This Week in Logistics News (March 23-27, 2015)

By Adrian Gonzalez

Desperate times call for desperate measures. With my son’s travel baseball team scheduled to begin its season next weekend, the coaches are employing some field maintenance tools you don’t normally see at a baseball field:

For all of you who play baseball in California, Texas, and Florida, you have it so easy my friends.

Now, on to this week’s supply chain and logistics news…

Another week, another acquisition in the 3PL industry. This week it was Penske Logistics announcing that it is acquiring Transfreight North America from Mitsui & Co., Ltd. for an undisclosed amount. I have to admit, I don’t know much about Transfrieght, and the company’s website hasn’t been updated in almost three years (the most recent press release listed under “What’s New” is from July 2012). Nonetheless, here’s some info from the website about the company:

[Transfrieght] is a Third Party Logistics (3PL) provider and Lead Logistics Provider (LLP) who specializes in customized network optimization solutions based on lean principles and industry best practices…[The company] was incorporated as a joint venture in 1988 to support Toyota Motor Manufacturing Canada. Since then, it has grown in both service offerings and geographic presence and reach.

Transfreight offers customized logistics solutions that include network optimization / rationalization solutions. Within that framework, we provide specialized, transportation and transportation management, crossdocking, packaging design and management, and lean consulting services

What do Transfreight customers have in common? Although they represent a range of manufacturing industry segments, the common thread is their dedication to quality manufacturing through lean principles and techniques. All seek to extend their manufacturing line back to their suppliers.

Transfrieght’s focus on manufacturing and lean principles, and its presence in the automotive industry, align very well with Penske’s focus, strengths, and culture. I haven’t spoken to anyone at Penske yet, but it appears to me that this was an opportunistic deal for Penske to acquire clients in its core verticals, and to strengthen its team of lean experts.

Moving on to technology news, I frequently point to enVista (a Talking Logistics sponsor) as an example of how the business models of technology, consulting, and managed services are converging together. enVista’s announcement this week underscores this trend, with the company releasing the latest version of its proprietary software, Model DC™. According to the press release:

The latest version of Model DC allows enVista associates to more efficiently model DCs and better understand order profiles, the velocity of product movement, and on hand inventory, enabling enVista’s team to define optimal picking and storage equipment. Model DC features 75 different charts and graphs that can be used in the modeling process. The new release also allows data to be modeled in hours instead of days or weeks.

In other technology news, Infor announced the availability of Infor Supply Chain Execution (SCE) in the cloud, which combines Warehouse management, Labor management, 3PL Billing and Transportation execution in a single, unified solution. The press release makes the standard claims about the benefits of cloud deployment (emphasis mine):

The Infor SCE cloud option provides customers with a quick, easy and reliable deployment. The highly scalable cloud environment is easy to maintain and provides strong functionality, robust security and greater flexibility, which allows for an open-ended approach for expanding the IT footprint. Without the need for dedicated IT resources, the cloud deployment requires a smaller capital investment that can help customers achieve a faster return on investment.

But as I wrote last month in The Cloud Opportunity Many Are Overlooking, the big cloud opportunity is less about the software and how it’s paid for and more about the network — that is, the community of companies linked together on a common platform, much like people are on Facebook and LinkedIn, and the business intelligence and analytics possible with all the data flowing through the network. Unfortunately, many software vendors and users still have a short-sighted perspective of cloud, viewing it simply as a procurement option, no different than deciding between buying a car or leasing it.

Finally, according to the Wall Street Journal, FusionOps — “a Business Intelligence (BI) company that brings together cloud, Big Data, and a next-generation, user-friendly BI stack to deliver remarkable insights into your supply chain” — raised $12 million in a recent funding round. Here are some excerpts from the article:

The software takes data from customers’ SAP and Oracle systems to help them analyze their supply chains. It is also now providing data for Salesforce.com systems so that salespeople can understand their customers’ shipments and backlogs and what inventory might be available to sell to them, he said.

The new money will be used in part to offer additional support for markets in which supply chains are more specialized. FusionOps will also be adding to its management team, expanding globally and going from its 200 or so current customers to thousands, said Mr. Sakoda [a partner at New Enterprise Associates, the lead investor]…Current customers include Merck and Columbia Sportswear.

I’ll just repeat what I said last year in There’s No Silver Bullet for Supply Chain Visibility: Software is not enough in supply chain management. You also need to invest in trading partner connectivity and data quality management processes and systems if you truly want to achieve timely, accurate, and complete visibility to your supply chain. Otherwise, it’s still garbage in, garbage out — except this time on beautiful apps on mobile devices. For related commentary, see We Have a Big (Crappy) Data Problem in Supply Chain Management.

And with that, have a happy weekend!

Song of the Week: “Kathleen” by Catfish and the Bottlemen