Published October 5, 2021
Between 1985 and 1995, I had well over 500 discussions trying to help managers and executives understand the need for a warehouse management system (WMS). Companies had all sorts of homegrown “systems” that they believed could perform the functions of a WMS. By the year 2000, most warehouse professionals understood the need for a WMS and these discussions waned.
Between 2005 and 2015, I had well over 500 discussions trying to help managers and executives understand the need for a transportation management system (TMS). Companies had all sorts of homegrown “systems” that they believed could perform the functions of a TMS. By the year 2020, most transportation professionals understood the need for a TMS and these discussions waned.
Now, however, comes 2021 and guess what? There is not one but two very similar discussions that I am having weekly which have evolved from the many paradigm shifts resulting from the turbulence that began in 2020 and still continues today.
The first conversation is with the many logistics professionals who think they can manage the logistics of returns with the same systems they use for outbound logistics. Let me be clear, the need for and value of a returns management system (RMS) in 2021 is identical to the need for and value of a WMS in 1985 and a TMS in 2005.
The second conversation is with the many supply chain professionals who think they can manage a digital supply network (DSN) with the same enterprise systems they use for managing their link of their supply chain. Let me be clear, the need for and value of a DSN in 2021 is identical to the need for and value of a WMS in 1985 and a TMS in 2005.
Just like for many things in 2021, because of the ongoing turbulence in the world today, the pace for the need for innovation is at an all-time high. For logistics and supply chain professionals, this means to immediately grasp the need for and move forward with an RMS and a DSN now.
What is an RMS?
An RMS is a technology that starts with a customer indication that they want to return a product and ends with the product being returned and a settlement completed. RMS solutions support the management of the end-to-end process of returns for B2C, B2B and in-store customers.
Why is an RMS Needed?
Often today returns processing is inefficient, slow and frustrating. Returns processing is often a manual and reactive process and has a low seller priority, but a huge level of customer dissatisfaction. It is not unusual for the returns process to lack visibility about returns and have a lack of quality metrics about returns performance.
What is the Value Proposition for an RMS?
The four key value propositions of an RMS are:
- Reduce the costs and increase the efficiency of returns processing
- Increase customer satisfaction and communications
- Increase speed of return to stock and value capture
- Seamless end-to-end digital returns process with enhanced visibility and performance reporting
What is a DSN?
A DSN is a technology that is different from the traditional supply chain where each node of the supply chain is connected in a linear point-to-point connection of a chain. In a DSN, all nodes of the network are connected to all other nodes. A supply chain is a chain whereas a DSN is a network. All information in a DSN is real time, available to all and thus the network is totally transparent with all participants having a single version of the truth.
Why is a DSN Needed?
Traditional supply chains work well for simple supply chains in times of business as usual, or steady state operations. However, as supply chains have grown globally, the complexity and length have made it difficult to accomplish the goal of synchronizing supply to demand at the lowest cost. In addition, starting in 2018 and then with the rapid escalation of COVID-19 through 2021, the level of volatility, uncertainty, complexity and ambiguity (VUCA) stemming from disruptions caused traditional supply chains to fail, resulting in huge budget overruns and very poor customer satisfaction. Moving forward, ongoing disruptions is the new normal and only with a DSN can order and cost control be returned to the network and enable companies to satisfy customer demands.
What is the Value Proposition of a DSN?
The seven key value propositions of a DSN are:
- Reductions in
- Transportation costs
- Expediting costs
- Supply chain overhead costs
- Increases in
- Inventory turns
- On-time shipments
- Customer service levels
The need for advanced RMS and DSN solutions will only continue to grow. Contact Tompkins Solutions today to learn how to build a more resilient supply chain in the face of disruption.