Subscribe to our free, weekly email newsletter!


Viewpoint: The great convergence

By Michael Levans, Group Editorial Director
May 01, 2014

The terms “convergence” and “collaboration” have been popping up recently in discussions about improving logistics and supply chain management processes and the collection and synchronization of the data that can foster those improvements. In fact, the two terms form the foundation of LM’s 2014 Technology Roundtable, our annual feature and subsequent webcast (May 29).

When we discuss collaboration in terms of end-to-end logistics and supply chain processes, we refer to basics such as real-time contact with carriers, sharing long-term plans with our 3PLs, clearly communicating data through our own organizations, and improving freight visibility and inventory management through collaborative planning with our suppliers—but that just scratches the surface.

Putting these practices in place can reduce transportation rates and improve service and communication for all supply chain stakeholders. However, our 2014 panel says that the majority of logistics and supply chain operations are simply not built to truly collaborate and achieve these benefits.

In fact, a recent Gartner survey found that the inability to synchronize end-to-end business processes was named as the second biggest obstacle to reaching supply chain goals. As Gartner’s Dwight Klappich shares in this year’s roundtable (page 24), to get there, supply chain organizations need to do a better job of orchestrating and synchronizing the data and activities across warehousing, transportation, and manufacturing functions—a concept he calls “supply chain execution convergence.”

“Look at the way most supply chain organizations were traditionally organized:  They were broken down into functional silos like planning, sourcing, manufacturing, warehousing, and transportation—and at best they were loosely connected,” says Klappich. “Companies pass data back and forth between applications, but coordinating end-to-end processes across application silos remains elusive.”

To remedy that, Klappich sees the market evolving toward platforms that optimize end-to-end processes, and this will happen over time in phases that include rolling up data into a common analytical system, achieving tighter integration between supply chain applications, and achieving bi-directional communication between systems that will synchronize activities.

Capgemini’s Belinda Griffin takes that concept one step further. She uses the term “supply chain collaboration” for the next step in the technological evolution.

“Supply chain collaboration is a broader concept that includes not only supply chain execution, but also encompasses forward looking planning and forecasting activities,” says Griffin. For example, supply chain execution convergence brings shippers, 3PLs, and other partners together at the time of shipment to promote shipping efficiencies. “Supply chain collaboration is about going beyond this and allowing providers to see what capacity is going to be demanded of them during a key future shipping window so that they can develop mitigation strategies for inadequate capacity,” she says.

Chances are high that you have a full range of supply chain software and enabling hardware at your fingertips, yet you’re still facing significant execution issues. So, while the concepts our analysts share this month may seem more theoretical than practical, its time to give some thought to how you define collaboration and convergence in your operations.

About the Author

image
Michael Levans
Group Editorial Director

Michael Levans is Group Editorial Director of Peerless Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at .(JavaScript must be enabled to view this email address)


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Following the lead of its Congressional Colleagues in the House of Representatives, the United States Senate yesterday approved a measure geared to keep federal surface transportation funding intact through the end of December with a nearly $11 billion stopgap fix.

XPO Logistics announced second quarter earnings and the acquisition of two companies, New Breed Logistics, a non asset-based 3PL focusing in contract logistics services, for roughly $615 million, and Atlantic Central Logistics, a 3PL provider of last-mile logistics services, for roughly $36.5 million.

The report, entitled “Outlook for the Domestic Transport and Logistics Market in 2H14 and Beyond,” takes the view that strong freight levels in the second quarter have left trucking companies in a good position: one in which they need to come up with new plans to handle rising demand. But even with that positive momentum afloat, the report observes that there are some familiar challenges intact, such as a lack of qualified drivers and the regulatory drag from the new hours-of-service rules that took effect in July 2013.

Flags of Convenience are a fact of life in the commercial maritime trade, but several European political action groups are worried that they will pose a threat to the Continent’s air cargo industry.

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA