know where their
—Ian Hobkirk, president, Commonwealth Supply Chain Advisors rental units were out in the market,”
says Saenz, “and also the charging sta-
forms, can significantly improve inven- “By using a WMS for bin-level con- tuses and probability of failure for those
tory management for today’s warehouses trols, everything that come out of the units.” After testing out an RFID system
and DCs. Following are six of them. bin gets tracked in real-time,” adds Hob- that didn’t meet its needs, the company
Before you invest, explore your cur- kirk. “When you can achieve this, then started using GPS instead and is happy
rent systems. “Inventory management you can start to move to cycle counting with the results. “We’re seeing compa-
doesn’t have to be overly complicated,” instead of having to conduct full physi- nies like Geoforce introduce solutions
says Norm Saenz, managing director cal inventories, the latter of which are that can help track inventory out in the
at the supply chain consulting firm St. usually huge events that hog resources supply chain,” says Saenz, “where vis-
Onge Co. In many cases, for example, it and kill productivity.” ibility isn’t always easy to achieve.”
can be as simple as having an inventory Fold demand management and Give wearable scanning devices
management system that incorporates inventory optimization into the mix. another second look. Wearable computers
bar-coding and, in turn, enables real- For customers to be happy, inventory are helping today’s warehouse and DC
time visibility of inventory. has to be in the right place at the right workers become more mobile, hands-free
“You can get this without having to time. Carry too much of any SKU in and accurate in a world where smaller,
invest too much money,” says Saenz. the wrong place and you could wind up more frequent orders are making their
“In fact, most legacy software packages losing money and negatively impacting jobs more challenging than ever. But
and enterprise resource planning (ERP) customer service. even with the proliferation of wearable
systems incorporate some level of inven- To achieve this balance, Steve Banker, scanning devices on the market, Hobkirk
tory management. It’s not like you need vice president of supply chain manage- says a lot of logistics professionals are
a Tier One system to get good inventory ment at ARC Advisory Group, says that overlooking the technology’s true value.
management systems and support.” shippers can use traditional inventory These devices help with accuracy
Start by establishing bin-level inven- management tools plus demand man- and control, but we don’t see them
tory controls. It sounds simple enough agement and inventory optimization being used as widely as they could be,”
in theory, but Ian Hobkirk, president at solutions. Together, these three pack a says Hobkirk, who sees a high volume

18 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
of shippers using handheld scanners
for inventory management. Because Ace Hardware: Using technology to reduce
operators have to physically pick these inventory and stock-outs
S
devices up—and then look at them and ince it was founded in 1924 by a small group of Chicago hardware store own-
put them back down—companies miss ers, Ace Hardware Corp., has had quite an impact on the retail landscape.
out on the benefits that hands-free Early on, for example, it began allowing individual stores to purchase merchan-
technology provides. dise in bulk in order to save money and to buy at the lowest possible price. This
“Handheld devices are clunky and arrangement helped even the smallest stores compete more effectively in a mar-
ketplace where large, national retailers tend to have the biggest buying power.
often lead to errors or situations where
Fast-forward to 2017 and Ace remains committed to continuous improve-
workers simply aren’t tracking all the
ment in the inventory management realm, where it recently implemented a mul-
transactions that they could be tracking,”
tipronged approach to managing stock for its international DCs. As part of that
Hobkirk says, noting that the cost of effort, the company implemented an inventory optimization solution from Blue
wearable scanners are now in line with Ridge Supply Chain Planning Solutions.
those of handheld devices. “There’s really Brian Cronenwett, vice president of international logistics for the Oak
no reason not to use them anymore.” Brook, Ill.-based hardware retailer, says that initiative was driven by the need
Start thinking about artificial intel- to improve fill rates for its international retailers while also reducing stock-
ligence (AI) and machine learning. ARC’s outs by 40%.
Banker says that he’s beginning to see When shopping around for a solution that would help it meet those objec-
tives, Ace Hardware started by looking at and then dismissing the idea of
AI (computer systems that can perform
using a large, expensive planning tool for the job. “We were already using that
tasks that normally require human intel-
for our domestic DCs,” says Cronenwett, “and knew that it wouldn’t be a cost-
ligence) and machine learning (AI that effective approach.”
gives systems the ability to automatically After exploring several different technology platforms, Ace Hardware’s IT
learn and improve from experience with- team narrowed the choices down to just three. Cronenwett says that after
out being explicitly programmed) applied exploring the costs related to each choice, the company picked Blue Ridge.
to demand management solutions—a “We liked the look and feel of the user interface,” he adds. “It was a very user-
trend that could help improve forecasting friendly tool, as opposed to some of the stare-at-the-blank-screen options that
for select time periods. we looked at.”
As a company that frequently deals with “lumpy” demand that can be dif-
For example, if a warehouse or DC
ficult to predict in advance, Ace Hardware wanted a simple interface that didn’t
operation lacks the necessary level of
rely on “13 different algorithms to get to the answers that we needed,” says
SKUs for every supplier, these advanced Cronenwett. “We wanted a solution with one good algorithm that would allow
options could help make more intel- the analyst to make quick decisions based on what he or she was seeing on
ligent stock allocation decisions. He the [screen].”
points to Terra Technologies, which was Using its new system, the retailer has eliminated about 80% of the time it
acquired by E2Open in 2016 and one once took to create POs for its vendors. And armed with the system-generated
of the early pioneers in such technology. data—plus more time to do their jobs versus just creating POs—the company’s
“In a world where a lot more companies analysts are taking a more proactive approach to inventory management.
“Our new forecasting engine is more robust than anything we were using
are running segmented supply chains,”
previously,” says Cronenwett. “In our lumpy environment, that means we no
says Banker, “when they’re short on
longer have to manually adjust to compensate for those fluctuations.”
something, those companies want the
Finally, Cronenwett says Ace Hardware is on pace to reduce its inventory
stock to go to their best and most profit- levels by 16.5% this year while also reducing stock-outs by 40%. “We’re going
able customers.” • to exceed our original goal,” says Cronenwett. “It’s great when you buy soft-
ware and it actually works.”
—Bridget McCrea is a contributing —Bridget McCrea, contributing editor
editor to Logistics Management

