The growing adoption of supply chain applications in the cloud and of those offered by the big ERP vendors will have a significant impact on supply chain technology over the next three years.
For the past six years, Gartner has conducted a research study of supply chain technology use. That study asks supply chain professionals to identify their key priorities now and in the future, cite barriers to success, quantify their business challenges, and describe how they exploit technology in their businesses.
[Figure 1] Lack of functional parity limits SCM SaaS adoption, but growth continuesEnlarge this image
Growing demand for cloud services
Cloud computing is becoming a significant force in supply chain applications, and Gartner believes that by 2016 more than 40 percent of new logistics applications will be delivered via the cloud.
In this context, "the cloud" can mean several things. It can mean providing on-demand access to an application, or it can be a pure multitenant, software-as-a-service (SaaS) application where there is a single instance of the software used by multiple customers simultaneously. There are also variants on the idea of a "private cloud" hosted by either a user or a vendor and involving a single instance of the software dedicated to a single customer.
Consistent with the larger trend within the information technology (IT) market, there has been growth over the past three years in the number of supply chain solutions that are cloud-based (public or private). At the same time, Gartner has seen the preference for sourcing new applications via the traditional on-premise approach decline from a high of 70 percent in 2010 to around 55 percent in 2012.
Despite this growing interest, cloud computing within supply chain management (SCM) is still relatively nascent and has a lower level of penetration than in areas like customer relationship management (CRM) or indirect procurement offerings. However, our research finds a significant intent by companies to source SCM applications through a SaaS model in the future. The most significant driver for the increase in SaaS adoption, according to the survey, is the desire to reduce upfront investment costs.
Gartner has also found that adoption level varies depending on the process complexity, degree of process sophistication, and size of the enterprise. Large, complex enterprises continue to favor traditional on-premise applications, although interest in the cloud is developing. Some of this is driven by large companies' propensity to want high degrees of control and customization/personalization. Small and mid-size businesses (SMBs), on the other hand, have largely made the transition to the cloud. For these organizations the benefits are the perceived time to value, low upfront capital investment, and the ability to shift much of the application maintenance to the cloud provider. Growth will come from more SMBs seeking cloud offerings as well as from large organizations changing their opinions of the cloud.
In our study, Gartner was also able to stratify responses based on various factors. One of the dimensions is "information technology adoption profile." Aggressive adopters of IT tend to be innovators, relatively risk-tolerant, and the first to embrace new concepts. Mainstream companies wait for technologies to become commercially viable because they tend to be more risk-averse, and they want to see evidence of success among companies like themselves. Conservative companies tend to be late adopters of technology; they are risk avoiders and wait for markets to mature and consolidate.
Gartner found notable differences in cloud adoption levels based on a company's IT adoption profile. Conservative organizations are still reluctant to embrace the cloud, preferring on-premise and hosting options. Aggressive adopters of IT, however, are more inclined to consider various cloud delivery approaches. Finally, mainstream companies are the most likely of the three to favor multitenant SaaS applications, which, given their risk profiles, suggests that concerns with cloud viability are waning. (See Figure 1 for current adoption rates and respondents' projections for 2015.)
Rise of the "mega-suite"
The second major trend is the emerging dominance of application mega-suite vendors such as SAP, Oracle, and Infor. Our data indicates that if these vendors continue on their current growth trajectories, they will command more than half of the market for logistics applications. The mega-suite vendors continue to invest in their logistics and supply chain management capabilities. While they might not have achieved "best-of-breed" status in each SCM application category, they do offer solid and reliable capabilities across the SCM application domain. This includes warehousing, transportation, planning, manufacturing, and sourcing and procurement. This is not to say that best-of-breed vendors are all dead. Rather, it just means that those customers that need only "good enough" capabilities will likely find offerings from the mega-suite vendors to be sufficient. To survive, best-of-breed vendors will have to be thought leaders and on the forefront of innovation.
In our study, Gartner wanted to determine how willing businesses would be to adopt enterprise resource planning (ERP) suite offerings. Respondents were asked to identify the likelihood of acquiring technology from their ERP provider versus a best-of-breed provider. While many specialized vendors continue to execute well, the study showed a notable preference toward ERP suite providers today.
The study found significant interest in leveraging ERP solutions when their features and functionality are comparable to best-of-breeds or "good enough" for the needed environment. The study seems to suggest that most respondents are selecting solutions that are "good enough" or support an ERP platform strategy rather than ones that are considered to be cutting-edge.
Indeed, ERP suites are preferred by businesses that consider themselves below-average (67 percent), average (77 percent), or above-average (74 percent). Businesses that consider themselves to be leaders, however, are more likely to prefer a best-of-breed approach. Within the leaders category, 56 percent indicated that, in general, an ERP platform was their preference, while 26 percent preferred a best-of-breed approach, where the focus is on differentiation and where functionality becomes the most important factor. The remainder of the respondents were indifferent. The leaders' preference for best-of-breed vendors was close to triple that of other organizations, which is one reason these organizations are often differentiated in their industries.
Business change is pervasive, and the pace is accelerating. In previous Gartner studies, almost 90 percent of companies indicated that the impact of change was growing, and they must develop business and IT strategies that are responsive and adaptive to change. At the same time, companies continue to live under financial pressures, so they need to invest their IT resources wisely.
Both of the above trends—cloud and the growing dominance of mega-suite vendors—are driven by these demands. Cloud is proving to be a means for companies to invest in newer solutions with less upfront capital, and it allows them to shift some of the burden of application management to the vendor, which will allow them to do more with less. Similarly the mega-suite vendors are now a force in SCM applications, as they offer many organizations the opportunity to more easily enhance their supply chain management processes by extending the reach of software that they already have in place. While neither is a panacea, companies that are considering upgrading their SCM portfolios should consider both of these strategies.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”