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Editor's Viewpoint

by Fred Moody

Seamless Services in Logistics

It’s clear that companies in the field of logistics need to be Webified. When you read the articles rich with e-business and other information provided by executives from around North America in this issue of Logistics Quarterly, you’ll see how logistics is undergoing an unprecedented transformation. In terms of the speed of change, for everyone concerned, it could be likened to going from a Zaboni driver to NHL centre.

Many small and medium-sized businesses, and frequently large corporations, are benefiting from third party providers that have taken the precursory step to introduce many companies to Internet-based transportation and logistics procurement processes.

In this issue of LQ, we have some outstanding contributions in this regard, from ABF’s Bob Davidson, Mercer Management’s David Bovet and Joseph Martha, to CTI LOGISTIX’S Mark Morrison, i2’s Ian Lodge, Decartes’ Jason Read, as well as others.

Often times, though, larger companies possess their own systems, having invested far too much money and time in software, people and hardware, to start from scratch in the drive to benefit from the latest e-business technologies, via the Internet. So they introduce old-school systems to new ones, with significant integration undertakings. Today’s businesses, especially those that have relied on Enterprise Resource Planning (ERP), a range of activities from product planning to parts purchasing, to Electronic Data Interchange (EDI), a standard format for exchanging business information, know that simply maintaining legacy applications means they aren’t only standing still, they are conceding to the competition.

Recently, I spoke with several logisticians who are currently using sophisticated EDI systems and looking forward to enhancing and further leveraging the advantages of the Internet for their businesses. But, they have noted integration will be a key part of this process. Not surprisingly, a $1.5 billion industry that integrates applications into Internet-based systems already exists - and in the future an estimated 60 percent of application development technology budgets will focus on existing applications that, by 2004 have been in service for more than five years, according to GartnerGroup, based in Stamford, Connecticut.

For some companies it is clear that shifting to Web-based applications is less painful than one would think. There is another solution that is becoming increasingly popular, namely fourth-generation transportation and logistics management systems that include load-matching, consolidation of shipment options, and overall customer service choices for outsourced logistics management. They are also called Application Service Providers (ASPs) - focusing primarily on transportation management systems via the Internet.

The savings can be tremendous. The resources and expenditures for such overhead costs, software expenditures, IT personnel, hardware - all can be directed to other places in a company if this option is applied.

As we begin a new year, it more important than ever before that professional logisticians continually take full advantage of the chances to transform their businesses through technology and information management. This point was emphasized a few days before the holiday season when I met with the CEO and several executives of a U.S.-based ASP company that is making a foray into Canada and Europe.

In regard to such ASPs, logistics professionals can benefit from supply chain management technology and the Internet and ASP software that’s been expensive to develop, often in the range of an estimated $1 million, with a much smaller investment that involves configuring an Internet-based system to the their own specific business rules and integrating systems to develop an ERP processes. Transportation management through the Internet links logisticians, shippers, carriers and third party logistics providers and can also give everyone an advantage in terms of the visibility, no matter what mode of transport is being used.

Shippers can see carriers posting loads through some exchanges as well as confirm and accept loads. Some exchanges promise to allow shippers, carriers and third-party managers to conduct shipments with customers and manage their internal work flows, all via the Internet.

Other exchanges offer freight forwarders, shippers and carriers a means of optimizing the flow of information around the globe, for booking, document and shipment control and settlements in all modes.

We look forward to examining systems like this as well as other e-business opportunities for logisticians in the new year. These types of transportation exchanges can’t be ignored - they will clearly warrant considerable attention in the near future.

Last, but certainly not least, as we conclude this year, I want to thank our many contributors who have enriched our readers with information and insights that I believe are both profitable and entertaining.