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 19
Warehouse/DC Management

DOM’s Impact
Distributed order
management
(DOM) suppliers
ONCustomer
Experience
and users tout its
ability to strengthen
the customer
experience through
better ties to store-
level systems to
improve buy-online/ E-commerce has made distributed order management (DOM)
pickup-in-store systems—a layer of software that sits above inventory systems and figures
efforts. out how to best fulfill orders—a key part of omni-channel strategies. The
routing logic in DOM quickly assesses which warehouses, stores or third-
party locations should be tapped to fill an order, regardless of channel.
In short, DOM brings efficiency to more attention is being paid to integration
fulfillment. But that’s the internal view of with store solutions, says Zalowitz.
DOM, also known as an order manage- “There are two main questions involved
ment system (OMS). As omni-channel in designing your OMS solution: Do all
retailers seek to make stores more useful my commerce systems ‘speak’ the same
BY ROBERTO MICHEL, for customers who buy online, DOM’s language, interface-wise; and second, is the
EDITOR AT LARGE ability to improve the customer experience business logic interpreted the same?” says
is gaining attention. For options such as Zalowitz. “The better those two questions
buy online/pick up in store (BOPIS) to are answered, the more value retailers will
work effectively, the foundation will likely find in their solution.”
involve an OMS that integrates with store- DOM typically integrates with multiple
level solutions. systems to gain knowledge of inventory,
DOM functionality has centered around logistics and labor issues. DOM integrates
order routing, inventory visibility, order with warehouse management system
modification and ship-from-store features, (WMS) solutions to know what is on hand
says Zach Zalowitz, practice lead for omni- in distribution centers, as well as with store-
channel supply chain at consulting firm level systems including point of sale (POS),
SCApath. While the functions OMS ven- merchandising or other inventory systems.
dors are expanding on varies by industry, “One key area of focus for vendors is

20 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
around store labor and capacity plan- in enterprise resource planning (ERP) in some cases thousands—of potential
ning to enable better order routing systems. ERP order management was points of fulfillment to a network.”
decisions,” says Zalowitz. “The more conceived at a time when supply chains
finely tuned you can be around show- were more linear, with a DC shipping to Stores as DCs?
ing what labor is available for each part stores in its region, and little variation DOM solutions may not be able to turn
of each day, the more it helps man- beyond that, notes Brian Kinsella, vice stores into tightly controlled DC envi-
age order allocations properly. It’s not president for product management for ronments, but they can use integration
enough just to route an order to a store Manhattan Associates’ OMS solution. capabilities, rules and software intel-
because that is the inventory point “The supply network for omni-chan- ligence to reliably figure out how much
closest to the customer—you need the nel has gotten far more complicated,” available goods are in specific stores
people there to service those orders.” says Kinsella. “What’s all the rage now without disappointing either e-com-
Today’s DOM/OMS solutions are is turning stores into fulfillment points, merce or walk-in customers.
different from the order management so now you’ve just added hundreds—or Stores tend to be chaotic environ-

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 21
Warehouse/DC Management: DOM

