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  May 4 , 2006 - Supply Chain Digest Newsletter - Logistics Edition
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First Thoughts by Dan Gilmore, Editor

Thinking about TMS


A few developments in the market have got me thinking about the Transportation Management Systems (TMS) market, and how that impacts shippers, at a time when transportation has never been more important and challenging.

The significant consolidation that is occurring in the supply chain software market is hitting the TMS market substantially. Actually, it seems like the history of the TMS market is one of “specialists” in transportation getting purchased by larger software companies needing to fill a transportation gap.

Sorry for a bit of history, but there was another wave of TMS-related acquisitions in the late 1990s, as i2 purchased ITLS, Optum (now part of Click Commerce) purchased Metasys (a move that never worked out) and McHugh (now RedPrairie) purchased Weseley. (There will be a quiz in the morning!)

It’s been happening again. Just last week, one of the current major TMS providers, Manugistics, announced it was being acquire by JDA. That follows Oracle’s acquisition last year of GLOG. A few years back, Manhattan Associates had acquired, SSA purchased Arzoon, and Descartes the same with Centricity.

What’s happening, and should you care? First, the nature of software vendors today is to grow the company to the point where it can be sold and pay off the VCs and the founders – that’s just the way it is. Second, as Adrian Gonzalez, an analyst at ARC Research and friend of SCDigest, told me last week, companies are looking to better integrate transportation processes – and hence TMS capabilities – into their supply chains. That means there is more perceived value in TMS as part of an integrated suite.

“Companies want to develop more integrated logistics processes, and the suite vendors are pitching it that way,” Gonzales told me (see 10 Trends in TMS story in News and Views). “It makes it harder to be a ‘stand-alone’ TMS provider.”

At the same time as this is happening, transportation is in fact viewed as increasingly strategic in the supply chain. Combined with the rising pressures in cost and the capacity shortage, it would seem to put a premium on having strong transportation technology.

Except that a surprising number of companies – even big, great supply chain companies – do not have great capabilities. Gonzalez told me he continues to be “surprised at the number of really big shippers that have pretty mediocre TMS technology.”

Razat Gaurav, VP of i2’s transportation and logistics group, echoed a similar theme in a conversation this week. “We’re working right now with a company with several hundred million dollars in freight spend that really has very little transportation technology,” he told me. Interestingly, he also noted there is also a parallel wave of “second time” purchasers that are taking the technology evaluation down to a very deep level, based on experience.

So, if you are keeping score at home, right now you have a TMS market that looks something like this:

  • WMS/Supply Chain Execution Vendors with TMS: Manhattan, RedPrairie, HighJump, Catalyst, Irista, Descartes
  • Supply Chain Planning: i2, Logility, JDA thru Manugistics  (note: Manhattan is also now in the planning area)
  • ERP Vendors: SAP (homegrown), Oracle (GLOG), SSA (Arzoon)
  • Stand alone TMS (partial list): Lean Logistics, Nistevo, GT Nexus, Shipper’s Commonwealth, Mercury Gate, Best Transport
  • Specialists: Kewill (mostly parcel), and a number of others in areas like routing and scheduling, fleet management, etc.

I’m sure I’ve left someone players out. If that includes your company, let me know.

So, what’s the takeaway?

  • In the midst of all these provider dynamics, there seems, finally, to again be some real action by shippers looking at TMS. If your technology is modest or aging, in this environment it’s time to take a look (see our case study on Goodyear getting TMS “religion”).
  • Many of the “stand alone” providers – and some of the others – focus on an “on-demand” or hosted model. I’d highly recommend comparing a more traditional approach to the on-demand offerings. There’s no right answer (see On-Demand Logistics ), but on-demand sometimes can enable technology acquisition that a shipper couldn’t otherwise get thru the capital appropriation process, so it’s worth a look.
  • You have to consider a bit the vendor’s position – is it likely to be acquired, and if so what would that mean? If recently acquired, what is happening with investment and focus on the product? It will be an educated guess at best, but an exercise worth doing.

Why do so many large companies still have pretty low-end transportation technology? Are market dynamics going to force most to make some changes? Or is the technology not that important? What’s your take on all these software industry developments, and how should a potential buyer think about them?

Let us know your thoughts.

Dan Gilmore


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Q.  What happened on June 26, 1974, in Troy, OH?

A. Click to find the answer below


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Feedback is coming in at a rate greater than we can publish it - thanks for your response.

