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A Conversation with Robert R. Haney

Director, SeeChange Services Product Management, APL Logistics

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LQ: How and when will 3PL providers work off a centralized system/software that links all their global operations? Currently each country or office wsorks off their own preferred software, and most are not set up to interface with shippers or receivers. (Sue Gadsby)
Robert Haney: It is our job to deliver consistent service regardless of origin. The APL Logistics approach to global operations is to combine global systems, local staff and strong process discipline.
APL Logistics offers a proprietary mainframe application to manage our customers’ bookings and operations globally. The deployment of a single system across all origins is a key component of our core service.But working from a centralized system that links global operations is only part of the solution.We must have people working in offices at each point of origin around the globe; systems are no substitute for local language and local people.
Finally, our people adhere to strict operational logistics procedures and processes that are governed by a service integrity group, which focuses on operational excellence and consistency across origins. Information exchanges with our global mainframe booking system are monitored and maintained by our in-house team of EDI specialists and by tightly integrated applications that also support exchanges for shippers and receivers. A large importer who is running an ERP system will connect with our global mainframe through standard EDI interchanges, sending the purchase order (PO) and receiving an advance shipment notification (ASN). For the importer, the interface is automated and system-to-system oriented. The vendors at origin may not be prepared to work with EDI, so in order to facilitate data exchange,APL Logistics has developed easily deployed Web-based systems such as PO Manager and Booking Manager. By converting EDI data to a viewable PDF,the PO Manager application allows vendors to review and download POs sent from the importer via EDI.
When ready to book, the factory can use Booking Manager to create and confirm the booking online. For vendors and importers that require more detail, APL Logistics offers an internationally deployed label printing and scanning application and network. This system is also tightly integrated with the global mainframe, allowing a vendor to print and scan labels while stuffing a container and to upload this detailed data file directly to the mainframe. The importer receives the data in its ERP system via EDI as an advanced shipment notification.
All of these systems—from our global mainframe booking system, the EDI interface and the Web-based applications to the internationally deployed labeling and scanning systems—are proprietary to APL Logistics.By owning and maintaining our own systems, APL Logistics is able to flex to support customers’ requirements, which span multiple verticals and are worldwide in scope. Internationally deployed and integrated systems are a core component of an overall 3PL solution. Building and maintaining mission-critical systems means we have the flexibility to support our customers with their complex supply chains.
But the software system is only the beginning. IT alone is not a competitive differentiator in the modern supply chain environment. Technology is just one component of a network of interrelated competencies that must manage and enhance increasingly complex global businesses. IT is a core component of any competitive value proposition, but its strategic relevance is predicated on organizational alignment, process excellence and forward thinking.The IT advantage that APL Logistics offers is a globally integrated platform that complements our operating expertise. It gives customers an end-to-end multimodal decision-making capability that is supported by customer-service and other functional experts.
APL Logistics has positioned technology as an interactive tool that enables our customers to interact with their supply chains. Customers look to APL Logistics to provide technology solutions, but the primacy of IT as the “ultimate solution” is waning. Service providers and customers now acknowledge the importance of balancing IT capabilities with excellence in operations and execution. Customers ask APLL to enhance the overall efficiency and value of their supply chain networks, not simply to provide an IT solution.
Services like PO management,inventory visibility,mode optimization and metrics require a convergence of functional competence.Technology is one spoke in a wheel of capabilities that enable APL Logistics and customers to collaborate on complex solutions and performance improvements.
LQ: How feasible is it for a 3PL that serves a multitude of customers in disparate industries to develop a single technology platform to address customers’ distinct needs? Are technology needs forcing today’s 3PLs to develop smaller market segments to address these needs, or are the tools sufficiently robust to accommodate variation in data capture, communication and processing? (Tom Goldsby, Ph.D.)
Robert Haney: It is feasible for a 3PL to effectively serve customers across multiple verticals. However, the supply chain knowledge and operational flexibility required to deliver consistent operational excellence across disparate industries cannot be purchased with a packaged technology solution. The capacity to effectively serve customers across verticals must be purposefully developed in house and grown through experience. The key requirements for cross-vertical support are end-to-end systems and an effective global implementation team.
This question of feasibility regarding single platforms is appropriate, given how the technology needs of modern supply chain managers are stretching our systems’ capabilities with regard to data integration and system functionality. In order for systems to span multiple 3PL services across multiple verticals, the systems must provide independent support for unique segments of the supply chain while at the same time offering the ability to “plug and play”—in other words, flexing to deliver end-to end solutions.
At APL Logistics, our core systems each address a specific supply chain operation. For example, we maintain systems to address purchase order distribution, label printing and scanning, booking management, consolidation optimization, deconsolidation, origin warehouse, rail management, domestic freight optimization and management, and document management systems, to name a few. Each of these systems can be deployed in a stand-alone mode as needed, or it can be integrated to deliver a complete supply chain solution to support varying models across verticals.
But solving the systems challenge alone is not sufficient to deliver effective cross-vertical supply chain solutions. Knowledge of best practices and vertical-specific implementations must be a core competency of the service provider.At APL Logistics we house this knowledge in our Global Implementation Solutions Group.This team follows clear implementation requirements and development processes and has successfully deployed solutions for a wide range of industries, from retail to automotive to e-goods customers, each with unique supply chain challenges. The ultimate solution is to leverage a combination of flexible proprietary systems and purposefully developed inhouse vertical solution implementation experience. This combination has enabled APL Logistics to effectively deliver internationally deployed solutions that include label and scanning systems for a clothing retailer; warehouse and freight optimization for a chemical supplier, with cross-border customs integration in Latin America; and vendor-managed inventory (VMI) solutions for the electronics and automotive industries.

Questions for this Executive Interview were prepared by LQ’s board members:
Sue Gadsby, Director, Procurement, Apotex Inc.,. and Tom Goldsby, Ph.D., University of Kentucky.

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