Enhancing the Efficiency and Sustainability of Global Supply Chains with Descartes

⇨ Companies need to embrace innovative, technologically advanced tools and solutions to support and enhance their supply chain operations.

⇨ While SAP provides a comprehensive suite of transportation management offerings, it does not address all organizational needs, creating a niche that Descartes fills.

⇨ Descartes Systems Group specializes in serving businesses with a heavy reliance on logistics as their solutions and services are designed to not only complement but also enhance the SAP solution stack, making them particularly beneficial for businesses that extensively utilize SAP's offerings.

In today’s highly competitive and challenge-laden business landscape where customer demands are escalating, resource shortages are common, and economic pressures are intense, it is crucial for organizations to efficiently manage their supply chains. This entails a comprehensive approach that encompasses efficient delivery services, enhanced customer experience, fleet optimization, rigorous cost control, and boosting the performance of both drivers and vehicles.

Simultaneously, companies need to embrace innovative, technologically advanced tools and solutions to support and enhance their supply chain operations. By leveraging cutting-edge technologies for real-time tracking and seamless communication, organizations can prioritize customer satisfaction and enable better delivery choices and transparency.

Descartes Systems Group is a software-as-a-service (SaaS) company specializing in transportation and logistics solutions. The core focus of the company is on the movement of goods, along with communication and data management in the transportation and logistics sector. The company has six key pillars, all built upon their Global Logistics Network (GLN) that facilitates connectivity and messaging with partners, carriers, regulatory agencies, and governments for purposes like booking, status updates, and customs documentation. The pillars include:

Fleet & last-mile solutions: Comprised of routing, mobile, and telematics solutions. These services cater to private and dedicated fleet planning, dispatch, safety, and compliance, aiming to improve customer service, cost savings, and optimizing routes.

Transportation management: Supports customers in managing various modes of transport across different geographies, including truckload, LTL, ocean, air, rail, and parcel services, under the global TMS system. This includes contract management, routing guides, messaging, tendering, and real-time visibility through Descartes MacroPoint.

E-commerce solutions: Descartes addresses e-commerce needs that extend into warehouse management, including pick, pack, and ship applications, and provides turnkey solutions for parcel shipping. The offerings cater to both smaller e-commerce storefronts and larger shippers requiring multi-mode management  with improved inventory control.

Global trade intelligence: The company specializes in cargo freight tracking and intelligence, providing insights into global trade trends, which are often featured in major publications. This service is valuable for business development, market analysis, and monitoring shifts in trade patterns.

Broker-forward enterprise: Targeting freight forwarders, this pillar focuses on optimizing business operations in global trade and freight, distinct from the transportation management solutions.

Customs and compliance: The company offers standalone services for customs and compliance, ensuring clients are up to date with regulations and avoiding dealings with prohibited entities. This is also integrated into other systems for comprehensive coverage.

Growing portfolio of solutions

While SAP provides a comprehensive suite of transportation management offerings, it does not address all organizational needs, creating a niche that Descartes fills. Descartes Systems Group specializes in serving businesses with a heavy reliance on logistics. Their solutions and services are designed to not only complement but also enhance the SAP solution stack, making them particularly beneficial for businesses that extensively utilize SAP’s offerings.
Descartes stands out for its extensive range of all-encompassing solutions in logistics and transportation management. As Mike Hane, Product Marketing, Descartes Systems Group says, “In the messaging space, we boast an unparalleled breadth of partners and global reach. Our real-time visibility solutions stand out for their compliance rates. We often surpass competitors in tracking efficiency, offering features like carrier self-service on-boarding for ELD device connection and dedicated customer success support for accelerated time to value. In the TMS domain, our solutions are modular and tailored to specific needs, whether for a broker or a shipper, offering varied functionalities rather than a one-size-fits-all approach. Being a stable, profitable public company, we continuously invest in R&D, ensuring long-term partnerships and innovation leadership in the logistics and transportation space.”

The company’s comprehensive offerings provide the following benefits:

Real-Time Visibility: In SAP TM (Transportation Management), one does not get real-time visibility, which is crucial in modern logistics. Descartes MacroPoint provides clients using SAP TM with the much-needed real-time tracking of their shipments’ status and location with predictive ETAs and alerts for at-risk shipments.

Messaging and E-Booking: The company also offers an SAP-endorsed app for ocean shipment e-booking. This app, integrated into the SAP Business Network for logistics, enables direct booking and confirmation with ocean carriers through SAP TM. This also includes handling various shipment messages and instructions, working in tandem with MacroPoint for data and updates.

Global Logistics Network (GLN) and Compliance: The GLN facilitates customs documentation and various other messaging needs for SAP customers, accommodating both traditional EDI formats and newer APIs. Additionally, services like denied party screening ensure SAP users stay in compliance with government regulations.

Descartes TMS: For companies not using SAP TM, Descartes offers its own TMS system. This is particularly relevant for businesses using SAP for backend operations, category management, or inventory, but seeking alternative solutions for freight movement.

