Logistics and its systems - from TMS to MCN and AX4
The problem: one example among many
Does this situation sound familiar? I have some production lines in my factory that are critical in supply or are simply too expensive for me to afford to stop them. My analyst, Wilson, tells me that there is a risk of a stoppage due to lack of material. We check the ERP and there's a Purchase Order that was generated and accepted by the supplier 15 days ago and is due to arrive today. It's supposed to be perfect and not stop my factory. But the risk is too great, I need to know if the cargo is on the road and I ask Wilson to check his emails with the supplier (he follows up regularly with suppliers) to see what the latest update was. After a few minutes he tells me: "Three days ago it was in the final operation before packing!". Gee, that's no good. We decided to call the supplier and, after 3 attempts and 30 minutes on hold, we found out that there had indeed been a delay and the cargo is leaving today and will arrive here tomorrow. Now I have to reschedule the factory with other products to try not to stop it. And hope that transportation goes smoothly.
This story is a small sample of the day-to-day life of most industries which, working in a disintegrated way with their supply chain, lose agility and precision in decision-making, generating impacts on service levels and efficiency, which damage costs and revenues, as well as generating immense stress in operations, wasting a lot of time to get basic information.
MCN, TMS and the Control Tower with AX4
This type of problem gave rise to the concept of Multi-enterprise Collaboration Networks (MCN). According to Gartner, MCNs are solutions that support a community of business partners of any level and type who need to coordinate and execute business processes that span several companies. Gartner considers cloud-based MCNs an essential technology for coordinating, orchestrating and automating an organization's extended supply chain within the overall business ecosystem in which they operate. The main features of MCN solutions include three layers: network representation and management, application functions, integration, analysis and intelligence.
AX4 logistics management software from the Siemens Digital Logistics (SDL) portfolio is an MCN, enabling collaboration between industry, its suppliers and carriers through workflows designed to automate and optimize logistics processes between the different stakeholders. For example, you can define via the system what actions are required after your supplier's cargo has been invoiced, what notification will take place and to whom, as well as defining a flow of actions for exceptions, such as a loss or damage to a shipment. Users are connected to the platform on their desktops, but also on their mobile apps, to make it easier for carriers to update their shipments.
In addition to these business-to-business functions, AX4 is a transportation management software, also meeting the requirements of a traditional TMS (Transportation Management System) software which, according to Gartner again, is a category of systems designed to manage increasing levels of transportation complexity in various modes of transport and geographical regions. The Siemens solution performs inbound and outbound transportation management functions, manages freight tables, purchasing flows and even collaborative dock scheduling. But the icing on the cake is that AX4 is also integrated with Opcenter APS, which means that any update to a transportation forecast is automatically reflected in the availability of materials in a factory schedule made by PPCP. Here you can find an article comparing AX4 and TMS software.
In short, it enables a company's Logistics Control Tower and, because it features the traditional execution of a TMS with the chain collaboration of an MCN on a 100% cloud platform, AX4 becomes an extremely differentiated logistics technology.
But what results can we expect?
When we talk about AX4, we are referring to a solution with more than 20 years of experience, a user base of more than 600,000 and more than 50,000 daily transports managed. Companies that adhere to a platform of this level have an impact on their status quo in many ways, such as:
A more resilient logistics chain: Through the visibility and collaboration provided, which allow the flow of work and information between the different stakeholders in the production chain to occur in an agile, unified and therefore reliable manner.
Cost reduction: if the information is available in advance (remember our story from the beginning), we avoid misusing our assets, paying fines for delays, extra fees for trucks in the yard because shipments are poorly organized, freight costs that are inconsistent with contracts, and so on;
Risk mitigation: in today's global environment with trends so acute that they have earned a nickname, the so-called VUCA (volatility, uncertainty, complexity and ambiguity), being prepared for the most diverse situations that your production chain can be subjected to (wars, strikes, weather disasters, accidents, among others) means mitigating risks that can unexpectedly generate stratospheric costs. After the problem, the medicine can be very expensive and bitter. That's why your operation's ability to react quickly and assertively with the help of technology is crucial.
Digital Transformation: more than a jargon, it is a change in the way your operation works, eliminating extremely manual activities and transforming mechanical work into analytical work. In addition, this movement brings about a structural change in the relationship between companies, from paving the way for the development of better partnerships between them to reducing the costs of various interfaces between different systems based on the simplification of a unified system for common use. Finally, AX4 enables companies to rely on real (and voluminous!) data to improve their management, because let's face it, analyst Wilson's inbox or his spreadsheet don't transform the way we work with data.
Of course, not all of these impacts are ends, some are means. However, these means of getting where we want to go will soon be imperative for anyone who wants to remain competitive. Simply put, anyone who doesn't know and develop their operation well through good use of data or doesn't adapt to the new sustainability regulations will be out of the game. And since we know that in the industry nothing happens overnight, it's a good idea to go to sleep thinking about this as soon as possible.
Do you need technical advice on how to implement this logistics technology in your industry? Talk to NEO and one of our specialized consultants will contact you to show you the way.