Modern order management systems

ments for inventory control, provide intelligent order routing from the store’s e-commerce
especially outside the back- site and buy one item in per-
room, where customers are son, the Aptos software can
moving goods, trying them do it in one transaction.
on or purchasing them. As “The way we think about
result, says Zalowitz, as part order management, with every
of an enterprise order man- Order decision we make about how
agement (EOM) project, the software works, we put the
omni-channel retailers may customer in middle of it and
Order Management system
need to consider an inven- then wrap the software around
tory protection strategy. those workflows,” says Rawlins.
Under these strategies, One of Aptos’s custom-
says Zalowitz, an appropri- ers drawn to this blending of
ate stocking level is set for software needed for in-store
each item by department Retail stores Distribution Vendors retailing and online order man-
and store so there is enough agement is TUMI, a luggage
“protected” inventory to Inventory system of records Vendor inventory brand that sells online as well
avoid stock outs in stores, as through its own stores and
Source: Kibo
while also guarding against other retail partners. Earlier
committing to online sale as the data you feed into it,” he says. this year, Aptos announced
of items in a store that could prove dif- DOM vendors may offer merchan- that TUMI, an existing customer for
ficult to locate. Factors such as how dising or POS solutions as well, and Aptos’s software including POS and
deep to set the inventory for an item, its in these cases, they have typically pre- customer relationship management solu-
sales velocity, and how prone an item is integrated the solutions so OMS can tions, selected Aptos Enterprise Order
to loss or “shrinkage,” are typically taken get timely updates. “A DOM system is Management for DOM duties.
into account in inventory protection. opened up pretty deeply with applica- The overall solution is aimed at
“The critical misstep some retailers take tion programming interfaces (APIs) enabling TUMI to integrate physical
is to use ‘blanket’ protection across the because it relies on data from other sys- and online retail channels, and enable
board for all items in the store, which tems to work,” says Ian Rawlins, strategy shoppers who go into stores to have
leads to lost sales,” Zalowitz says. leader at Aptos, a vendor that offers “endless aisle” fulfillment options. Flex-
While most DOM solutions have DOM, POS and other retail solutions. ibility for TUMI’s customer is the goal,
logic to support inventory protection, “By contrast, some point-of-sale sys- says Rob Cooper, general manager for
explains Zalowitz, inventory updates tems, especially the older ones, are like TUMI North America. “Aptos Enter-
from store-level systems present further closed universes. They are a little more prise Order Management will allow us
opportunities for fine-tuning protection difficult to work with, even though we to present our vast product assortment
levels because the OMS knows what is can use our APIs to push and pull data.” to customers in an ‘endless aisle’ format,
on hand. Many retailers have been adopting while ensuring products can be fulfilled
For most retailers, a merchandising new POS solutions the last couple of with the customers’ convenience in
system integrates with a POS to give years, says Rawlins, first to prepare for mind.”
DOM a complete view of inventory. Intra- chip cards, but more recently, to have
day signals from a POS give a DOM a an interoperable POS for omni-chan- DOM’s integration points
more real-time inventory view. Without nel. With Aptos’s suite of solutions, DOM solutions have other key points of
this signal, Zalowitz explains, the protec- he adds, the DOM and POS can work integration besides store-level systems,
tion levels must increase to offset “stale” together to simplify things for the points out Fab Brasca, vice president
inventory knowledge. “The best DOM in customer, so that if a customer at the of solution strategy with JDA, though
the world is only going to be as effective store wants to order a couple of items certainly a view into store inventory and

