One Federated Network
This week One Network announced a major new capability, a multi-party network for global logistics, called Global Logistics Gateway. This is a very significant announcement in the supply chain market. A little history will show why.
In the 1990s we saw the emergence of Supply Chain suites. And many companies purchased them to provide deep functional expertise in each department in supply chain, and, for a few ambitious companies, to support cross-functional processes. We also learned, through the emergence of constraint-based algorithms, that we could provide a more holistic solution to supply chain challenges — material and capacity in one solution — or inventory optimization across multiple nodes in the supply chain. Transportation software, with depth, was a mere glimmer in the eyes of a few entrepreneurs in the technology community.
Along comes the web, and new opportunities for inter-enterprise collaboration emerge. In one way we took a step forward — connectivity and better communications with trading partners — but in another way, a step back, since all these new portals, networks and cloud solutions were single-function based — procurement, demand collaboration, transportation, ecommerce portals, and so on.
Over the decades these cloud solutions have grown, merged, have been acquired or went public, generating more funds for development. But fundamental problems still remained.1
Today, most end-users want richer clouds that provide more collaborative connections between trading partners. And they want that elusive visibility, which can’t be solved by functional stovepipe systems, even if they are in the cloud. For example, if you are sourcing from one (or many) countries, and then moving product through several warehouses, 3PLs, multi-modes of carriers — from truck, ocean, drayage, rail, and truck again — you need a multi-party solution that encompasses the many process tasks and data to make that all happen while maintaining visibility throughout the journey.
Demand through Delivery
The launch of One Network’s logistics network is a hugely ambitious endeavor. One Network already has a federated network, which they call the value network. Unlike some networks, this is a hub-to-hub network (vs. hub and spoke). That is, each member of the network is seen as central, with their own rules on how they want to participate and trade, vs. a portal-type approach which sees the hub (usually a big OEM or retailer) as the dominator in its relationships, with others as subservient. The latter approach limits the value of the network. In fact, many suppliers, freight forwarders and carriers are powerful companies with their own rich networks.
Today, One Network’s value network supports industries such as grocery, automotive and defense. This network has focused on the issues of demand-driven fulfillment. That is, rationalizing demand through the supply and carrier network to create cross-enterprise intelligent orchestration.
The Global Logistics Gateway now takes the next step. It is a transportation-focused network that serves both carriers and shippers (and their envoys — 4PL or Freight Forwarders) providing TM functionality (such as carrier selection and bookings, or connecting to major TMS networks) while maintaining visibility through multi-modes, door-to-door. To do this, the network has to have not just domestic carriers and connections to a few key ocean carriers, but a global carrier network. And that is what One Network is pursuing, building relationships in each geographical location. Their goal is to provide value to all network constituents, not just the shippers. Part of their technology approach also allows them, if needed, to embrace other commercial or private networks if the shipper or carrier does not use One Network as their sole platform, creating a demand-thru-delivery optimized flow.
Conclusion: A Huge Thought
One Network already has customers using their logistics network and will aggressively pursue bringing more shippers and carriers onboard. A truly ambitious enterprise. But isn’t this what we need? What good is a demand plan without an executable delivery fulfillment plan? What good is a plan without the ability to manage the incremental changes and events that occur between the moment of demand and the time that the product is in hand?
The competitive stakes have changed for shippers over the last few years with customer expectations mounting. Logistics is not an afterthought, but a core, essential part of the brand. Thus, bolder solutions are required. These are big thoughts: how do you embrace a multi-enterprise supply chain and ensure that all the moving parts to the smallest, but critical, details are understood? It requires that the customer, supplier, carriers and intermediaries be able to work in one network developing terms and rules to trade and manage collaborative processes together; and subsequently, have ability to perform a series of cascading decisions: sensing demand, collaborating with suppliers, selecting carriers, and then optimizing — in the network — to create optimized multi-party execution, daily, hourly, and by the minute.
The logistics market is moving by the minute as well, with billions of dollars in investments and acquisitions weekly (see article in this publication on Descartes), and huge financing deals (Blackstone’s $570M financing of JDA and, now, BluJay receiving $500M financing from TPG Specialty Lending, and BlueBay Asset Management’s Private Debt Group). The market is exciting and yet a little frightening with so much debt in the supply chain market. However, so far One Network has self-financed their growth, and that makes them unique. So the race for bigger, bolder logistics networks is on. And in all competition there are always surprises and emerging champions. For the supply chain community, this race is surely one to watch.
1 There are important architecture differences in the various multi-party supply chain and/or logistics solutions in the market, but that is a deep topic for another time. — Return to article text above
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