The third installment in our MH&L Roundtable Series focuses on why, with the increasing complexity of commerce, we still need to master logistics basics.
MILLER: I am expecting to see growth in big data from a decision support perspective, especially with omnichannel and online commerce. If you look at the shipping costs being incurred right now, for example online consumers ordering ten garments and returning five, or store personnel deciding to bring in an out-of-stock product from another location on a firm's network, the potential for firms to experience unplanned, high freight expense is significant. Visibility has expanded and this presents greater fulfillment opportunities and options, which is great, but what I don't see is much about decision support; strategically looking at what are and are not reasonable shipments in terms of cost. What's my shipping priority? What am I willing and not willing to do for the consumer?
ANDEL: Tan, last year you said, "Go into a lot of very good companies, and you will find an incredible amount of junk in their databases."
MILLER: I think things are getting much better because cloud technology is making good database and related software capabilities available to many more firms, but if you look at the guts of the data warehouse systems of many firms, there is still a lot of junk out there.
TOMPKINS: We're seeing this with the move to dimensional pricing by the carriers. Shippers have junk in their database, including the wrong cube information, the wrong product sizes, so we don't know how big the products are. Oftentimes, it is recorded as 1 by 1 by 1 as a default. That's why you will get something that is three times the size of this pen coming in a box that is 3 feet by 3 feet by 2 feet because it hasn't mattered, but now all of a sudden it does matter because UPS and FedEx are concerned about how many dollars they have on the truck. It is not weight; it is cube. It is the dimension that is killing some shippers. But when you look at how we create a wave, we are going to need to decide which items go in which boxes before we create the wave. This will change how companies do packing and picking, and most of these companies are going to get dim pricing thrown out because it is inefficient.
ANDEL: Ann, how do 3PLs manage issues like this as they ship products for their customers?
CHRISTOPHER: Many years ago some said if someone could find the perfect WMS they would be a multi-multi-billionaire because there isn't one out there that's going to meet the need of all providers. We are having challenges because some of our customers may want us to do an integration using a major WMS brand and there is a significant cost associated with that. We will put some skin in the game, but the client has to put some skin in the game as well—with a longer contract.