ADMi Trends in YMS Systems March 2010 FINAL

8/9/2019 ADMi Trends in YMS Systems March 2010 FINAL

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C o p y r i g h t A u t o D i v e r s i t y M a n a g e m e n t I n c . ( A D M i )

2010

Trends in Yard

Management

Systems

AutoDiversity Management inc.

(ADMi)

Supply Chain Consulting

Research White Paper Series

March 2010


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2010 Yard Management Survey

C o p y r i g h t A u t o D i v e r s i t y M a n a g e m e n t I n c . ( A D M i ) P a g e | 2

TABLE OF CONTENTS

Editors Note .................................................................................................................................................................. 3

2010 Trends in Yard Management Systems: Introduction ............................................................................................ 4

Methodology & Purpose | ......................................................................................................................................... 4

Respondent Profile | ................................................................................................................................................. 5

2010 Yard Management Survey: Results ....................................................................................................................... 6

Business Profile, Organizational Roles & Supply Chain Service Involvement | ......................................................... 6

Question 1: What is your primary business category? .......................................................................................... 6

Question 2: What is your Organizational Role? ..................................................................................................... 7

Question 3: Does your organization purchase/utilize OR provide/coordinate supply chain services? ................. 8

Question 4: If you chose "Purchase/Utilize", what is your organization's annual supply chain budget?.............. 9

Question 5: If you chose "Provide/Coordinate", what is your organization's annual supply chain budget? ...... 10

Question 6: If you chose Provide/Coordinate, what is your organizations primary service role? .................. 11

Scope and Detail of Current Yard Management System Operations ...................................................................... 12

Question 7: Types of Equipment Managed through your Yards and Facilities ................................................... 12

Question 8: What Types of Yards and Facilities do you manage? ...................................................................... 13

Question 9: How many Shipping Yards and Facilities do you operate? .............................................................. 14

Question 10: What Percentage of your Yards and Facilities use an electronic Yard Management System? ..... 15

Question 11: How would you rate your experience with your existing Yard Management System? ................. 16

Question 12: Which technology platforms currently touch your yard and facility operations? ......................... 17

Question 13: Satisfaction ratings for each tech. category applicable to your yard and facilities management . 18

Question 14: What type of Functionality do you look for in a Yard Management System? ............................... 19

Question 15: When do you plan on investing in a Yard Management System? .................................................. 20

Concluding Analysis ..................................................................................................................................................... 21

About Us & Contact Information ................................................................................................................................. 22

About AutoDiversity Management inc. (ADMI) ................................................................................................... 22

Contact Information ............................................................................................................................................ 22

Confidentiality ..................................................................................................................................................... 22


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EDITORS NOTE

March, 2010

Towards the end of 2009, we were approached by several clients

wanting to discuss Yard Management Systems (YMS) and the potential

savings that effective use of these systems can offer the supply chain

industry participants. The level of interest was so much higher than

expected and the questions being asked much more detailed than in the past few years

that we decided to undertake this study to better understand how organizations viewed

and leveraged YMS in the current economic climate.

The research was brief, precisely focused and designed in the form of a 15 question

survey distributed online to a targeted list of supply chain professionals. Although the

brevity of the survey indicated that the results would merely be a temperature check of

current opinions on the subject, we found that the responses yielded much richer

results and correlations than initially anticipated.

Although YMS is recognized as a significant percentage of an overall annual budget,

over 50% of respondents do not currently employ any electronic system. With the

growth in volume and complexity within this arena, the interest in increasingly flexible,

responsive and integrated systems appears to be growing and on the cusp of a

corporate demand upswing.

Thank you to all the respondents that made this study possible and I hope that you

find the results as interesting and useful as we did.

Marc A. Brazeau

Principal

AutoDiversity Management inc. (ADMi)


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2010TRENDS IN YARD MANAGEMENT SYSTEMS:INTRODUCTION

As the supply chain industry continues on its path to recovery in 2010,

there are a tremendous number of companies that have used the recent

downturn to examine every facet of their operations and cost drivers not

only to survive but to also be prepared for the rebound.