22 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
store labor is critical for BOPIS. JDA enabling multiple points of integration Inventory protection logic in DOM
is a partner with IBM’s Sterling Com- to handle the complexity,” says Brasca. can help improve the customer experi-
merce for DOM software, combining Because DOM solutions typically ence by ensuring inventory in stores isn’t
IBM’s DOM with JDA’s lineup of supply need to integrate with multiple sys- over-committed to online customers, or
chain management software, including tems, DOM vendors need to provide sold out for in-store shoppers. However,
WMS and some planning software. excellent integration technology, setting up protection rules in DOM can
For example, the says Jennifer Sherman, senior vice be time consuming, so one area of DOM
evolution is in systems that self-adjust to
“The leaders in omni-channel think about the demand and supply patterns, says Man-
customer’s journey first and work backwards hattan’s Kinsella. “We call it Adaptive
from there. They need to think through: what does Network Fulfillment,” he says. “It’s better
the customer need here, and how can I make the if the system can be self-tuning, rather
than having to have users configure 50 or
experience seamless and convenient for them?”
60 different flags.”
–Zach Zalowitz, SCApath DOM solutions also should provide a
means of handling exceptions or unex-
integration can link DOM with JDA’s president of product and strategy for pected changes, such as weather events.
replenishment planning so the true Kibo, a DOM vendor that also offers “The best OMS providers have all made
source of demand can be considered, e-commerce and mobile POS software. investments in better workflow-driven
which can be tricky for omni-channel “You have to have a robust integra- frameworks for exception management,”
retailers. For example, a customer may tion layer—one that ensures that the says Zalowitz. “Additionally, the DOM
walk into the store, where an associate integrations put in place don’t have to providers are investing in available to
orders a product for home delivery ful- change even if the underlying software promise engines and in making store
filled from a DC. does,” says Sherman. fulfillment functions easy to use, espe-
The true point of demand is the Kibo also offers some basic WMS- cially functionality on mobile devices.”
store, so ideally, explains Brasca, DOM level functions, including the ability The overarching interest for both
should link with replenishment plan- to pick, pack and ship as well as some DOM vendors and users, says Zalowitz,
ning to consider such patterns. “In wave planning, as part of its platform. is to strengthen the customer experience,
today’s world, when you think about Sherman calls it a “WMS light” capabil- whether it’s fulfillment for online orders or
replenishment, you need to capture ity that suits some of its users, though in-store workflows. To succeed, concludes
these multiple points of data for a some may choose to integrate Kibo’s Zalowitz, better, integrated software helps,
single transaction to truly understand OMS with a separate WMS. but the real value is in designing processes
where that inventory should be in the that center on customer needs.
future,” says Brasca. Customers at stake “I think where companies tend to miss
DOM’s tie to transportation man- At the store level, points out Sherman, the boat is that they think about processes
agement software also is critical to store associates benefit from mobile apps like pick-up-in-store from a transactional
be able to instantly figure out the that help them service customers who viewpoint,” he says. “Rather, the leaders in
logistics involved in consolidating might want to order online while at the omni-channel think about the customer’s
multiple items for an online order for store. Retailers also should consider eas- journey first and work backwards from
store pickup when those items are in ily overlooked details such as signage for there. They need to think through: what
multiple stores, DCs, or a combina- pickup up of online orders, as part of per- does the customer need here, and how
tion of both. Brasca says this “click and fecting the customer experience. “Where can I make the experience seamless and
collect” capability relies on DOM that we see most omni-channel efforts fail convenient for them?” •
integrates with WMS and store inven- it’s because they did not involve the
tory systems, as well as transportation stores upfront, and think about all things Roberto Michel is editor at
management, to work correctly. “When involved in making their store associates large for Logistics Management
we talk about click and collect, we are successful,” says Sherman.

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 23
Warehouse/DC Management

The Evolving

T
HE FAMILIAR TECH- not every DC needs the same founda-
NOLOGY STACK OF tion, failure to grasp evolving areas could
BY ROBERTO MICHEL, warehouse management end up stacking the deck against omni-
EDITOR AT LARGE
systems (WMS) to man- channel success. What’s more, while
age transactions and automation hardware—including robotic
With the growth of inventory at the distribution center level goods-to-person systems, pick-to-light
e-commerce, the and then hand order requirements down systems and high-end sortation—play a
technology stack for to the automation layer is not as simple role in the tech stack for e-commerce,
distribution centers as it used to be. With the complexities even automation providers say the stack
is expanding. We of e-commerce fulfillment, the need to is software driven.
explore why WES/WCS orchestrate and optimize operations is “The new types of automation hard-
driving the need for advanced execution ware are extremely important, but I think
software is gaining
software in the middle of the stack and it’s a matter of hardware and software as
prominence and share
for more optimization tools. a combined solution that give users the
how operations are
In short, the DC tech stack has advantages and throughput they are after,
expanding their use of
changed. It’s no longer just WMS on especially when you have Amazon push-
data science.
top, warehouse control system (WCS) ing the same-day delivery model, and
software in the middle, and automated everyone is chasing and trying to achieve
materials handling systems at the floor that same panacea,” says Michael Howes,
level. The stack has expanded, and while vice president of software and controls

24 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
DC Tech Stack Caption

for Swisslog Warehouse and Distribution Solu- stack for e-commerce has been the emergence
tions (WDS) Americas, which offers automated of warehouse execution system (WES) soft-
materials handling as well as software solutions. ware, an evolution of WCS. WES brings in
E-commerce means that DCs have a greater richer functionality around order releasing and
volume of small orders that make it more com- wave management, resource optimization and
plex to orchestrate systems, not only within the analytics, in addition to WCS solutions’ more
four walls of the DC, but with order fulfillment traditional role of coordinating automation
and transportation management decisions. and material flow.
“Everyone is being pushed to ship smaller and
faster,” says Joe Vernon, senior manager of The role of WES
North America supply chain technologies for WES solutions provide visibility and manage-
the consulting firm Capgemini. “The demand/ ment capabilities around order requirements,
fulfill cycle has been cut from days to hours, inventory information, and equipment and labor
and freight costs are more often absorbed now, resources, observes Mike Dunn, group vice
rather than passed along to a customer.” president with Fortna, a distribution consulting
Vernon sees distributed order management and engineering firm. “The interesting technol-
(DOM) solutions, as well as new types of optimi- ogy questions inside the DC are: ‘What systems
zation software that can synchronize pick sequenc- should I own to have visibility into those three
ing, staging and loading, as gaining in importance. components,’ and then, ‘What software can I use
Perhaps the biggest shift in the DC tech to really optimize my processes?’” Dunn says.