Hane continues, “Our client base spans across small, medium, and large businesses. The scalability of our solutions makes us accessible to companies of varying sizes, as our services are modular. This means a client may opt for specific services like documentation or messaging, or they can utilize our comprehensive suite of Global Transportation Management (TM) solutions. Our aim is to assist these businesses in elevating their logistics planning and enhancing collaboration with their partners, regardless of the size or complexity of their needs.”

Case in point – Steelcase

Steelcase, a leading supplier of architecture, furniture, and technology products and services, operating a multifaceted distribution and logistics network across the U.S. and Mexico, encountered transportation challenges within its network. The company’s reliance on in-house manual processes and carrier-provided status updates resulted in inefficiencies, delayed deliveries, expensive chargebacks, and diminished customer service quality.

Aiming to enhance customer experience by speeding up response times, Steelcase wanted a real-time freight visibility solution that could boost efficiency, communications, and simplify interactions among the various entities involved in its logistics network. Steelcase adopted Descartes MacroPoint™ to improve shipment tracking throughout its U.S. distribution network and seamlessly integrated with SAP Transportation Management (TM), which led to significant enhancements in tracking efficiency, boosted productivity, and improved customer service through real-time updates and quicker response times.

Hane says, “By implementing our solution, Steelcase successfully reduced their labor efforts in tracking by 50%. This efficiency boost came from receiving automated status updates and identifying at-risk loads without the need for time-consuming phone calls.

Another client, Blue Diamond Growers, utilizes our Descartes eBookings for Ocean Shipment Management solution alongside SAP TM and the Business Network. This integration allows them to seamlessly transmit booking requests to ocean carriers through our system, enhancing their logistics efficiency.”

Strategic Investments

Descartes demonstrates a commitment to strategic innovation aimed at enhancing the capabilities of its solutions. Central to these efforts is the continuous refinement of the user interface, designed to improve the end-customer experience by making it more intuitive and efficient. Recognizing the critical importance of information security, especially as a public company, Descartes regularly enlists third-party experts for penetration testing and consistently fortifies its data security measures.

A notable area of investment is also the integration of machine learning and artificial intelligence into their services. An example of this is the development of AI algorithms to enhance the accuracy of stop times in load planning. By analyzing extensive tracking data, these algorithms provide precise stop times tailored to different locations and product types. Additionally, Descartes is enhancing AI capabilities to detect and warn about visibility fraud showcasing Descartes’ innovative integration of AI into its business processes. In addition to these technological advancements, Descartes is also expanding its carrier connections and partner networks. This expansion is crucial for enhancing the range and effectiveness of their services, offering more comprehensive solutions to their clients. Equally important is their attention to compliance and regulatory updates, such as the impending changes in Canadian customs regulations, ensuring they stay ahead in critical compliance areas.

With the concept of supply chain resilience becoming increasingly important, the company strives to assist logistics-intensive companies in strengthening their resilience, enabling them to adapt and anticipate disruptions effectively. To execute a resilient supply chain effectively  involves more than just providing technology for alerts and real-time updates. For example, if a blockade occurs, companies need to have contingency plans already in place, contracts with back-up suppliers and carriers, etc. Put more simply, if a business relies on a single source for a critical inbound component, their alerts will have limited impact unless they have alternative sourcing strategies.

Hane continues, “It is crucial for companies to design their networks with potential choke points in mind and establish resilient plans with alternative routes and sources. Descartes technology can facilitate this, but it is also dependent on the company’s readiness to adapt and respond to these disruptions. This proactive planning is essential because simply receiving an alert about a delay is insufficient if there is no viable alternative path or backup plan in case of major setbacks like an ocean carrier going out of business.”

Overall, the strategic investments reflect the company’s commitment to addressing the dynamic needs of their customers that are facing global supply chain challenges. Hane asserts, “The primary challenge we face is keeping pace with the constant disruptions in the global supply chain, such as the Suez Canal blockage, the Russia-Ukraine war, and other unforeseen events. Our focus is on continually enhancing our solutions to provide customers with the visibility and planning capabilities they need, rather than making decisions based on uncertainty.”

What it means for SAPinsiders

Understand the current operations: The initial step is to gain a deep understanding of the existing operations, including people, processes, and technology. Many companies operate based on inertia without fully grasping their entire transportation and logistics workflow. Mapping out the actual processes, identifying the departments and systems involved, and acknowledging often-overlooked aspects are crucial. This comprehensive mapping is the foundation for future improvements.

Define future state goals: Collaborate with organizational leadership to define the desired future state of operations. This could involve setting specific customer service or cost reduction goals. Understanding these objectives is essential for developing a strategic plan that transitions from the current state to the desired future state.

Balance technology with human decision-making: Recognize that technology is not a cure-all solution. It should complement and enhance human decision-making processes. Evaluate how existing business practices, like fleet-versus-hire decisions, interact with technology. Understand the limitations and opportunities of technology in your business context, ensuring that it aligns with customer needs and risk management.