Logistics Quarterly Magazine - Volume 16, Issue 3, 2011

What to Expect in 2011

Chris Norek, PhD, Senior Partner, Chain Connectors, Inc.

Well, we’re through another year and this one was a tough one. Hopefully, 2011 will be a better year for all. The good news is that in technology, advancements happen fast and frequently. Also, with prices rising in most areas of the supply chain, technology is a nice reprieve. As time goes on, technology becomes cheaper and more capable. Let’s take a look at what might happen in the coming year.

Areas of General Technology

I have discussed Software as a Service (SaaS) in previous Technology Toolbox columns. To me, it is one of the more exciting changes that occurred in the supply chain solutions market in the last several years. The option of and continued growth in SaaS has provided significant flexibility in pricing and selection of functionality for supply chain software. Traditional license fee pricing of buying a “full” access license has been supplemented by the ability to buy in a more affordable and “piecemeal” fashion. Now, companies can get the benefit of supply chain software capability while paying in a fashion that better fits their needs and budget. Initially nicknamed “by the drink” where each transactional use of software was charged, SaaS has evolved into many flexible pricing and functionality options.
There is a significant range of the use of outside software in the SaaS arena. A company could opt for the more robust solution and have a third party manage the software, the hosting of the software and that data housed in the software. On the more minimalist side of the spectrum is the purchase of individual transactional use of supply chain software. These options are called many different things but essentially, they point out how much a company uses and relies on an outside company for the software help. As examples, “on demand” use of software is another term which is related to the minimal end of SaaS and “managed hosting” or “full-managed services” are other terms which refer to a more robust use of software capabilities.

A couple of other terms you’ve probably heard include “cloud computing” and “virtualization.” Cloud computing enables efficient delivery of Software as a Service. Essentially, users share virtual space in a “cloud” of available space. Virtualization is the balancing loads on the hardware within a cloud to enable the operationalization of hosting and software management.

A quick additional thought: there’s one software use option that might be “free”— if you use a third-party provider, you might be able to use their software for free. Outsourcing contracts might include warehouse management (WMS) and transportation management system (TMS) functionality, among others. Something to keep in mind.

Specific Functional Areas

Here are a couple of areas of specific functionality that will gain some more visibility in 2011.

Import/Export Compliance – Customs and Border Protection policies are going to get tougher as security procedures are continually upgraded. Anything you can do to help speed your customs clearance will help.

Reporting – Software that allows companies to easily manage data and create analyses and reports. Essentially, they are database management capabilities allowing people to slice and dice their data for their own specific needs.

Suggestions for 2011

Here are some points to keep in mind regarding technology as we begin the new year. Some of these are recommendations I made in my earliest Technology Toolbox columns, but still ring true: Revisit technologies you have looked at in the past and chose not to pursue for whatever reason. Technology, including pricing and capabilities, changes quickly. This might have been due to financial constraints or not being ready for particular technology capabilities.“Techies” do rule the world — make friends with them and learn from them. You will benefit from having a supporter in the IT department. Your friendship might move you up on the IT “to-do” list. Understand that you may need a “translator” initially because IT folks and supply chain people speak different business “languages.”Become knowledgeable of the newer solution delivery methods like SaaS, their use and their pricing options.Don’t be afraid of technology — it can make your job and that of those around you much easier!I wish all of our readers a prosperous and happy 2011!

Special thanks to Scott Sykes and Chris Lauritzen for helping the author with input for this article.