This Week in Logistics News (February 13-17, 2017)

By Adrian Gonzalez

What do you when you have no school due to snow? You build a 10 ft. 6 in. giant snowman.

At least that’s what my kids did this past Monday, with the help of a couple of neighborhood friends.

All this week, people have been taking pictures with Billy Bob Joe III, including firemen who snapped photos with their phones as they drove by in their big red engine.

The temperature warmed up into the 40s yesterday, but Billy Bob Joe III is still standing, and if you listen closely, every morning at sunrise, you’ll hear him singing this week’s “Song of the Week.”

Now, here’s the supply chain and logistics news that caught my attention this week:

One of my predictions for this year was that investors will continue to see opportunities in Supply Chain Operating Networks, based on various mergers and acquisitions over the past couple of years. Well, add another deal to the list: E2open announced this week that it has merged with Steelwedge, a software company focused on best-of-breed Sales & Operations Planning (S&OP) / Integrated Business Planning (IBP) solutions. Here are some details from the press release:

Founded in 2000, Steelwedge’s cloud planning platform helps companies align product, sales, demand, supply, strategy, operations and financial decisions across roles, geographies, products, time horizons, channels, customers and suppliers to improve efficiency and outcomes. Leading global enterprises including Canon, Pfizer, HP Inc, Jaguar Land Rover, Lenovo, Nissan and Monsanto rely on Steelwedge’s cloud-based solution.

Last year, E2open acquired two other planning-related companies, Terra Technology and Orchestro. I was recently briefed by the company and it’s clear that the addition of those two solutions to E2open’s network platform have opened up new growth opportunities for the company. Adding S&OP and IBP capabilities will certainly strengthen E2open’s collaborative planning solution footprint. In the bigger picture, however, I believe this marks a new and better approach to S&OP, one that saves it from extinction.

Back in August 2013, I wrote a post titled “Is the Traditional S&OP Process Outdated and Heading to Extinction?” where I highlighted the following comment by Tony Martins, who at the time was the VP of Strategic Services at Halo Pharmaceutical:

The problem [with the traditional S&OP process] is that it takes three weeks, usually, to deal with something that already happened last month. And you’re doing demand planning with data that is old. By the time you get to the third week of the month, demand has already changed. The world doesn’t stop moving while everybody is having these meetings and producing these [graphs and reports]. The data you see on the graph on the third week of the month is already obsolete. I remember many times going to these sessions with the standard graphs and then having to bring additional graphs to bring everybody up to date on what happened the past few weeks. [This process] doesn’t make any sense, not for the world that goes very fast.

Simply put, S&OP in a Supply Chain Operating Network model overcomes this outdated data challenge; it provides manufacturers and retailers with an alternative approach to synchronizing demand with supply, an approach that can sense demand more quickly and accurately than traditional methods and can facilitate trading partner communication and collaboration more effectively too.

In other technology news, the Wall Street Journal reports that DB Schenker is taking a $25 million stake in online freight booking platform uShip Inc. Here’s an excerpt from the article:

The investment is the latest in the logistics world to pair an established company—DB Schenker was founded in 1872—with a technology-focused business…Founded 14 years ago, uShip is older than some of the more recent startups that boast of technology that would disrupt shipping. But the privately-held business also has an established business and claims that its shipping marketplace has handled more than 1 million shipments.

DB Schenker’s investment will be put toward developing uShip’s technology, marketing and other operations, said Chief Executive Mike Williams. The company is also looking to sign licensing agreements with other logistics providers outside Europe, he said.

I’ll just repeat what I’ve said many times before: Startups — as well as Amazon and Uber — are forcing entrenched players in the logistics industry to “up their game” with regards to technology. Their success or failure will ultimately depend on whether shippers and carriers take them seriously, and whether they provide a better value proposition than the status quo.

Finally, as parcel shipping becomes a growing mode of transportation for many companies, the need to manage that spend more intelligently is also growing, which is why Chainalytics announced this week that it has added a Parcel Spend Optimization service to its practice. The service includes the following activities:

Analyze carrier agreements across ground, domestic air and international air parcel spend.
Create and execute a comprehensive spend management strategy that optimizes rates and terms to reduce costs and refreshes carrier mix or consolidates carriers and agreements for volume and/or route leverage, administrative efficiency and consistency.
Deliver monthly parcel spend analytics to ensure carriers are in compliance with the client agreement, and schedule periodic follow up to explore additional savings opportunities based on mode optimization results, time-in-transit studies and inbound or packaging analytics.

The main takeaway here is that as e-commerce grows, so do opportunities across all facets of the logistics industry, including software, services, and consulting.

And with that, have a happy weekend!

Song of the Week: “I’m Still Standing” by Elton John