April 2010 | Commentary | Checking In

Transformative Technology

Tags: Logistics I.T.

Felecia Stratton is the editor of Inbound Logistics magazine.

Yes, technology continues to transform transportation. But your demands also transform those providing technology to you. For example, JDA Software's acquisition of i2 Technologies in January 2010, and their shared roadmap for future integration, serve as a telling bellwether for the logistics technology industry and its customers. From a macro perspective, consolidation among IT companies has been rampant. Before the JDA/i2 juggernaut, Servigistics and Click Commerce joined forces. More recently, Logility acquired Optiant.

In a down economy, contraction is often necessary as some businesses seek anchorage and others look to anchor their position in a soft market. Aligning and integrating complementary business units and technologies, as JDA and i2 have endeavored, builds and optimizes value.

Within the supply chain there is a similar progression—and logistics technology is the enabler that brings supply and demand together. Functional integration materializes in countless ways and the impulses are equally flux. There is wasted effort and redundancy between corporate and value chain partners that perform the same tasks independently, rather than collaboratively; there is time and cost caught in the backwaters between an organization's functional silos; and there are new business partners and customers that need to be plugged in.

Logistics technology companies responding to Inbound Logistics' annual Top 100 Logistics IT Providers survey indicate as much, as you'll see in our TrendTracker item. Sixty-five percent of respondents identify integration as a challenge for their customers. Cost, customer service, and visibility register as higher priorities among shippers, but problems in these areas are largely the result of siloed decision-making and poor integration. As a force equalizer, logistics technology allows businesses to tear apart functional barriers and build more synergistic supply chains that pull to demand.

The need for supply chain integration is also derivative of the arc that technology developers have followed—at their customers' lead. Solutions are more scalable, modular, and function-specific, creating additional strands of connectivity that need to be threaded together with nuts and bolts systems, then tightened. Given the complexity of expanding supply lines and the stratification of third-party partnerships, effectively aggregating and communicating information across disparate areas is a competitive differentiator.

It's also a defining theme in our annual Logistics IT issue. At our readers' lead, we have put together a fully integrated editorial lineup that embraces different perspectives of the logistics technology space. From anecdotal best practices and exclusive market research to our 12th annual Top 100 Logistics IT Providers list, we present a top-down, inside and out look at how technology trends and companies are transforming today's supply chains.