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Why You Must Think Differently About Supply Chain Technology Strategy

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At CSCMP, SupplyChainBrain sat down with MPO co-founder and CEO, Martin Verwijmeren to break down the “multi-multi” supply chain complexity problem. “Many companies these days are facing a different environment, different dynamics,” Martin explains, referring to the increasing recognition that organizations today operate as part of an ever-expanding ecosystem. Often referred to as multi-enterprise supply chain business networks, these partnerships represent a fraction of the ‘multi-multi’ complexity businesses struggle with today. Martin goes on to explain that “companies need to serve multiple sales channels, multiple stores, multiple sites, multiple warehouses, multiple factories, multiple suppliers, multiple sourcing flows and so on.” This, in addition to operating across multiple countries having multiple currencies and needing to collaborate across multiple languages.

It's a complex structure that is often unpredictable in nature. Partners cannot always be relied on, and issues of inflation, material shortages, and rising logistics costs serve to further complicate matters. However, Martin’s view is a unique and highly optimistic one: The businesses that find lasting success are those that embrace complexity.

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The static, linear approach is counterproductive

“The supply chain is not linear, but a multi-multi relationship of many to many,” says Martin. And yet, he observes, companies tend to operate their supply chain as if they were static entities. For instance, order flows move from silo to silo in batches, starting with standard processing via an ERP system, then move on to a warehouse management system (WMS), then on to a transportation management system (TMS) in a kind of assembly line.

The impact? A lack of flexibility and agility to adjust order plans when exceptions and disruptions occur. Static solutions are not equipped to handle uncertainty and recalibrate when conditions change. “We need to look at different ways to address (unexpected) issues, otherwise you risk on-time and in-full (OTIF) performance.” Without smart, dynamic technology that can see across the end-to-end supply chain in all its complexity, companies miss out on always choosing the lowest cost options available in the market, maintaining the highest service levels, and operating sustainably. The bottom line is that customers want to be delighted – no matter the circumstances.

In short, a static and linear approach can’t support the complex nature of today’s multi-multi supply chain reality. “We see that companies that are most successful embrace the complexity,” says Martin. Operating in today’s volatile, global, omnichannel market requires businesses to think differently when it comes to technology strategy. To think beyond the static systems and silos they’ve grown accustomed to – and that may have served them well in the past.

Transportation Management Systems must embrace complexity

“Traditional TMSs definitely do have a place,” explains Martin. Transportation Management Systems are leveraged by logistics teams to book consolidations, select carriers, calculate rates, and other transport execution activities. “However, these systems oftentimes work in a kind of batch nature. So, they work once an hour or once a day, which is not sufficient to cope with the dynamic nature of today’s businesses.” Martin also points out that there are often mode or regional limitations; not every transportation management system will support all the markets a company is active in.

When asked whether resolving these limitations is simply a matter of implementing new modules or something entirely new, Martin confirms it’s the latter. “You need to make a quantum leap to hook onto the new reality to address the multi-multi problem. It’s not a small step, it’s a big step but doable.”

MPO Multi Party Orchestration Platform

What’s replacing the traditional TMS to better serve the new multi-multi reality is the TMS+ which takes a different approach to supply chain execution. “It doesn’t consider transportation in isolation, but it hooks transportation management to the wider picture of logistics and supply chain management.” Unlike traditional transportation management systems, the starting point is with the order, regardless of the type (sales, purchase, transfer, return). In addition to the traditional functions of transport management software, the TMS+ includes order management and provides greater visibility and control over order planning and execution in one single-view platform.

What’s revolutionary here, is that companies can orchestrate and continuously optimize across the full order lifecycle. With visibility across and execution control across all physical and administrative steps in the supply chain - including warehousing, cross-docking, import, export, final mile delivery, appointments, white glove services, pickups, returns and so on – businesses can manage service levels, costs, and even sustainability in real-time, on one smart and dynamic environment.

 

MPO is a global cloud platform for Multi Party Orchestration. Brand owners, shippers, and logistics service providers across the globe leverage the TMS+ to embrace complexity – factoring everything from partner capabilities, available capacities to service levels, costs, inventory availabilities, product characteristics, GHG emissions and more – and consistently deliver on the best customer service levels at the best costs – no matter the conditions.

You can also get to know the MPO Transportation Management System (TMS+) by browsing the solution page, get in touch by reaching out to info@mpo.com, sales@mpo.com, or requesting a demo today.

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Go Beyond Transport to Optimize Cost, Service, & Resiliency

Integrate planning, order management, and multi-party orchestration into supply chain execution

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