Digital supply chain: Cloud-based software: Speed and efficiency with SaaS
We’ve all been there – you buy something cool on the net and can’t wait to receive it. And sometimes the wait can seem long. But behind the scenes, it’s quite possible that dozens of actors are working together as smoothly as the cogs of a wheel to deliver your product. The wheel is likely to be oiled by smart software.
The way they’re likely to be doing that is with ingenious software that interlinks the retailer, their warehouse, the transporter(s), the end customers, and all of these companies’ backend systems. These are likely to include order management systems (OMS), warehouse management systems (WMS) and transport management systems (TMS).
Interlinking management systems
These systems have existed in various guises for a long time. But what’s newer today is the way they are flexibly interlinked using a software-as-a-service (SaaS) platform. SaaS involves customers “renting” the software on a subscription basis rather than installing it themselves in their companies. Based on the cloud, these platforms make it far easier for multiple e-tailers, transporters and others to link up with each other. They can automate multiple processes, accelerating and streamlining the supply chain. And the platform enables this regardless of the backend systems each firm in the chain is using.
Step by step from customer click to delivery
Let’s take an example. A customer decides to buy a tablet from an e-tailer. The order is registered by the OMS once the customer has paid for the product. Incidentally, the OMS can be connected to any channel, centralising the orders from all sources. The OMS triggers an alert to the WMS system so that a worker (or robot) can pick the tablet off the shelf and update the stock level in real time. It is then sent on to the packing station, which is ready to receive it and use the appropriate packaging for the tablet (box size, bubble wrap etc). It also prepares the package label and the return slip to go inside the box. The next stage is to select the right transporter for the customer’s location. The product is shipped, the customer receives the tracking code and subsequently the hot new tablet they have been waiting for. If the customer returns the product, each step is tracked in the same way.
Win-win for all involved
The advantages for each of the actors are clear. E-tailers benefit from higher customer satisfaction due to fast and efficient order fulfilment. They also have a centralised overview of orders across all their channels – and that’s very useful for smaller businesses and those selling on multiple marketplaces, such as Etsy and Amazon, as well as in bricks-and-mortar shops.
These platforms can also offer faster turnaround and cost savings for distribution and fulfilment centres as they have all the data they need in real time. Marketplaces appreciate these overarching SaaS platforms for streamlining processes as well as helping them reach new customers. Expanding the customer base and reaching new market segments is also a benefit for transporters.
One example of this type of SaaS platform is ShippingBo, a start-up based in Toulouse (France). The system is connected to well-known logistics companies such as Hermes and provides integrated OMS, WMS and TMS functions as well as the ability for companies to link up their own order and logistics management systems to the service. Companies can send out packages from their e-commerce site with automatic label printing, tracking notifications and other functions.
The pandemic in 2020-21 already boosted growth in the SaaS-based SCM market with many more people shopping online from home. However, its expansion is set to continue over the next few years, with MarketResearch.com predicting 18% compound annual growth rate (CAGR) by 2024 and IMARC Group forecasting 16% CAGR by 2027. And no wonder, when every step of the supply chain can run smoothly.