SaaS TMS from an Electronics Manufacturer?

Would you order a cheeseburger at your local Chinese restaurant?  Probably not.  The Wall Street Journal reports electronics makers like Jabil Circuit Inc., a key supplier of components to Apple, and Flextronics International are among a recent spate of electronics manufacturers entering the supply chain software business.  There are enough critical considerations to weigh when choosing between providers with a historical background in supply chain automation.  Why would anyone further complicate things by buying logistics software from a provider with roots so far removed from supply chain logistics?

At first blush, it seems to make sense.  After all, electronics manufacturers are well-acquainted with managing complex supply chains in their operations.  But that is where the similarity ends.  Just because an electronics manufacturer has experience managing its own complex supply chain, we shouldn’t expect them to understand the very different challenges and business requirements facing a food shipper and the cold chain.  Nor do we expect them to understand the specific pains experienced by retail shippers managing inbound freight from thousands of vendors and the influence of seasonality.

One of the key benefits of engaging a reputable SaaS TMS provider is the unmatched expertise these providers bring to the enormous task of automating supply chains.  The technology is only one facet of this task.  The real value lies in the experience these experts have earned during hundreds of unique implementations for organizations across numerous industries.  There is no substitute for real-world experience in meeting and overcoming industry-specific supply chain challenges.

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Just because a Chinese restaurant has a broiler and cooks in the kitchen doesn’t mean they can whip up the all-American cheeseburger deluxe.   Similarly, just because an electronics manufacturer manages its own complex supply chains doesn’t make it a supply chain solution expert.

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Jabil execs cite the low margins in the electronics business as the primary reason for making a move into SaaS software which, as an industry, enjoys much higher margins.  It’s hard enough to find a solution provider with your best interests at heart.  Clearly, helping a manufacturer improve its margins at your expense isn’t likely the greatest motivator.   Even among providers native to the transportation logistics space, you may not be a top priority customer.

If you’re using the largest TMS solution providers and you’re not a Fortune 50 company, you’re a blip on their radar and not likely to get the best, most-responsive service.

If you’re using any of the TMS providers recently involved in merger & acquisition activity, your provider is preoccupied with operational and organizational challenges and not focused 100% on your needs.

If you’re considering one of the many new, venture capital funded entrants to the field, you’re looking at solutions a mile wide but only inches deep.

If you’re not a 3PL, TMS providers focused on the 3PL market aren’t stretching to serve your unique needs as a shipper.

What you should be looking for in a SaaS TMS solution is a provider not so enormous they won’t afford you some level of input into their product development roadmap.  Look for a SaaS TMS provider with years of proven success, and one that is built since inception in the cloud (i.e. not a web-enabled pretender).   Seek solutions designed expressly for high volume shippers like you; not brokers!

Just because a Chinese restaurant has a broiler and cooks in the kitchen doesn’t mean they can whip up the all-American cheeseburger deluxe.   Similarly, just because an electronics manufacturer manages its own complex supply chains doesn’t make it a supply chain solution expert.

 

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