We’ve seen seismic shifts in the global logistics landscape over the past few years, including a transition to omni-channel commerce, increasing demand variability and growing customer expectations. In the age of Amazon, consumers want customized fulfillment and delivery options, with fast service at a low cost. To operate profitably, companies need to carefully orchestrate their logistics operations at every step, across thousands of SKUs, hundreds of thousands of customers, and a distribution network that may span multiple countries.
Perhaps no one has benefitted more from this growing complexity than the world’s logistics service providers (LSPs). They’ve been able to significantly expand their business, as manufacturers and retailers are increasingly outsourcing their logistics tasks — and counting on LSPs to master the complicated business of distributing and transporting their products. Providing turnkey managed services represents an enormous revenue opportunity for LSPs.
While this is great news, it’s also placed pressure on LSPs to quickly get up to speed on advanced logistics software. From transportation management system (TMS) and warehouse management system (WMS) software to labor management, warehouse execution and yard management solutions, today LSPs need to capitalize on digital capabilities to combine high service levels with high margins.
Whether they’re building loads, optimizing routes, picking and packing orders, or otherwise managing customer logistics, LSPs need to work quickly, intelligently and strategically to achieve healthy profits. They need to monitor changing conditions in real time — like freight rates, carrier and warehouse space availability, and order volatility — and always make decisions that balance service and costs. That means ingesting real-time data, performing automated analysis, making optimal decisions and executing them quickly. Digital solutions aren’t optional, they’re imperative.
Implementing advanced technology, launching it quickly, and achieving a fast, sizable return on investment (ROI) has never been more critical for LSPs. But how can they accomplish that?
Understanding the value of a composable journey
A recent LinkedIn Live event, called “How Does a Composable Journey Benefit Logistics Service Providers?”, addressed that question. To Erik Gudas, Blue Yonder’s Corporate Vice President for the Composable Journey Team, a Blue Yonder composable journey begins by looking at each customer’s long-term goals — then creating a plan to generate wins quickly. “As one example, we worked with an LSP that wanted to extend their managed services beyond warehousing and transportation,” explains Eric. “The customer wanted to offer forecasting, inventory optimization and store replenishment as a service, to grow their revenue and operate as a true 4PL, or fourth-party logistics provider.
“In a case like this, the customer isn’t looking for a multi-year, multi-million-dollar engagement that doesn’t deliver an ROI until 2027. They’re looking for extended digital capabilities and new revenues right now,” Eric emphasizes. “That’s the mission behind Blue Yonder’s Composable Journey Team. Our goal is to launch software quickly — via cloud-native microservices and application programming interfaces, or APIs — and generate big returns quickly.
“In this case, we linked new Blue Yonder forecasting functionality directly to the TMS, the WMS and the order management system via robust APIs — because it was critical to tie front-end forecasting to back-end execution. We integrated all software on Blue Yonder Platform so all solutions would be interoperable, sharing the same real-time data and driving synchronized decisions. As a result, the LSP was able to quickly get the new forecasting, inventory optimization and replenishment capabilities up and running. By offering expanded services, they were able to add new customer value and create a new revenue stream, before that opportunity disappeared,” says Eric.
