Silo-busting in supply chain execution

For all the talk about using logistics as a means of competitive advantage, the systems that companies rely on for supply chain execution are often only loosely integrated. As a result, disciplines such as transportation planning and warehouse management often still get done in serial fashion and without knowledge of how constraints in one domain will impact the other.

This disconnect between systems for supply chain execution is beginning to change, however, as providers of supply chain execution software such as warehouse management systems (WMS), transportation management systems (TMS), and route planning and scheduling solutions look at ways to break down silos between systems. With pressures like item-level order fulfillment growing as part of the omni-channel trend, the shift to supply chain execution (SCE) in which different disciplines work in a more concurrent, connected fashion is seen as a must.

“I believe there is no question that WMS and TMS should be tightly integrated,” says John Reichert, senior director of SCE solutions for TECSYS. “There should not be a line between the two areas. Ideally, you want them to blend together.”

With select transportation functions blended into WMS, explains Reichert, it’s possible to do things like have WMS users generate and work with carrier compliant labels from within the WMS. A supplier with an integrated solution can also do things like pass route schedules up to a WMS so that the system’s wave management logic can take into account the way goods should be staged and loaded for delivery route stops, while still keeping picking efficient. “The best answer sometimes comes from letting WMS and TMS applications work together to optimize a combined process,” says Reichert.

The market is headed toward integrated platforms for execution functions, believes Dwight Klappich, a research vice president with analyst firm Gartner, even though overall, most suppliers still have a considerable way to go before applications work tightly together at a process level. What’s more, end-user organizations are putting more focus on the overall order fulfillment process.

For example, says Klappich, transportation plans used to be devised at a corporate level by a few planners and then handed down to the distribution center level for execution. But today, vice presidents of supply chain are much more apt to urge planners to think about constraints at the DC level, and conversely, for managers in the DC to think about transportation priorities. “Companies are starting to view logistics more holistically instead of thinking in silos,” says Klappich.

Will Salter, CEO and president of Paragon Software Systems, a provider of route planning and scheduling software, has witnessed a shift in the use of his company’s software. Route scheduling was once practiced by a few planners on PCs, but today, these solutions can be deployed centrally on servers and can easily push metrics on delivery performance to managers in customer service or DC operations. “The systems we have today generate information that permeates the whole organization, not just those few in the transportation office,” Salter says.

So what will better integration do for DC operations? The practical benefits include quicker pick, pack and ship processes; streamlined carrier compliant labeling; as well as better alerting around events like dock availability and truck arrivals/departures to avoid delays or added costs.

Basic data flows
There is no great mystery to the data flows between TMS and WMS. In many companies, though not all, orders come in through an order management or enterprise resource planning (ERP) system and are sent to a TMS for load planning and carrier selection, and then the planned loads are sent to WMS for execution. After trucks are loaded, the WMS reports back to the TMS the details on what was loaded.

Further integration points beyond this basic data flow vary depending on the industry involved and the level of sophistication of the WMS and TMS solutions, says Stacy Kannawin, vice president of transportation for 4SIGHT Supply Chain Group, a consultancy that helps companies with supply chain integration. In some industries, such as automotive or suppliers making frequent deliveries to a lean or just-in-time manufacturer, integration may need to be more involved. “The tighter the lead times are in a supply chain, the tighter the integration needs to be,” says Kannawin.

Alerts or status updates might need to be passed between the WMS and TMS around events like dock appointment schedules, carrier delays, stop sequences for deliveries, gate in/out status in yards, or times for when trucks arrived or pulled out of dock doors, says Kannawin. Carrier dispatch offices traditionally have provided some of this information manually, but she adds, “What tends to work best is that the carrier reports information through dispatch, but then there is verification through system processes.”

Cloud-based WMS vendor LogFire recently partnered with Oracle to integrate its WMS with Oracle’s cloud-based TMS for users wanting a combined cloud solution for execution. The key integration points for that partnership are inventory items, sales order lines and customer data, according to Joe Clay, a solutions director with Inspirage, a consulting firm that led the integration work using its Rapid Start for Oracle transportation management cloud process.