As part of that exercise, many companies have begun looking at those areas that

traditionally have low operating margins and therefore have lower returns than other

larger scale supply chain initiatives. One of those areas where ADMi is seeing a lot of

activity and investment in is yard management systems. Yard management refers to the

first and last mile activities that happen with any number of change of custody

locations; ports, containers, trucking activity, cross-docks, manufacturing points,

distribution centers and motor vehicle storage yards, which seem fairly straightforward

on the surface (thus the low operating margins), however, represent a critical piece in

the supply chain and in just-in-time inventory management.

The underlying complexity present in yard management operations is compounded

by the growing requirement for yard flexibility in handling multiple commodities and

modalities across a common geographic footprint. This growing complexity has created

an opportunity for more and more sophisticated yard management systems.

Traditionally, yard management systems were developed, maintained and utilized by

the specific yard operators and role-specific service providers but, as weve seen with

other supply chain related systems (ERP, WMS, TMS), developers of commercially

available off-the-shelf systems have been focusing on providing solutions for the

remaining modules in the supply chain, including yard management.

Methodology & Purpose |

ADMi worked with several Global supply chain publications to develop the

distribution list for our 2010 Trends in Yard Management Systems survey during the

months of December 2009 and January 2010, distributing the questionnaire to

subscribers across nine industries. Participants were asked to assess the interest in,

need for and effectiveness of yard management systems in their organization. Survey

responses were collected through the first week in February then analyzed and

summarized at an aggregate level.

The 2010 Trends in Yard Management Systems survey provides a comprehensive

look at the satisfaction with customers existing yard management systems and the

willingness to invest in yard management systems in the near future, as well as general

trends in the use and functionality of these systems.

With this in mind, a series of questions were developed to determine whether

respondents:

Currently utilize a yard management system and its effectiveness Demonstrated a willingness to invest in yard management systems as well as

other types of supply chain operations technologies


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Were satisfied with the functionality required and available in yardmanagement systems

Operated the types of shipping facilities that require yard managementtechnology

Respondent Profile |

Survey participants were drawn from nine global industries, all of which rely heavily

on supply chain networks. Respondents were targeted through the Global subscription

lists of 2 major supply chain magazines and identified as recognized decision makers

that would be interested in participating in this survey.

Respondent profiles include:

Responses from the United Kingdom, the European Union, North America, Asia,and Africa

Fairly even distribution among Executive level management, Mid-levelmanagement, IT management, and Operations management

59% considered providers or coordinators of supply chain services while theremaining 41% represented purchasers or consumers of logistics services

Representation of nine different global industries Diverse response rate among large and small companies:

50%-55% of purchasers and providers of supply chain serviceshave an annual budget of less than $10 million

10%-15% of purchasers and providers of supply chain serviceshave an annual budget of greater than $100 million


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2010YARD MANAGEMENT SURVEY:RESULTS

Business Profile, Organizational Roles & Supply Chain

Service Involvement |

Question 1: What is your primary business category?

The opening question profiled the primary business interest of respondents. The

2010 Trends in Yard Management Systems Survey (YMS) captures data from a wide

array of industries though, not surprisingly, High Tech and Supply Chain Services

represent over 50% of respondents. What is unexpected is that these numbers and

those for Manufacturing & Processing (15%) and Transportation Providers (13%) were

not higher given the narrow focus of the survey on a very tactical piece of the supply

chain.

Further, the participation of service purchasers and beneficiaries of effective YMS

(i.e., Food & Beverage, Warehousing & PDC, Aerospace, Automotive, & Retail (24%)),

indicates a strong interest in the emerging YMS trends and practices of their service

providers. This highlights the crucial importance of effective first and last mile

management to those who, though they themselves dont control truck and trailer yard

operations, rely on the efficient scheduling, management and communication of those

that do.

Figure 1 - Primary Business Category


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The study highlights t

increasing focus on th

weak link in SCM and

willingness to suppor

YMS

The interest shown by the High Tech sector (20%) which comprises mostly software

and application development organizations is a strong indicator of commercial interest

in the development of YMS applications, management hardware, and support

technologies for this market.

With 44% of the respondents either beneficiaries or support developers, the study

highlights the increasing importance and focus on what many consider the weak link in

supply chain management function and implies a burgeoning willingness to support YMS

initiatives that result in greater investment in R&D and the emergence of tools to allow

service providers to improve efficiency and derive further savings in this traditionally

low-margin segment of the supply chain.

