Building a Business Case for Supply Chain Execution in the Cloud
Add Strategic Value to Your Business Getting your products to your customers is critical to business success. Yet often, supply chain execution, and particularly transportation management, is viewed as transactional and not strategic a cost center rather than a value-creator. For companies of all sizes, supply chain execution represents a huge opportunity to generate business value. In the past, investing in a supply chain execution (SCE) system meant a commitment to an enterprise installation, extensive integration and ongoing IT maintenance. While on-premises deployments of a SCE system may still make sense for a large company with an established IT infrastructure, today s Cloud and software-as-a-service (SaaS) based systems deliver a strategic solution at a much lower upfront cost and a faster time to benefit. In addition, they now cover several critical areas of supply chain execution, including transportation management, warehousing and logistics providing a single solution for greater efficiency, agility and overall visibility. In building a business case for moving supply chain execution to the Cloud, you should consider three key factors multimodal transportation growth, competitive advantage and return on investment (ROI). 1
1 Going Multimodal Even the smallest businesses have the potential to expand their reach and even go global in today s marketplace. With that growth opportunity comes greater complexity and risk in managing transportation and logistics. It is becoming increasingly important to improve visibility not just of outbound domestic shipping, but also to improve inbound visibility across all modes of transportation truck, air, rail and ship. This means that an effective transportation management strategy and an effective transportation management system (TMS) must include features that can help you manage the challenges that come with multimodal transport, including order-to-delivery visibility, carrier selection, rate management and compliance with local customs and trade regulations for international shipments. Cloud-based supply chain execution solutions that include a TMS component are particularly conducive to multimodal transportation environments because they enable fast integration to large numbers of partners, automatic updates to carrier rates and customs regulations, and on-demand visibility from anywhere. In addition, cloud-based supply chain execution and TMS solutions provide scalability as you need it, so there are no worries about not having enough capacity or investing in too much infrastructure before you need it. 2
Growth of multimodal transport Each year $13 Trillion of goods are transported by ship, roughly 70% of total freight. 3 (Source: World Trade Organization; The New York Times, October 2014)
2 Gaining Competitive Advantage In the past, small to mid-size firms have been unable to afford enterprise supply chain execution systems due to the high upfront costs of an on-premises deployment and the lack of IT resources to support it both during and after implementation. This has put smaller firms at a distinct disadvantage to larger firms who are gaining the many benefits that the more sophisticated transportation management systems deliver. Today, Cloud and SaaS-based SCE and TMS solutions level the playing field. The upfront cost is low, no hardware investment is needed and IT support is handled by the solution provider. In addition, partner integration is faster and easier, and updates to data such as carrier rates and customs requirements are automatically populated. Through the Cloud, you have an opportunity to quickly close the gap with larger players and gain a competitive advantage over your peers. With the right supply chain execution platform in place, you are well-positioned to increase your reach nationally, regionally or even globally, improve warehousing efficiency, handle multimodal transportation requirements and accelerate business growth. 4
Cloud-based SCE and TMS solutions make it possible for you to compete with larger firms. firms with $100M+ revenues use a TMS 50% 10% firms with $25-$100M revenues use a TMS 5 (Source: Logistics Management, February 2014)
3 Delivering Return on Investment Supply chain execution systems that include transportation management have proven their ability to deliver high returns on a recurring basis. In fact, transportation management systems and inventory management systems are cited by companies as delivering greater ROI than other supply chain technologies. Cloud and SaaS deployments of a SCE system have the potential to deliver that return on investment even faster thanks to low upfront costs and ease of integration. Quantifiable measurements of value include faster order-to-delivery cycle times, lower freight costs, lower inventory management costs, reduced compliance fines, less time spent on maintaining customs paperwork and the ability to select better carrier rates. Other benefits include increased visibility, greater agility and lower risk. No matter how you look at it, a supply chain execution system is a good investment.. 6
ROI from SCE and Transportation Management Systems is high. 77% cited lower costs as a result of supply chain technology 67% cited improvements in on-time delivery of goods 60% cited better operational performance 8% savings on freight achieved from TMS in most industries. 7 (Source: SupplyChain24/7, Supply Chain Technology Survey, June 2013) (Source: Logistics Management, February 2014)