As we noted last week, we received some fantastice letters on our First Thoughts piece on The Intelligent Supply Chain, which then led to last week's column on "Readers Respond," where we highlighted portions of a few of those letters. We publish a few of those in full below, including our Feedback of the Week, from

Lalit Panda, SVP Supply Chain and IS at Harman Consumer Group. Due to the length of some of the letters, we are only publishing a handful, but they are really good. Take a look. More next week on this topic (and we would love to hear more), and more letters on Delphi, the UAW, and the Supply Chain.


Keep the dialog going! Give us your thoughts on this week's Supply Chain topics. As always, we’ll keep your name anonymous if required.

Feedback of the week - on "The Intelligent Supply Chain":

I usually read your column with interest and your comments on the Intelligent Supply Chain from your notes from 1999 struck me as particularly relevant. Most of what you say rings true from my experience though I am surprised that companies have not able to reduce the bull whip effect with all the investments in Demand Planning and Supply Network Planning systems. Makes you wonder whether software is mostly smoke and mirrors in what it can truly deliver. It may also be possible, as you note some what towards the end that investment in people has not kept pace with technology investments so it may be that there aren’t enough trained experts to manage the demand models. In the final analysis, demand and supply models need interpretation so technology is obviously not the be all and end all of getting the process right. Thoughts I would like to add to your notes are:

I believe there is unexploited potential of significant benefits from linking factory planning to demand signals to reduce the bull whip. While supply network planning is a step in that direction, true integration at BOM level for executing to real time demand changes has been the vision and I believe is still a goal for most companies. The complexity of such an exercise across multi product, multi locational production systems cannot be denied but should certainly show results. Also I think a characteristic of an intelligent supply chain is the intelligent use of intermediaries and the proactive sharing of information that can help increase efficiencies in transportation and logistics, which in theory is no different than integrating with the factories. Most logistics providers do not delve deep into their customers’ process issues to determine whether they can optimize their services to meet the specific challenges a customer faces. We have done some work in that area with carriers which has shown results.

I would like to commend your column and say that its one of the most “intelligent comment chains” in the logistics arena. Do keep it up.

Lalit Panda

SVP Supply Chain and IS

Harman Consumer Group

More on the Intelligent Supply Chain:

Your April 13 article on Intelligent Supply Chains resonated with me and my colleagues at Nulogy probably more than any other that you've written so far.  It was satisfying to see someone sharing our vision of the supply chain, and really from 1999 which is tremendous.

I wrote a lengthy response to your article in my blog ( but as feedback to your ending questions, here are my thoughts based on our research and customer dialogues, and some personal experience building enterprise systems at Microsoft.

What do you think makes an “intelligent supply chain?”

The most important shift that will be required for supply chains to become intelligent is for the people managing them to think more intelligently, and more strategically.  Executive leaders must lift their heads up from the frenetic pace of just getting the job done, and recognize the value they will be able to create once they and their partners and customers have greater operational intelligence.  Once this motivation is clear, smart technology vendors will emerge to create the visibility, event management platforms, and other tools required to bring intelligence to the supply chain.  Right now, customers are still somewhat short-sighted, although they are starting to turn around as the hangover from the heady days of the late nineties wears off. 

Is it just another word for responsive?

Intelligent and responsive are not interchangeable in this context.  An amoeba responds quickly to stimuli, but few would consider it intelligent.  Supply chains are already quite responsive, but the responses are not always optimized, or even correct sometimes--for example the bullwhip effect that you mention still remains.  It is systems and processes which can organize, orchestrate, and even anticipate responses that will systematically eliminate costs, and increase efficiency.  This will evolve our industry from being reactive to proactive.  Once we can be proactive we will be able to claim intelligence--or at least more of it!

What would you add or subtract from this model?

My blog entry enumerates in some detail the technological shifts that will be required to bring an intelligent supply chain to light.  The opinions echo yours to a degree, although the importance of change in customer attitude must not be neglected.

I hope you'll find this feedback as thought provoking and affirming as I found your editorial.  I'm confident that in time more will be awakened to the vision we share because everyone will benefit.

Kevin Wong

Vice President Operations

Nulogy Corporation


In a security conscious world the supply chain should also be intelligent about the involved parties and patterns of behavior in the chain.


James Drogan



Q. What happened on June 26, 1974, in Troy, OH?


A. The first bar code was scanned at a retail check-out counter, at a Marsh’s Supermarket.

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