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 25
Warehouse/DC Management: WMS

Evolving DC tech stack

Distributed order SCM
management (DOM) • Supply, demand and inventory planning tools

ERP
• Orders/procurement/financials/inventory

Transportation Yard management

management systems (TMS) systems (YMS)

Warehouse management systems (WMS)

• Inventory management • Order releasing/wave management
• Receiving • Labor management
• Putaway • Pack/ship functions
• Replenishment • Voice pick/scanner integration
Data Mobile
industrial IoT
science
Warehouse execution systems (WES)/ computers platforms/
and
Warehouse control systems (WCS) and devices solutions
analytics
may include:
• Order releasing and wave management
• Inventory/replenishment management
• Labor management
• Pick-to-light, voice picking, scanner integration
• Pack/ship
• Material flow control
• Machine control integration

Automation
Inventory aware automation
• Sorters • PLCs
• Shuttle systems
• Conveyors • Motion control
• Goods-to-person robotics
• Scales • Sensors
• AS/RS
• Cameras • Field devices

Source: Modern Materials Handling

WES tends to be at the center of things in of work that are large enough to drive productivity,
today’s tech stack, says Dunn, because with but small enough to react to and satisfy customer
its WCS roots, it has real-time knowledge of demands,” says Dunn. “And the optimal size for
equipment processes; it knows labor availabil- work may change every hour. In the morning, you
ity details; and it can take the order require- may be able to process a larger chunk of work effi-
ments from the enterprise level to manage ciently while still meeting demand, but later in the
the order pool and decide what should be day, you may need to use much smaller chunks of
processed next by the DC’s resources. While work, which are suboptimal from a productivity
some WMS systems are getting better at standpoint, but are necessary to meet demand.”
grouping orders into smaller waves for pro- While WES has gained in importance, it
cessing, most WMS systems tend to batch can’t do everything, says Dunn. Omni-channel
work into large static waves, says Dunn, companies have often turned to DOM to man-
whereas WES excels at releasing chunks age where orders should be fulfilled from, and at
of work to the floor in the right size and many companies, a WMS handles overall inven-
sequence to satisfy orders while squeezing tory, says Dunn. Down at the automation level,
maximum efficiency from resources. he adds, DCs often have strong interest in tech-
“When we think about how to really optimize nology such as goods-to-person systems or pick-
inside of a warehouse, it’s about creating chunks to-light systems that minimize or simplify the