Selecting a Cloud-based SCE System Armed with a business case that justifies moving forward, the next step is to select the cloud-based supply chain execution system that s right for your company. Since one of the benefits of going with a Cloud solution is fast implementation time, you don t want your selection process to be too long and delay your business from realizing the benefits. We ve provided a short checklist to guide you. Assessing the breadth and depth of platform capabilities e.g. does the vendor offer transport, logistics and warehouse management solutions in the Cloud is a good place to start. Software vendors who also offer an on-premises enterprise SCE platform are more likely to have greater breadth and depth of capabilities than a newly formed cloud-only solution provider. These vendors are also more likely to have an established track record of success and greater portfolio of lessons learned and experience that will contribute to your success. Global presence is also important. Even if all of your business is local right now, you may want to expand in the future. Global expertise is critical when it comes to multimodal support and knowledge of international customs requirements. Finally, a solution that delivers flexibility and visibility via on-demand dashboards will give you the control and insight you need to keep your supply chain in motion. 8
Checklist Breadth & depth of multimodal transport and logistics capabilities Intuitive, real-time web user interface Ease of integration Strength of customs capabilities Extensive carrier connectivity Integrated warehouse management and logistics oversight On-demand visibility and dashboards Guaranteed up-time and round-the-clock data center management Ability to handle multiple languages, currencies and time zones 9
Addressing Vertical Challenges to Deliver Value Logistics Service Providers Manufacturers & Shippers Retailers & Distributors Challenge Cost pressures continue to mount and managing multimodal transportation and warehousing complexity is an ongoing challenge as you strive to win and keep customers. Solution Cloud-based supply chain solutions provide visibility across your customer s entire logistics network to help you better manage the order-to-cash process, while keeping overhead low to support growth and profitability. Success in Practice Clover Group deployed a single, integrated platform across the business, avoiding silos and costly integration. They also gained end-to-end shipment visibility across operations, as well as automated event management and in-depth reporting all with the Kewill MOVE on the Cloud for LSPs platform. Challenge Global trade and online retail have increased the need for effective multimodal transportation and increased the cost of logistics, including compliance. Solution Cloud-based supply chain solutions can help you efficiently and effectively manage all aspects of your outbound and inbound logistics, with virtually no overhead and a fast time to benefit. Success in Practice Sargento achieved a 60% reduction in LTL shipments, a 15% reduction in shipment cost per pound and a 60% reduction in administrative costs all with the Kewill MOVE on the Cloud for Shippers platform. Challenge Today's consumer expects products delivered on demand. This expectation puts pressure on retailers to improve efficiency, speed and accuracy for near flawless supply chain execution. Solution Cloud-based supply chain solutions can help you accelerate order-to-delivery cycle times, with virtually no overhead and a fast time to benefit. Success in Practice Shop Direct achieved savings of over $1.6 million a year while still meeting customer delivery timelines. Improving collation of orders fulfilled via drop shipping resulted in individual items being grouped into fewer packages for less waste, greater sustainability and lower costs all with the Kewill MOVE on the Cloud for Retailers platform. 10
Invest in the Right Technology Technology that gives you greater visibility across your supply chain from inventory, to product tracking, to multimodal shipping options, to customs status will increase efficiency, lower operational costs and ensure you give customers accurate, up-to-date information. Determining the right multimodal transportation mix, the best carrier rates and the most effective path for getting products into the hands of customers is complex. Reversing the logistics process in the event of a return can be equally complex. The right technology can minimize complexity and lower overall costs while at the same time enhancing agility and improving customer service. Cloud-based supply chain execution technology can give you a strategic advantage in managing multimodal transport carriers, gaining a competitive advantage in the market and delivering tangible ROI to the business all with a lower upfront cost and faster deployment than traditional on-premises solutions. With the right business case in hand, moving supply chain execution to the Cloud can become a reality sooner than you think. 11
About Kewill Kewill MOVE on the Cloud solutions for LSPs, Shippers & Manufacturers and Retailers & Distributors offer the perfect combination of supply chain agility, visibility and control you need to be competitive in your industry. Kewill, a Francisco Partners portfolio company, is a global leader in multimodal transportation management software, providing organizations with a comprehensive end-to-end platform for managing the complexities of transportation, logistics and trade compliance. The Kewill MOVE platform helps companies reduce costs, manage volatility and gain greater visibility across the logistics value chain. Trade, transport, store, comply, manage and integrate the Kewill transportation management platform gives you the insight, agility and tools you need to deliver better customer service and streamline global supply chain execution for strategic advantage. The Kewill platform supports supply chain execution activities for more than 7,500 companies in over 100 countries. Visit us at kewill.com. KEWILLR Keeping Your Supply Chain in Motion 2015 Kewill. All rights Reserved.