Question 2: What is your Organizational Role?

This question identifies the roles of the respondents and provides insight into who

may have input into Yard Management decisions.

As per Fig. 2, although fairly equal distribution was found among the top three

respondent roles the survey illustrates that decision makers at the C-Level/Executive

and IT levels far outweigh the participation rate from actual Supply Chain Strategy and

Operations personnel (36%). This finding runs counter-intuitive to the research

expectations of a high number of respondents that would have hands-on experience or

responsibility with the operations management of a truck or trailer yard taking the lead

in responding. These results, demonstrating the involvement of these respondents to

this survey, indicate a high interest, or timeliness, in considering re-investment in the

Yard Management sector.

Figure 2 Respondents Organizational Role


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Finally the participation of IT Management hints at the current landscape for yard

management systems; historically, YMS were developed in-house as an extension of

existing warehouse management or freight payment systems, however, the increased

pace of development over the past 10 years coupled with the emergence of off-the-

shelf alternatives provides organizations with additional development and support

options for their existing legacy systems.

Question 3: Does your organization purchase/utilize OR provide/coordinate

supply chain services?

This response provides insight in to the respondent organizations involvement with

the Supply Chain and creating a basis for deeper analysis of the survey responses.

Although response rates indicate a slight slant towards service providers, the

important finding is the fairly equitable distribution of responses from both companies

providing supply chain services (59%) and those purchasing supply chain services (41%),

providing a fairly balanced opinion base for the remaining survey questions.

Figure 3 Role within Supply Chain Services


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Based on feedback,

smaller companies ar

leading the charge

Question 4: If you chose "Purchase/Utilize", what is your organization's annual

supply chain budget?

This question establishes the significance of the annual spend on supply chain

operations. The YMS survey illustrates that regardless of an organizations annual

budget for most the supply chain costs represents a significant overhead.

Based on feedback, smaller companies are leading the charge towards exploiting

the opportunities provided by effective yard management advancements. Fifty percent

of all respondents have a supply chain budget of under $10 million per year.

Figure 4 Organizations Annual Supply Chain Budget (for Purchases/Utilizes)

Larger companies, those with budgets greater than $100 million, represented the

smallest group of respondents while mid-sized companies, grouped by three different

spend categories, equally split the remaining responses. This breakdown makes sense

given the focus on improving a relatively small, though critical, piece of the supply chain

and the following considerations:

o YMS operate under razor thin margins, making operational costreductions difficult and, thus, any returns on invested improvements

challenging to justify.

o Larger companies, with larger budgets, have higher priority areas ofimprovement in their supply chain that provide a greater ROI.

o Yard operations tend to be critical in nature, with constantly changingpriorities and expedite exceptions that make standardized cost

reduction programs difficult to implement.


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Service providers ar

demanding greater

flexibility and complex

from their Yard

Management System

o Smaller companies are forced to be on the forefront of improvementto create and retain a competitive advantage, by the nature of their

position they must leave no stone unturned.

Question 5: If you chose "Provide/Coordinate", what is your organization'sannual supply chain budget?

As depicted earlier in Fig. 3, 59% of the respondents are providers and coordinators

of supply chain services

To this question feedback demonstrated that service provider participation is

slightly higher for operations with a smaller supply chain budget category, 56% vs. 50%.

This response is consistent given the analysis to the previous question whereby smaller

service provider companies are under greater pressure to reduce overall cost and

leverage every opportunity to ensure a competitive ranking alongside larger integrated

supply chain providers. These organizations also include companies that specialize inyard management and truck and trailer operations, making their interest in yard

management systems critical to overall success

Figure 5 - Organizations Annual Supply Chain Budget (for Provide/Coordinate)

The survey revealed that 26% of the respondents both purchased, and provided

supply chain services. These companies need to fully understand the importance of

developing tools to improve efficiencies and capitalize on re-engineering efforts. They

stand to benefit the most by improving profit margins and becoming more competitive

in the marketplace.


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Question 6: If you chose Provide/Coordinate, what is your organizations

primary service role?

The response to this question highlights the organizational roles that are

demonstrating a greater interest in Yard Management systems. The top three

functions, which make up over 80% of the respondents, will be evaluating the latest

available yard management technology and its capabilities.