26 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
labor requirements for order picking. But Dunn Broader needs
sees WES as the best solution for the order While some omni-channel retailers are leverag-
releasing and resource management decisions ing WES solutions, there remains a big chunk
that need to be made around order priorities. of the market with simpler tech stack needs,
“We believe the best solve for many of these observes John Sidell, principal with supply chain
business problems is going to be a combination consulting firm New Course. For many con-
of WCS and WMS capabilities,” Dunn says. sumer goods manufacturers or other companies
“There are consumer
“Finding a way to have those two types of sys- that aren’t at the bleeding edge of omni-channel,
goods companies
tems work well together to release and process but do have growing e-commerce needs and
work is going to be the optimal solution.” more pressure from small rush orders, the key
and others who
No one wants chaotic, inefficient peaks and concern is identifying when e-commerce vol- are asking, ‘where
lulls in the pace of work, so WES providers often umes force a change to the tech stack, explains is my tipping
focus on enabling a demand-driven, level pull of Sidell. point—in terms of
work through a DC and its various points of auto- “There are consumer goods companies and e-commerce volume
mation. So it’s not just software bells and whistles others who are asking, ‘where is my tipping and complexity—
to consider with WES, but the approach used to point—in terms of e-commerce volume and when I either bring
achieve flow, explains Walter High, vice president complexity—when I either bring in a third-party
in a third-party
of marketing with Invata Intralogistics, a WES logistics partner or create a new operation dedi-
logistics partner
provider and consulting firm. cated to e-commerce?’” says Sidell. “Where they
“In building out system infrastructure, we are with that tipping point greatly influences
or create a new
take a whole system approach to optimizing what they need in a technology stack.” operation dedicated
process flows that embraces lean engineer- For some companies who have relatively to e-commerce?’”
ing techniques in the physical layout of our modest e-commerce pressures, the tech stack —John Sidell,
systems, the intelligence of our software, and will tend to be more streamlined compared principal, New Course
the application of advanced technology that to what an omni-channel retailer would put
maximizes the efficiency of human interaction, in place at a DC, says Sidell. A WMS with
while eliminating toilsome labor requirements,” a more agile approach to wave management,
says High. “In doing so, we eliminate as much some zone picking, or perhaps a voice-picking
manual and planned push-based processing as solution combined with WMS might be key
possible, and replace it with pull-based, self- pieces of a tech stack for many organizations.
regulating and self-maintaining systems.” “For some companies, the current tech stack
Projects around orchestrating flow also ben- can be adapted to support new methods of
efit from a data science approach in which data order picking,” says Sidell. “If they can tap
analysis, modeling and simulation are used additional functionality from their WMS ven-
to determine how to best configure the DC’s dor, turn that on and train the users, that may
technology stack, adds High. “Using data sci- meet their needs. That said, as your online
ence, we are able to look an existing operation business grows, the need for more automation
and test options to determine their affect on grows with it.”
that operation,” he says. “So while the technol- The growth of e-commerce also has elevated
ogy stack can dramatically affect a company’s the importance of DOM and the inventory vis-
strategic advantages in the market, changing it ibility DOM relies on, says Sidell. Well-imple-
out when productivity languishes is not always mented, accurate WMS systems support this
the right answer. The answer is derived through visibility, says Sidell, as do accurate store-level
understanding a customer’s data, business systems. “One of the most crucial elements with
requirements and growth expectations, and sci- omni-channel is real-time inventory visibility
entifically modeling that information in a way across your supply chain network,” says Sidell.
that delivers direction.” “To have effective DOM and fill orders with

logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 27
 Warehouse/DC Management: WMS

confidence in the promised service level, this mobile computers, and voice-system com-
inventory visibility is a must.” ponents that enable workers and processes.
The solution stack for DCs increasingly needs Much of the value from this hardware comes
to look beyond the four walls of a single site to from the ability to consolidate data generated
“The future
optimally process and ship orders, says Cap- on the edge and make real-time decisions with
is to make gemini’s Vernon. Some sites might have multiple it, says Bruce Stubbs, director of supply chain
this whole buildings within a “campus,” notes Vernon, which marketing for Honeywell Safety and Produc-
ecosystem adds to the complexities of the DC-level inventory tivity Solutions.
smart, moves, processing and staging. The whole process One enabler of these actionable insights is
optimized and constitutes a “multi-tiered, multi-constraint optimi- Cloud-based gathering of data generated by sen-
predictive.” zation puzzle,” says Vernon, to get the right goods sors in trucks or other supply chain locations, says
to the right dock doors at the optimal time for Stubbs. Honeywell has already leveraged its Cloud
—Joe Vernon, senior
pickup by carriers. platform capability gained from its acquisition of
manager of North
America supply chain To solve this challenge, says Vernon, DCs are Movilizer to do things like generate Cloud-based
technologies, adopting solutions for pick sequencing, staging insights into “cold chain” events in sectors such as
Capgemini and loading optimization with integration to robot- food and pharmaceuticals, according to Stubbs.
ics and automation. Vendors in the space such as Another tech stack evolution Honeywell
warehouse optimization can help DCs schedule is involved with is performance analytics of
complex activities in a synchronous way to achieve data generated by voice systems. Whereas
flow and better use labor, according to Vernon. once the software component of voice systems
Capgemini is involved with pick sequencing, was mainly about generating effective voice
staging and loading optimization by offering data prompts and integration to WMS, now
science services that assess actual performance there also is analysis software that combs
in shipping orders against the model in the data generated by voice-based processes to
software, so that the model can be improved for improve performance.
further efficiencies. To this end, says Stubbs, Honeywell offers
Providers of robotic goods-to-person systems an operational intelligence software for its
and other warehouse automation systems also voice system that provides actionable insights
employ data science to refine the effectiveness for associates on the floor, such as slot skipping
of their solutions, says Vernon. The data sci- that degrades efficiency, while also generating
ence for pick sequencing and loading will build reports for managers on issues like how actual,
on data science from the automated equipment current performance compares against produc-
providers, rather than replicate it, he adds. tivity standards, or to budget targets.
Expect to see more data science from solu- According to Stubbs, such software is an
tion providers and consultants, says Vernon, increasing part of the value proposition today.
since some DCs are becoming highly auto- “We’ve transformed from a hardware-oriented
mated and generate a constant data stream that company to a total solutions provider, and
can be analyzed to refine optimization engines. that involves a lot this software on the edge
“The future is to make this whole ecosystem to enable connected workers,” says Stubbs.
smart, optimized and predictive,” says Vernon. “We’ve enhanced our [operational intelligence]
platform to be able look at all the task-related
On the edge data that exists and leverage it in a real-time,
Another aspect of the tech stack for omni-chan- actionable way to improve work processes and
nel is various “edge” hardware such as sensors, head off problems before they start.” •

28 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
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LABOR
MANAGEMENT
SYSTEMS
GET “SMART”
Labor management systems have started
to expand beyond engineered standards
by integrating machine learning and other
capabilities that further enhance their position in
the supply chain software stable.

