Using Solutions Only as Needed

July 1, 2009
SaaS allows companies to use slices of solutions rather than buy entire programs.

As the economy continues to present challenges, in looking for solutions, businesses are upgrading infrastructure not only to solve present problems but to emerge from these troubled times with a leading edge. As has been the case for some time, incorporation of technology has helped ease some of the burden for business.

Moving one step ahead, over the past few years, on-demand technology, also called software as a service (SaaS), has increasingly gained favor in delivering enhanced technology cost effectively. Suppliers claim a number of benefits. There is no capital expense to purchase, install and maintain a software solution, since users need only access those portions that fulfill their needs. Generally, access to SaaS applications is through the Web, helping to hold down new equipment purchases. Because providers charge on a per-use basis, users can predict expenses. As upgrades evolve, they are incorporated into the online programming so there is no additional cost for the new features.

Authoring a brief on the use of on-demand services, Adrian Gonzalez, director of the Logistics Executive Council at ARC Advisory Group Inc., notes SaaS has, “largely eliminated the cost and resource constraints companies have traditionally faced in implementing new technology and continuous improvement initiatives.”

In reporting customer success, SmartTurn Inc., a provider of a SaaS inventory and WMS, points to its work with Argent Associates, provider of managed services in warehousing, logistics and product lifecycle management. SmartTurn says that for Argent, its WMS proved itself not only in savings on implementation but in time savings, as well.

The paper-based system Argent had previously used produced an average accuracy of 90%. Results of the automated SmartTurn implementation showed an improvement to 99% accuracy.

SmartTurn quotes the reaction of Ray Moya, Argent COO. “We were able to integrate it with our QuickBooks accounting system, which helps both from a budget and process perspective,” he says. “In addition, we found that paper transactions cost us $73 per transaction, but electronic transactions cost 34 cents, so SmartTurn's SaaS approach delivers additional cost savings.”

A new venture by Fluent Logistics of Charleston, S.C., led it to choose an SaaS solution to integrate its global network of customers, vendors and partners. Fluent Logistics, an international freight forwarder and customhouse broker, discerned a niche in the transportation of bulk liquids.

“They needed to be able to manage all of their modes,” explains Kent Meyer, vice president of sales and marketing at Infoteck Consulting, whose Web Freight Pro (WFP) SaaS was the solution chosen by Fluent.

Third-party supplier Fluent Logistics' business model allows shippers to transload tank truck and rail car shipments to Flexitanks in strategic locations throughout the country. This opens export possibilities for U.S.-based bulk liquid shippers. Since Fluent provides door-to-door transportation services, it needs the technology to link to its partners and agents throughout the world.

Meyer explains that Fluent Logistics has a particular challenge in the management of containers, needing to make sure enough are returned from foreign ports and seeking cargo so they don't all arrive empty. He notes that Web-based WFP SaaS Premium offers all data, documentation and tracking necessary for Fluent to get its work done.

SaaS solutions are not necessarily enterprise-wide. For example, Lingo from eZCom Software Inc. is aimed at helping small and medium businesses reduce the complexities of managing EDI documents within the supply chain. One eZCom customer, Trinity Best, operations manager of Kernel Seasons, claims that its previous provider of EDI service allowed only processing of one document at a time. Use of eZCom has helped the company cut its EDI costs in half.

In the ARC brief regarding on-demand solutions, a conclusion drawn by Gonzalez is that, “smart companies are viewing this economic slowdown as an opportunity to reassess and transform their supply chain strategies and processes. They understand that more change is on the way, and that the processes and solutions that might have been good enough in the past will not be workable or sustainable in the future.”

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