Chief respondents are companies that provide 3PL Services (33%), indicating either

an interest in improving current horizontally integrated abilities, investing in operational

capability or investigating emerging technologies as a matter of strategy.

Here again, we see a tremendous interest from the IT Systems and Services sector

in the service provider category. This sector indicates a strong interest in emerging

technology for this area and where IT Systems and Services can integrate further down

the supply chain from CRM to ERP to WMS to TMS and finally YMS.

Figure 6 - Organizations Primary Role (for Provides/Coordinates)

Consulting Services demonstrates the third highest interest and plays a significant

role in identifying, promoting and supporting emerging supply chain technologies. Their

interest in YMS is not surprising given the potential revenue streams created by

software integration and support engagements.

Trucking and Vessel Services, as well as Others (Express Couriers and LTL providers)

make up the remaining respondents. These categories interface with YMS to either

receive instructions from, or provide input to, specific yard management systems

streamlining delivery and receipt of goods, and ensuring effective scheduling of

truck/trailer resources.


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Scope and Detail of Current Yard Management System Operations

Question 7: Types of Equipment Managed through your Yards and Facilities

The response to this question demonstrates that supply chains are currently

running the full spectrum of different types of equipment all of which require some sort

of interface to Yard Management Systems.

Figure 7 Types of Equipment Managed through your Yard and Facilities

Standard containers proved to be the most common type of equipment in use with

an exposure rate of 65% while standard Truck-Trailer combinations came second with a

showing of between 40-44%.

Beyond container and truckload traffic, which require the least amount of

complexity in terms of yard management system, equipment types used are a wide

variety of truck configurations, rail and finished motor vehicles. This complex variety of

equipment is an important consideration for yard management systems as it requires

shipment details, handling instructions, yard configuration and asset scheduling


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information that surpasses any effortless tracking of single pieces of equipment within a

yard. Therefore, service providers require greater and greater complexity and flexibility

in terms of yard management system upgrades, changes or replacements.

Question 8: What Types of Yards and Facilities do you manage?

Responses proved fairly consistent regarding the types of yards either utilized ormanaged, with no category accounting for more than 47% of total responses.

There is a clear split however between certain categories, with finished vehicles,

ports and vehicle homologation centers accounting for fewer than 15% of activity whilst

the 5 leading categories comprise between 34% and 47% of yard activity.

Figure 8 Types of Yards and Facilities Managed

The top five categories have specific challenges as detailed below:

Cross docks (46.9%) generally represent the greatest level of schedulingcomplexity,


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Consolidation Centers, coming in second at 40.6%, represent a challenge due toextensive WMS integration requirements,

Container yards (37.5%) generate volume and throughput complexity, Manufacturing Plants (37.5%) represent the most time-critical complexity of all,

and;

Bulk terminals (34.4%) require consideration for a variety of transportationmodes and limited loading and unloading options.

With no category accounting for greater than 50% of responses, its clear that most

providers of yard services have developed the capacity to handle multiple operations

and modality within their yard locations and that their yard management system

considerations must be flexible and robust enough to handle the increased complexity

present in contemporary supply chain management yards.

Question 9: How many Shipping Yards and Facilities do you operate?

Though the majority of respondents, 81%, operate between 1 and 10 facilities

(81%), 56% of those respondents operate under 5 facilities throughout their network.

These results support earlier analysis that interest in YMS is led by relatively smaller

companies (revenues of $10 million/year) and single facility companies (that may have

geographic leverage over the business they represent) that would see more benefit

from adopting standardized YMS. This finding could equally imply that perhaps these

same smaller companies simply have yet to make the investment in YMS that larger

organizations may have already committed.

Figure 9 Number of Shipping Yards and Facilities Managed


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Question 10: What Percentage of your Yards and Facilities use an electronic

Yard Management System?

This question clarifies and supports the previous analysis regarding potential

demand and future adoption rates for YMS. Results show that 56% of respondents

(comparable to the population of respondents that operate under 5 facilities) currently

have no electronic yard management capability.

Figure 10 Percentage of Yards and Facilities Managed using an electronic Yard Management System

Results underscore the potential for efficiency and cost improvements for

respondents currently without a system. For operations with thin margins, replacing

legacy or existing applications is frequently a low priority regardless of the potential of

emerging technologies, however, for those without any systems, operating off of paper,

clipboards and dispatch whiteboards, productivity improvements provide a compelling

business case for investment.