A
s labor continues to hold its spot as one of the
most expensive aspects of running a logistics and
supply chain operation, the current labor crunch is
making a costly endeavor even more difficult.
Currently, labor accounts for about 20% of a company’s supply
chain expenses, according to a recent report issued by real estate ser-
vices giant CBRE Group, and the average wage for a warehouse or DC
worker was $11.82 an hour in 2016. Combine labor’s high cost and
high need with the smaller pool of candidates to work with, or to pull
from when business spikes, and it’s easy to see why labor is turning
into a royal pain for many.
In response, many operations are turning to automated solutions—
notably robotics—to drive throughput with a static number of workers.
Others are implementing labor management systems (LMS), a blend of
software and engineered standards that capture worker activity data to
help define the most effective way to perform specific tasks.
“The use of LMS is heating up,” says Dwight Klappich, research
vice president at Gartner. “Where, in the past, a company needed
200+ employees or ‘users’ to justify the time, effort and cost of buying
LMS, these systems are now capturing information [e.g., every time an
employee ‘does something’] and applying that logic in new ways. That’s

BY BRIDGET McCREA, EDITOR AT LARGE

30 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
logisticsmgmt.com S U P P LY C H A I N S O F T W A R E 31
Labor Management

“Where, in the past, making LMS more applicable for a afford to have two industrial engineers on staff, armed
wider range of users.” with stopwatches and clipboards. “They would walk about
a company needed
Pointing to Easy Metrics as watching how people did stuff and conducting time stud-
200+ employees an example, Klappich says this ies,” he explains. “Then, that manifests itself into standards
to justify the time, new entrant on Gartner’s “Cool that they use to compare to actual performance.” He says
effort and cost Vendors in Supply Chain Execu- Manhattan is one vendor that’s putting a bigger focus on
of buying LMS, tion Technology” list is applying using throughput versus just trying to align with engi-
machine learning-like tech- neered standards.
these systems
niques in the labor environment. “Going forward, I think we’ll see some very interest-
are now capturing Machine learning, he adds, is a ing things that will allow labor to move down further into
information and type of artificial intelligence that smaller organizations that want to enhance efficiencies, but
applying that logic provides computers with the abil- that can’t afford industrial engineers,” says Klappich.
in new ways. That’s ity to learn without being explic-
making LMS more itly programmed. Turn a microscope into a telescope
Why is this so cool? Accord- Comparing warehouse labor to a science project, Klap-
applicable for a
ing to Klappich, the vendor is pich says that, historically, the industry has viewed ware-
wider range of “expanding the market potential housing through a microscope, like viewing an amoeba
users.” for warehouse workforce manage- on a slide. This viewpoint provided answers to questions
—Dwight Klappich, Gartner ment (WWFM) solutions (aka, like, “How did we do yesterday?” “How many orders did
LMS).” “It offers an application we pick?” and “How did we do today versus yesterday?”
platform and delivery approach that exploits the real- “It’s always looking backwards,” says Klappich. “What we
time data generated by warehouse management sys- need to do is flip the conversation, turn that microscope into
tems,” he says, “to replace industrial engineers that his- a telescope, and really starting looking out in time.”
torically used stopwatches and clipboards to calculate For example, a manager could be looking at the day’s
goal times and planned work effort.” agenda at 7 a.m. and say, “Hey, this is the work I need to
do today, so I need more people in receiving in the morn-
Blurred lines ing and more people in packing in the afternoon.” And, if
Used primarily within the warehouse’s four walls, LMS the right amount of human resources isn’t available during
uses metrics to track productivity for individual employ- those times, the manager can also determine whether that
ees or for groups of workers and is generally integrated will put any orders at risk, or not.
with existing warehouse management systems (WMS) “This is where LMS is getting pretty exciting,” says
and other enterprise systems. Klappich, “by enabling companies to go beyond just com-
At its simplest, the applications help operations iden- paring yesterday’s performance to a specific standard and
tify labor expenditures, optimize workforce productivity, allowing shippers to use the data to figure out how to run
and compare activity against established labor standards their businesses going forward.”
and their own internal, historical data. As Klappich men-
tioned, LMS is now stretching outside of its traditional Wanted: Next-gen LMS
boundaries by capturing worker and standards data, As he looks around at the logistics industry, Joe Vernon,
ferreting out valuable insights from that data, and then senior manager of supply chain technology for consulting
using it to help make smarter labor decisions. firm Capgemini, says a growing number of shippers are
“I think this is a step in the right direction,” says Klap- asking for next-generation LMS. That, he says, is driving a
pich. “What it will do is allow companies of all sizes—not slight increase in adoption rates for the software.
just 2,000-employee grocery companies—to operate more “Logistics professionals want predictive and prescrip-
efficiently, and without the traditional issues associated tive solutions that not only show them how their labor is
with labor management.” working, but that can also put the whole picture together
Historically, Klappich says only large shippers could and optimize workflows,” says Vernon. As shippers wait

