This Week in Logistics News (January 11-15, 2016)

I didn’t win the $1.6 billion Powerball jackpot. And if you’re reading this, neither did you.

So let’s go straight to the supply chain and logistics news that caught my attention this week:

2016 has begun like the year before: with Amazon in the headlines, continuing to push the envelope in logistics, continuing to keep competitors and others on their toes.

The Seattle Times reported this week that “sometime in the first quarter, Amazon is expected to acquire the 75 percent of the French package-delivery company Colis Privé that it doesn’t already own.” And yesterday, news emerged that the company’s Chinese affiliate, Amazon China, has registered with the U.S. Federal Maritime Commission to become a licensed ocean freight forwarder. This follows recent news that Amazon is negotiating to lease 20 Boeing 767 jets for its own air-delivery service and that it is buying thousands of truck trailers too.

What’s going on here? I’ll just repeat what I keep saying: I believe Amazon is taking these steps to gain even more control over its fulfillment infrastructure, adding weight to the hypothesis I put forward in Keeping Control: What 3PLs Must Convince Their Customers: that as manufacturers and retailers start to view logistics as a core strategic function, their desire to take more control will increase, and so their desire to outsource will diminish.

In technology news, Pitney Bowes announced that it acquired Enroute Systems Corporation, a cloud-based, software-as-a-service enterprise retail and fulfillment solutions company. Here are some details from the press release:

Based in Seattle, Washington, Enroute delivers advanced cloud-based, software-as-a-service transportation management system solutions to the shipping and logistics industries. Since 2008, Enroute’s enterprise-grade, multi-carrier shipping solutions have helped high-volume retailers and e-tailers with faster shipping execution times, lower shipping costs, enhanced business intelligence, and real-time supply chain visibility and tracking.

One of my predictions for 2016 is that parcel will come out of the shadows — that is, as e-commerce continues to grow, especially cross-border e-commerce, parcel is becoming a more important transportation mode for manufacturers and retailers, which will drive greater demand for parcel solutions and services. Enroute Systems addresses an important white space in the TMS market: the ability for retail stores, which are becoming fulfilment centers, to ship orders directly to consumers (“ship-from-store” in omni-channel parlance). The solution also facilitates inbound shipping processes from vendors/manufacturers to retail stores and warehouses. In short, this acquisition strengthens Pitney Bowes’ capabilities in the shipping space and it aligns well with the company’s new ad campaign — “Craftsmen of Commerce” — which it announced this week too.

Meanwhile, JDA Software announced further enhancements to its JDA® Warehouse Management solution. Here are some excerpts from the press release:

JDA Warehouse Management now includes expanded persona-based user experiences extending beyond managerial and supervisory roles to operational and functional roles, a fully mobile-enabled framework, and optimized ease-of-use via key enhancements to JDA Configuration Manager. These capabilities arm manufacturers, retailers, distributors and third party logistics providers (3PLs) with the information they need to quickly adapt to changes, optimizing and executing inventory, and maximizing tasks and resources strategically and responsively.

“Over the past year, we’ve been laser-focused on extending the new persona-based user experience to the operational and functional level, giving users a solution that flexibly interacts in the way they need, based on their role or location. In fact, early adopters of our latest version are already in pilot mode or about to go live imminently, which not only speaks to the strength of the re-visioned user experience but to the bolstered ease-of-use capabilities that accelerates deployment times and speeds time-to-value,” said Fabrizio Brasca, vice president, solution strategy, Intelligent Fulfillment, JDA.

I was briefed by the JDA team last week about this release, and as the press release emphasized, what struck me the most was the focus on improving the user experience, including on mobile devices which are becoming ubiquitous in the warehouse. As I wrote almost three years ago in “Will Supply Chain Software Vendors Start Competing on Design?”, there is a strong business case for software vendors and customers to focus on software design and user experience. Here are three reasons:

Faster, more cost-effective training. We all know that a 5 year old can pick up an iPad and start using it within minutes without any training. The same goes for an 80 year old. Imagine how much time and money companies could save if supply chain applications were, relatively speaking, as easy and intuitive to use as consumer applications. Instead of days (or weeks) of training, you might only need a few hours.

Improved productivity. How much more can you get accomplished in a day, with how many fewer people, if instead of opening 5 windows and clicking 20 times to complete a task, you could do it all from one screen with just one or two clicks?

Enhanced business intelligence. Do you know what happens if a system is too complicated or difficult to use? People don’t use it, or they find workarounds, which means you’re not collecting all the data you need to make informed decisions. But if the system is easy to use and data entry is quick and painless, you’ll start capturing more information, which will enhance your business intelligence efforts.

In JDA’s case, the UX enhancements have already produced a 10 – 15% reduction in configuration time and a 30% reduction in the overall number of screen flows.

Finally, in the realm of Supply Chain Operating Networks, Elemica announced that it was issued US Patent Number 9,224,135 for a Method and Apparatus for Adaptive Configuration of Business Messages. According to the press release:

The patent was issued for a feature of the network called Fix Me. Fix Me self-heals a variety of message failures that may occur between trading partners for numerous reasons…[such as] authentication issues, invalid content, incorrect or incomplete configuration, and errors in data enrichment or validation or system availability issues.

Fix Me enables a user to store the context of a failure. With the network gradually collecting these contexts and building up a database of issues and their associated fixes over time, the Elemica network is able to match the context of a failure more effectively and recommend changes to fix the issue [emphasis mine]. Once in place, a user can fix the issue ‘on-the-fly’ and eventually automate resolving such issues. Fix Me also tracks system outage schedules by partner and automatically holds or processes messages based on availability of partner systems.

This news underscores another of my predictions for this year — that we’ll see increased innovation to simplify and expedite trading partner (B2B) connectivity. It also points to another developing trend: the emergence of prescriptive capabilities in supply chain solutions, which is the holy grail of business intelligence and analytics. Don’t just tell me what is happening or will happen, tell me what to do about it or automatically take corrective action (with pre-approval). Although fixing message failures is not the sexiest application of prescriptive capabilities, it is tremendously important when you realize how much time, money, and resources companies currently spend addressing this problem.

And with that, have a happy weekend!

Song of the Week: “Blue Jean” by David Bowie

Note: Elemica and JDA Software are Talking Logistics sponsors.