One of the hottest topics in the world of supply chain and logistics is “systems integration”. Defined as the ability to connect the software applications of multiple players across a supply chain in a way that improves operations, visibility and customer service, technology-based integrations have been greatly enhanced in recent years by innovations that include Application Programming Interfaces (APIs) and the Internet of Things (IoT).
Although there are many benefits to systems integration, a great deal of emphasis has been placed on the element of visibility and the need to know the locations of products at any stage of the logistics process. In an environment where disruption and delays are a daily reality, a window into the location of merchandise is no longer a “nice-to-have”; it is essential to the success of any company whose business model centers on the physical movement of goods.
Whereas visibility is indeed a “must-have” for both domestic and international markets, it is the contention of this blog post that companies need to take a more holistic view of systems integration. Specifically, to get the most out of any integration, it has to facilitate planning and enable operational execution, but also provide companies with the data they need to make in-the-moment decisions, all while remaining sensitive to the cost implications of their actions.
Up until just a few years ago, most companies used Enterprise Resource Planning (ERP) software as a stand-alone tool to manage the internal aspects of their business. With the goal of providing a “single version of the truth” for all system users, early versions of ERPs focused on in-house operations and didn’t incorporate the external activities of suppliers, customers, transportation providers or third-party logistics companies.
As businesses continued to outsource functions like manufacturing, warehousing, distribution and shipping, ERP firms realized that in order to enhance the value of their own software, they had to offer connectivity to the systems of third- party supply chain partners. Without question, previously mentioned breakthroughs in API and IoT technology opened the floodgates to systems integration, thus creating multiple scenarios where multi-party connectivity and information sharing are now a well-established business practice.
When it comes to FTL shipping, systems integration has traditionally meant connectivity between a shipper’s ERP software and a Transportation Management System (TMS). Bearing in mind that ERP functionality includes sales forecasting, inventory status and sales order management, the ability to link the internal processes tied to an outbound order with the shipping functions of a TMS creates substantial value for both shipper and consignee.
Based on the ability to transition an outbound order into an FTL shipment, there’s no disputing the value that an ERP/TMS integration creates for areas as diverse as multi-departmental workflows, FTL contract management, operations with carriers, document generation and freight payment. Of equal importance, the extension of a sales order into a shipping environment allows companies to manage transactions well beyond the confines of their own facilities.
With the above benefits clearly established, the next innovation for FTL systems integration is found in features that allow companies a greater degree of operational flexibility, while having access to accurate lane-specific rates.
The integration of ERP and TMS software was a big step forward, but based on the core functionality of each system, it does have certain limitations. First, and as noted previously, ERPs are more internally oriented and although they’ve gotten a lot better, weren’t originally designed for connectivity with third parties. Second, TMSs tend to be rigid because operability is limited to the carriers, lanes and rates that are uploaded to the system.
While it must be acknowledged that TMSs do an excellent job with functions like load tendering, load acceptance/rejection, cascading, shipment execution and freight payment, load execution is limited to the carriers, rates and lanes in the system. In other words, the shipper’s access to carriers is limited to those in the TMS and as market conditions change during the year, it’s possible that rates will become stale, paper rates increase and load rejections abound.
The Emerge Freight Procurement Platform was purpose-built to address the above issues and when integrated with a TMS (and in turn, an ERP), creates a model that gives shippers the carrier access, operational flexibility and rate updates they need to manage any FTL program. Here are but a few of the features born of systems integration between ERPs, TMSs and the Emerge Freight Procurement Platform:
With more than 40,000 marketplace carriers on the Emerge Platform, shippers are no longer limited to providers that were previously uploaded to a TMS. With a TMS/Emerge integration, shippers gain unlimited access to carrier capacity and market-sensitive rates. As a shipper engages with additional carriers and new rates are added to the Platform, all data is updated in the TMS and shared equally.
Emerge offers shippers spot rates that can be quoted in minutes. The ultimate in flexibility and sensitivity to lane-specific pricing, systems integration allows for the immediate sharing of shipment data once a load is tendered to a carrier.
In recognition of the importance of visibility to supply chain and logistics operations, the Emerge Platform makes the most of API and IoT technology to offer real-time visibility into all loads. Offered as an enhancement to the visibility that some TMSs offer, this feature allows users to track shipments using multiple reference numbers (e.g. sales order number or bill of lading number) to not only determine the whereabouts of a load, but to pinpoint what goods are in the trailer being queried.
While there is still more work to be done in integrating systems, technology continues to advance and with more applications being developed, all players in a supply chain will benefit from systems integration. Whether a shipper sells domestically or internationally, or they ship via truck, rail, air or ocean transport, the sky is literally the limit when it comes to ways in which trading partners can be more efficient, increase visibility and improve the customer experience.
Is it time to get your “data house” in order?
When it comes to FTL shipping, the first phase in systems integration was between a shipper’s ERP and a TMS. In what is undoubtedly the next generation of FTL integrations, Emerge has set the bar even higher by complementing the many benefits inherent to ERP/TMS connectivity with features that maximize operational flexibility, while allowing shippers to stay on top of market rates. As an FTL market leader, we at Emerge believe that it is precisely this level of collaboration and connectivity that will benefit the entire FTL community!