32 S U P P LY C H A I N S O F T W A R E logisticsmgmt.com
 for the “next leap” in LMS to come into Calling LMS “a reporting tool for
full focus, he says he’s already envisioning Companies workforce performance,” Vernon says the
a time when warehouse managers can use mentioned in next generation of the software is going to
the software to track equipment and fork- this article have to be wired, aware and responsive.
lift usage in the warehouse or DC. “It’s really going to jump forward,” he pre-
“When you’re running a full shift, equip- • Capgemini dicts. And for operations that are either
ment and assets need to be measured and • Gartner considering an LMS implementation or
optimized [i.e., rates of speed, congestion • St. Onge an upgrade to an existing system, he says:
on the warehouse floor] using technology “Don’t be afraid to get started.”
like geo-positioning,” says Vernon, noting that the com- “Sometimes, when working with customers, we
bined effort of “people and machines” that creates through- advise them to wait a year until they really get to under-
put efficiency should be viewed as a single, cohesive, pro- stand their operations,” says Vernon. “But because LMS
ductivity ecosystem. “Particularly as we move forward with can start pushing out valuable data immediately—
robotics, labor management should play a part in that.” something it really couldn’t do a few years ago—we’ve
In looking around at what vendors are doing to make that changed our perspective on that. And even if an opera-
happen, Vernon points to Radial, an omni-channel tech and tion doesn’t have standards in place right now, it can
operations provider, as one company that’s “on the leading still look for patterns and find useful data to start work-
edge” of introducing science into labor management. ing with.”
“LMS is no longer a reporting tool for workforce perfor-
mance,” Radial’s executive vice president Sean McCartney The warehouse-retail connection
recently told Vernon. “It has to be a wired, aware, intel- Going forward, Klappich expects to see software devel-
ligent, responsive, predictive and prescriptive solution, and it opers like JDA continuing to leverage retail labor (i.e.,
will be used to dynamically inform WMS and other systems the planning of people in stores) in the warehousing
to make adjustments to things like wave planning, sorter environment, which has traditionally been focused on
speeds and load plans.” scheduling and planning versus comparative analysis
And this, adds Vernon, represents a true “blurring of the (i.e., “We have a problem with our pickers who aren’t
lines” between WMS, LMS and warehouse execution sys- meeting their plans”). Now, the same companies are
tems (WES). “It not only addresses labor utilization,” he says, using software to handle load planning and warehouse
“but also flow, optimization and employee engagement.” scheduling.
“Where warehousing was more about the compara-
Wired, aware, and responsive tive analysis, and then giving that information to ware-
With more warehouses and DCs assuming responsibil- house supervisors to infer from that data the decisions
ity for a higher volume of orders that were once han- that they needed to make,” says Klappich, “JDA, Man-
dled by their companies’ retail components—namely hattan and others are taking what they’ve done for the
due to the huge uptick in e-commerce sales—the need Walmarts of the world and applying it in the warehouse,
for good labor management has become a focal point and in a way that becomes more useful and actionable
for many logistics operations. for supervisors.”
“There’s a continuous need to manage and balance Manhattan’s DM Mobile, for example, combines
the labor force properly, particularly between retail data and functionality from the WMS and LMS to help
fulfillment and e-commerce fulfillment,” says Norm distribution managers systematically record active inter-
Saenz, managing director at supply chain consultancy actions with employees, including observations and per-
St. Onge Co. “Proper staffing and load planning are formance measurements, review work in the warehouse
both important, and LMS can help with both.” As the by wave, job function and task/activity, and other tasks.
complexity of operations continues to grow, Saenz sees “This allows managers to get out on the floor very
LMS playing an even more important role in balancing proactively,” says Klappich, “and fix issues before work-
and managing labor across multiple channels. ers get too frustrated.” •

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