This Week in Logistics News (October 5-9, 2015)

By Adrian Gonzalez

Having spent much of this week on the road, I am still in catch-up mode with emails and phone calls, so let’s go straight to the supply chain and logistics news that caught my attention:

Elemica announced its new Sourcing Optimization solution that enables companies to “execute complex sourcing activities alongside supply chain visibility and collaboration efforts with contracted suppliers on the same platform…Powerful mathematical optimization algorithms allow users to quickly and efficiently evaluate complex, interdependent bids that have millions of factors, attributes and combinations.”

Simply put, as supply chains have grown in scale and complexity, so has the logistics sourcing process. Leading companies are looking to take a more integrated approach to logistics sourcing — that is, they want to take an end-to-end network perspective instead of a fragmented, mode-by-mode approach — but they are limited by the technology they have, which in many cases is just an Excel spreadsheet. Sourcing optimization tools have been around for a long time, but with advancements in cloud computing and analytics technology, they are more powerful than ever. In many cases, however, the tool is not enough — companies also need consulting help to gather the necessary data, conduct a network analysis, and plan and execute the sourcing engagement.

For more on this topic, check out our upcoming Talking Logistics episode, Make Better Logistics Sourcing Decisions with Data-Driven Optimization (Thursday, October 15, 2015), where Kristie Beck, Vice President of Product Management at Elemica, and I will discuss how the logistics sourcing process is changing and what actions companies should take in response.

In other technology news, MercuryGate announced a cooperative agreement with the International Federation of Freight Forwarders Associations (FIATA) to provide its global membership access to its transportation management system (TMS) for a reduced cost. According to the press release:

Under terms of the agreement, freight forwarders who are FIATA members, may elect to participate in the program and pay a special discounted set-up fee and per-transaction fee to gain full access to MercuryGate’s international TMS that includes advanced planning, execution and shipment settling functions as well as visibility and reporting capabilities.

In the FIATA instance, Air and Ocean schedules are available for a small additional fee. Companies that have workflow and functional requirements different from or that extend beyond those of the FIATA instance have the option to work directly with MercuryGate to negotiate a separate agreement.

Anne Sandretto, Chair of the FIATA Advisory Body Information Technology in Taipei, said: “I am happy that today we could finalize a MoU which would offer a powerful International Supply Chain IT solution to our members in particular taking into account of the requirements of our small and medium size enterprises [emphasis mine].”

As I’ve written before, supply chain and logistics software vendors — especially TMS vendors — have a renewed focus on growing their presence in the small and mid-sized business (SMB) market, which remains largely untapped. A big challenge, however, is lead generation, along with minimizing cost-of-sales and implementation time and costs. This agreement with FIATA helps MercuryGate address those challenges in the freight forwarding industry by giving it easy access to a large community of potential customers and offering them a standard cloud solution to deploy. It doesn’t guarantee FIATA members will deploy the solution in large numbers, but it definitely gives MercuryGate an easier and more cost-effective path to sell to them. In the weeks and months ahead, I expect other vendors will seek similar partnerships with industry associations and other parties that have large memberships or communities of SMB companies.

In global trade news, after years of negotiations, the United States and 11 other countries reached a deal on the Trans-Pacific Partnership (TPP) agreement. Now the trade deal heads to Congress, where it faces a long and contentious battle. As reported in the Wall Street Journal, “only a handful of Democrats support Mr. Obama’s trade policy, and Republican support is unpredictable in the 2016 election year, depending on the stance of presidential candidates and new leadership in the House. As it is, the deal can’t go to a vote before Congress until early next year.” Hillary Clinton, who previously supported the trade agreement, is now against it (you either gotta love politics or hate it).

For related commentary, please read Free Trade Agreements: Like Planning a Wedding Reception, where I summarized a conversation I had with Pete Mento, former Director of Global Customs and Trade Policy at C.H. Robinson, about the Trans-Pacific Partnership agreement.

Finally, in news related to my commentary earlier this week about supply chain talent, both APICS and MIT announced new certification and learning programs for supply chain and logistics professionals. Here’s an excerpt of the MIT announcement:

MIT announced today a pilot program allowing learners worldwide to take a semester’s worth of courses in its top-ranked, one-year Supply Chain Management (SCM) master’s program completely online, then complete an MIT master’s degree by spending a single semester on campus.

MIT also announced a new academic credential for the digital age: the “MicroMaster’s,” which can be earned through MITx by students who pass a comprehensive examination upon the successful completion of the same semester’s worth of online SCM courses. Classes begin on Feb. 10, 2016.

On the one hand, I applaud MIT for embracing online learning and creating new paths for people to discover supply chain management and earn degrees in the field. On the other hand, I can appreciate the following comment posted on LinkedIn by an MIT alumnus:

This program degrades the value of my degree by opening this up to people who are only in Cambridge [MIT’s campus] for 4 months. I don’t see how anyone can do the first semester work remotely to the same level of depth that my classmates and I had to a decade ago. Give them a different degree of certificate. Don’t penalize those in the past that made the full investment in MIT.

What do you think? Post a comment and share your perspective!

And with that, have a happy weekend!

Song of the Week: “S.O.B” by Nathaniel Rateliff & The Night Sweats