Tuesday, January 21, 2003

Blocking and tackling in the warehouse

A recent survey of supply chain managers and executives revealed that a surprising number of companies have yet to fully adopt transportation and warehouse management systems (TMS and WMS) and advanced planning and scheduling (APS) systems, and that these systems are only now becoming more broadly accepted.

The study found that only 15 percent of responding companies had fully implemented TMS, while another 10 percent were in the process of implementation. Adoption was somewhat better for WMS, with 35 percent having a WMS in place and another 10 percent in process of implementation. Still the study found that interest in such solutions is high, with an additional 24 percent considering TMS and an additional 35 percent considering WMS.

"We were surprised by how interested people are in those fundamentals — systems that help in the warehouse or that help in the transportation function, for instance," said Thomas Goldsby, assistant professor of marketing and logistics at Ohio State University, who was one of the study’s authors. He also said they were surprised that these systems, which he calls "blocking and tackling" technologies of logistics — had not seen broader adoption given the IT spending spree of the late 1990s and the widespread buzz about supply chain collaboration in recent years.

In my opinion, such findings are not surprising to anyone who has actually spent any time among midsize manufacturing and distribution firms. The gap is huge between what vendors offer and what most midsize hard-goods firms have actually implemented. Companies may have back office systems such as accounting, purchasing, and customer order management under control, but out in the warehouse there is still a tremendous opportunity for basic execution systems such as warehouse and transportation management. This should be good news for vendors of such systems, such as EXE, Manhattan Associates, Optum, and Catalyst, as well as the hundreds of niche vendors that offer point solutions in this space.

iSource has a complete report on the study.