In a somewhat surprising move, Walmart’s Commerce Technologies unit announced last week that it was making its in-house developed Transportation Management System (TMS) available to the general marketplace of shippers.
Supply Chain Digest Says...
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| The track record of regular companies entering the supply chain software market is not a good one, as technology is just a very different business from retailing, distribution and manufacturing. |
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This release could ultimately impact the TMS market itself, especially for the thousands of companies that are vendors to Walmart.
As announced in a blog post late last week, Walmart said that it was making its AI-powered logistics technology, called Route Optimization, available to all businesses as a Software-as-a-Service (SaaS) solution through Walmart Commerce Technologies.
Walmart says the new TMS is targeted to businesses of all sizes and provides functionality to optimize driving routes, load trailers efficiently and minimize miles traveled.
The retail giant claims that the TMS will provide shippers the same functionality it is using internally, which it says has enabled Walmart avoided 94 million pounds of CO2 by eliminating 30 million unnecessary miles driven through use of routing optimization. That saves Walmart a lot of money as well.
Walmart won the Franz Edelman Award in 2023 for building and deploying this technology at scale in-house.
Walmart calls out the following key capabilities of its new TMS:
Better planning for multi-stop truckloads, with AI-driven automated route mapping that considers factors such as time, location, and store delivery windows.
Packing trailers in the most efficient way possible, which not only maximizes trailer utilization but also helps to ensure temperature-controlled items stay fresh.
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Ensuring stores receive deliveries on time, regardless of external variables, by leveraging weather and traffic patterns and quickly pivoting as needed.
Strategically planning inventory pickup (backhauls) on return trips from deliveries to ensure trailers are never empty, ensuring efficiency and a greener footprint.
Providing at-a-glance insights such as trailer usage, trip time and distance traveled without cargo (deadheading) to help operations management teams make faster, more informed decisions.
The track record of regular companies entering the supply chain software market is not a good one, as technology is just a very different business from retailing, distribution and manufacturing. Nearly all attempts at such a strategy having failed, dating back decades.
As just one example, for awhile in the mid-1990s, AT&T was marketing its in-house developed Warehouse Management System (WMS) for a few years, but ultimately the effort failed. This is one of a number of similar stories.
However, Walmart claims a proof point, noting in its blog that “Route Optimization is Walmart’s second turnkey, white-label solution, joining Store Assist, a SaaS technology that provides local fulfillment including shipping, pickup and delivery.”
That seems a much different type of software than full TMS.
SCDigest also notes Amazon’s AWS web services unit has recently released several supply chain planning applications, notably for forecasting (See Amazon Web Services Unit AWS Launches Demand Planning Solution that Incorporates Demand Drivers.)
Notes SCDigest editor Dan Gilmore, “This is an interesting move for sure, and could be a threat to existing TMS providers, especially in the mid-market and with Walmart vendors. But if it turns out be successful, you would have to anticipate a spin out of the business at some point.”
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