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A Shipper’s “Buy-Only” ERP vs. an LSP–specific “Buy–Sell” Solution

Guest contributor is Naval Sabharwal, Global Head – Logistics & Supply Chain, Ramco Systems. Ramco Systems focuses on providing innovative business solutions that can be delivered quickly and cost-effectively in complex environments.

Logistics world is made up of two essential operations – buying and selling. While buying is the only essential functionality in a shipper’s world –  for now, both buying and selling define the logistics service provider’s (LSP’s) operations and they are important factors that every LSP needs to consider when choosing a software solution to support their business. Let’s take quick look.

The Evolution of Logistics Solutions

Decades ago when logistics operations were still managed in-house and the capital deployed for the same was viewed as integral necessities, the primary activity of logistics software solution, a new kid in the block back then, was considered to be logistics planning with the available resources and buying additional logistics capacity when there was excessive demand. By virtue of it, the logistics solutions developed back then were shipper focused and “Buy” heavy. However as the supply chain concept evolved with the proliferation of LSP as a major industry, the outsourcing of logistics function was increasingly seen as a key optimization avenue for shippers to achieve both cost and value advantages. The globalization phenomenon and the disappearance of trade barriers that followed further expanded the role of LSPs and redefined the success of any business as how well they managed their supply chain. This effectively meant that the competition was not between companies any longer but between supply chains they are part of. This situation has resulted in LSPs being considered as strategic partners –a major shift from the hitherto arm’s length approach, as they possessed the “Know-How” and “Know-Who” to manage the supply chain operations spanning multiple countries effectively and efficiently. While this is a happy challenge to have, the LSPs found that they would have to work in tandem with partners and subcontractors globally if they were to meet the ever challenging supply chain needs of their customers and this calls for a sophisticated IT solution which would help them to find the right partners, sustain their margin by balancing their buying and selling, plan their resources optimally and prevent revenue leakages as their operations move outside their walls by providing a wide range of visibility. For this, can they afford to look at the Logistic Solutions that were originally intended for Shippers and Buy Heavy?.

Notwithstanding the add-on, plug-in and bolt-on that were added to those solutions to cultivate the “Sell” function in them and balance it with their inherent “Buy” function, they are likely to face serious competition and be a step behind from indigenous solutions that were designed and developed for LSPs.

At this juncture, it is important to highlight, for the sake of certain section of readers, as to why there is so much emphasis on achieving the proficiency and balance in Buy and Sell operations – Many of the LSPs, especially the Freight Forwarders, buy the logistics services or capacities in advance and their ability to buy it at the right cost and sell it at the best price possible determines their profitability. Given the wide range of suppliers and services in market place, it requires a software solution with an excellent Rating engine which will guide them do it.

The Complete Logistics Solution for the Modern LSP

What the current-day LSPs require is a comprehensive logistics solution that gives equal weightage to both buy and sell capabilities to arrive at the ideal equation that will deliver optimal benefit to the LSPs. This ability, coupled with future-ready capabilities such as real time visibility across the supply chain, mobility, technology agnostic integration make the logistics solution the perfect solution. But to deliver these expectations, a technology provider has to focus on LSPs & not force fit a shipper solution.

With a great service experience, cost savings, and smart margins, the new-age logistics solutions are indeed way ahead of their legacy shipper-ERP counterparts in delivering excellence.

So, think about it – do you still want to place all your trust and investments on legacy solutions sculpted after a shipper’s ERP? We know that your answer is No!

Ramco’s end-to-end logistics solution, made exclusively for LSPs, will meet your expectations from a perfect logistics solution. With a single-fabric solution it covers the end to end needs of LSPs from WMS, TMS, Fleet Mgmt., Rating, and Order Mgmt. to HR & Finance.