When event management systems first came on the scene earlier this decade, software vendors billed it as the next "killer application." Often referred to simply as "EMS," the stand-alone products were designed to alert users via e-mail or fax messages when specified supply chain events occurred. Every shipper would want to buy an EMS, software vendors thought, because the programs would provide visibility from the time an order was taken to the time it arrived at the customer's door.

The future looked so bright for EMS, in fact, that in 2003, when ARC Advisory Group last completed a study of supply chain event management (SCEM) software, the Dedham, Mass.-based research firm forecast a 50 percent-plus annual increase in sales. With companies like Descartes Systems and Yantra (acquired by Sterling Commerce earlier this year) leading the charge, SCEM sales were projected to reach $1.4 billion by 2006, recalls Steve Banker, ARC's service director of supply chain management.

For its 2003 study, ARC looked only at the logistics visibility and control aspects of SCEM, with a focus on inbound, outbound, and reverse logistics activities—segments that comprised a $200 million market that had grown at a 29 percent cumulative rate since 2000, Banker says.

SCEM software continues to enjoy brisk sales growth, but not as a stand-alone application. Those early dreams were folded into a larger one when software vendors realized that EMS did not have the "legs" to stand on its own. Today, a number of software vendors have integrated EMS into applications such as warehouse management (WMS), transportation management (TMS), and global trade management (GTM) systems.

"EMS wasn't a market in and of itself, so most of the functionality that was created early on has since been sucked up into broader applications that can actually provide business-process logic and business functionality," confirms Jeff Woods, research vice president at Gartner Inc., in Stamford, Conn.

Because EMS depends in large part on data gathered through WMS, TMS, and GTM applications, it makes sense that software vendors have woven event management features into such offerings.

EMS products require users to specify what kind of information they want to receive and to set acceptable time parameters for various events in the order-to-delivery process. These events include normally occurring activities, such as shipment pickups and deliveries, as well as unusual or potentially problematic events. Shippers can specify, for example, that if an order arrives by a certain time, the product must ship from the warehouse and arrive at the customer's premises within a certain timeframe. "If those events don't happen within the right timeframe, the shipper is notified by e-mail, fax, text message, or pager," explains John Pulling, chief operating officer of Provia, a WMS provider in Grand Rapids, Mich.

The ability to track a specific shipment in real time makes EMS particularly useful for crisis management—and crisis prevention. The software also is helpful for logistics managers who must manage international container movements, says Mark Johnson, vice president of marketing at G-Log in Shelton, Conn. It's extremely important for some companies to know when a specific shipment will arrive from Taiwan, for example, but it's not easy to get that information in a timely way through the traditional means of written or verbal communication. With EMS, Johnson says, shippers can get a handle on where a specific international shipment really is.

What makes that possible is the systems' ability to reveal order status, actual production and shipping dates, container loading dates, and transportation details. Such proactive notifications allow shippers to make adjustments as needed. A retailer who finds out that a container will be held in Long Beach four days longer than originally anticipated, for instance, could direct other merchandise to a store to keep the shelves full.

A real-life example of a proactive EMS notification is the following estimated time of arrival (ETA) notice sent by motor carrier A. Duie Pyle at the request of one of its customers. This particular notice, says Peter Latta, president of the West Chester, Pa.-based company, concerned a shipment that was picked up in Massachusetts for next-day delivery to Maryland. What the shipper received is shown in the box on the next page.

Shippers aren't using EMS systems just to track shipments, says Phil Obal, president of Tulsa, Okla.-based consultants Industrial Data and Information Inc. They're also using it to develop key performance indicators (KPIs) and create non-compliance reports for carriers, service providers, and suppliers. Some shippers, for example, use EMS to identify shipments that were delivered late. Others track vendor performance by using EMS to examine the accuracy of quantities shipped.

Shippers that are looking to add EMS to their technology arsenals should first determine what kinds of events need to be tracked and what specific results, or return on investment (ROI), they want to achieve, G-Log's Johnson suggests. He advises users to understand which features and functions will fulfill those needs and to spell out their requirements to the vendor up front. "Make sure you're focusing on what is going to deliver the ROI," he says. Continued...

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