The partners are in the process of fleshing out industry-specific integration scenarios, adds Clay, but the key points of integration are finalized and available to users. “Sales order plans are built and Oracle routes those plans as trips, and then those trips can be passed back into LogFire for picking,” he says. “Upon ship confirmation, data is logged back into Oracle transportation so that customers can see actual shipment locations and costs.”

SCE software suppliers such as Manhattan Associates, JDA, HighJump, and TECSYS offer suites that span WMS, TMS and other execution functions. Yard management solutions from major suppliers can also act as a bridge between warehousing and transportation processes. However, Klappich notes, not all of the major best-of-breed execution vendors have evolved their respective product suites into a highly cohesive platform.

The more advanced levels of supply chain execution integration, or what Gartner calls “supply chain execution convergence,” will synchronize and then optimize processes between domains, says Klappich. This level of platform integration requires not only a common data model for details like items, customers or locations, but also a layer of software logic that balances constraints and resources for each execution function. For example, if TMS wants to combine three customer orders onto one load, but one of the orders will take much longer to prepare because it requires more value-added services, the TMS needs to know this warehouse-level constraint. “It’s about being able to simultaneously consider resources and constraints in both WMS and TMS,” says Klappich.

Where it counts
For many warehouse operations, the biggest benefit of tighter integration to TMS is in smoothing out and eliminating steps in the final pick, pack and ship processes, says Reichert. With TECSYS’s WMS solution, certain TMS functions are available from within WMS so users can do things like generate carrier-compliant shipping labels in picking areas and pick straight to the final shipping package. Some TECSYS users even generate a combination label that has the carton label in one area and the carrier label in another, thus streamlining the process.

However, adds Reichert, to support integrated labeling, the WMS should be able do things like be able to void a transaction in the event that a short pick occurs and the label needs to be redone. “The ability of the WMS to automatically detect exceptions like a short pick and automatically void and recreate a transaction without having to touch the TMS directly becomes important,” says Reichert. “Our solutions interact dynamically so that any exception in WMS that requires a TMS action just gets handled in the background as communication.”

Additionally, Reichert says, with more DCs using “on-demand” packaging systems that customize boxes for shipping, integrated WMS and TMS allows data about the boxes being constructed to be accessible to both systems.

Integration also makes it possible for a WMS to “learn” from data collected in TMS functions such as delivery management, says Reichert. TECSYS’ integrated functionality, he says, can take customer feedback information collected in TMS-level delivery management, such as missing or damaged items noted by customers, analyze if there is a likely cause in the warehouse, and highlight any recommended WMS-level procedures that could help avoid the same problem on future orders. The system might even give pickers or packers a visual cue on how to identify certain items, or how to pack them more safely. “If you don’t have tight integration all the way back to WMS, you lose that opportunity to present useful information back to the pickers,” Reichert says.

Broader SCE links
Not only do vendors see TMS working in close concert with WMS, there are other silos that providers are trying to break down. One of these is on the demand side (see box, p. 34), where greater complexity around e-commerce complicates demand planning and the preparation of warehouses to effectively fulfill expected demand.

Another area where vendors are seeking to break down silos is between route scheduling and real-time fleet monitoring. Salter says Paragon’s Fleet Controller module does this by linking with vehicle tracking and telematics systems, and comparing the actual progress of vehicles and delivery performance with planned routes, giving users a way to monitor and react to each day’s delivery performance as it unfolds. With a combination of Fleet Controller and Paragon’s route scheduling solution, users are able to do things like see exactly how close drivers are at hitting delivery windows, measure the dwell time at each stop, or know whether drivers deviated from planned routes.

This blending of what was planned with real-time delivery progress can help improve routing and scheduling, says Salter. “You can analyze the different things that have happened on routes that don’t go right and feed that information back into the [route planning] system,” Salter says. “So the system is always learning from what unfolds each day. It’s like a self-calibration.”

This new world of integrated solutions that break down domain silos may sound encouraging, but as Klappich warns, while certain vendors are ahead of others with supply chain execution convergence, many solutions in place lack the more advanced levels of integration. “It’s still a work in progress in terms of integrating the process flows between these applications so it’s seamless,” he says.

Companies mentioned in this article
• 4SIGHT Supply Chain Group
• Gartner
• Inspirage
• Intrigo
• Paragon Software Systems
• TECSYS