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Question 11: How would you rate your experience with your existing Yard

Management System?

The results to this question are interesting for the overall level of satisfaction they

indicate for existing solutions (still representing only 44% of all responses), and the

cluster of mediocrity that all dimensions represent (between 2.6 and 2.8).

Figure 11 Evaluation of current Yard Management System

Excluding the Implemented on Time/Budget dimension, respondents were least

satisfied by their experience with the following:

Perceived improvement to work processes; Value of real-time visibility; and, The identification of any considerable savings.Taking into consideration that this applies only to those with systems (44%) and, it

is assumed both legacy and newer systems, these results form an effective benchmark

for the 56% of respondents that dont currently use any systems.

The key to maximizing the effectiveness of future investments in YMS is to addressany satisfaction short comings and/or understand that current satisfaction levels for

YMS, or the opinions of users, is fairly neutral. These findings provide an appealing goal

for emerging technologies to target and address in the release off-the-shelf solutions,

particularly when considering the market potential of over half the respondents not

utilizing any solutions.


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Question 12: Which technology platforms currently touch your yard and

facility operations?

This question explores system integration within organization in relation to their

YMS choices. It outlines the types of applications that require some measure of

integration with YMS to maintain a seamless supply chain and the nature of their

development.

Figure 12 Technology Platforms which touch the yard and facility operations

YMS modules will most likely have to interface with the following enterprise

applications, whether commercially packaged or an in-house, or legacy, application:

90% of respondents utilize some sort of warehouse management system,with slightly over 50% of them relying on commercially available solutions,

70% rely on a transportation management system, again with roughly 50%of those solutions coming from established vendors,

66% have some sort of enterprise resource system that integratesoperational administration across functional departments, and

Roughly 50% of respondents have some sort of CRM or Manufacturingsystem to take into account when considering additional systems

integration

The responses do, however, highlight the use of commercially available off-the-

shelf applications when it comes to management or enterprise software within the

sample population. Commercial applications account for roughly 50% within each

category, with further adoption reasonably expected to grow. With the majority of

respondents experienced in selecting and implementing commercially available systems

for other aspects of their supply chain, we would expect the market for YMS systems,

with such a low current penetration rate, to increase as more flexible applications with

proven ROI track records become widely available.


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Question 13: Satisfaction ratings for each technical category applicable to your

yard and facilities management

This response highlights a potential integration issue with existing YMS, particularly

as it relates to current YMS and TMS solutions.

These responses are further eroded when compared to the results for YMS

satisfaction (Q.11) highlighting the importance of the integration experience as a crucial

component to overal all satisfaction. In fact, the most compelling aspect of these

responses is the perceived satisfaction that those who currently utilize no software have

a slightly higher satisfaction ranking that those who utilize the different types of systems

available. Although this doesnt address the functional benefits of YMS systems, merely

the satisfaction of those systems once implemented, this does underline the difficulties

in adopting, integrating and utilizing automated systems where there were none in the

past.

This appears to further highlight the need for system providers to improve the

implementation and delivery aspects of their applications or, in other words, somehowovercome the perceptive hurdle between satisfaction and functionality.

Figure 13 Satisfaction Levels with Technology used as part of your Yard and Facilities Management


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Question 14: What type of Functionality do you look for in a Yard

Management System?

The response to this question demonstrates an overwhelming requirement for

improved activity tracking and management and scheduling capabilities when

considering a YMS. This requirement is closely followed by by the futher need for some

form of load building capabilities. These findings are unsurprising as they represent the

complex tasks associated with horizontally integrated yards. Other functionality

categories scored lower as they tend to be out of the operators control (Yard Design

Capability), or are adminstrative processes established in any yard regardless of

technology.

Figure 14 What type of functionality do you look for in a Yard and Facilities Management System?

The importance of Activities Tracking & Management corroborates the findings

collected regarding yard and equipment types (Q.7), all of which require a great deal of

integration and visibility to ensure proper handling and scheduling.


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Question 15: When do you plan on investing in a Yard Management System?

Although few respondents were sure of when they would/could invest in a yard

management system, 22% felt that they were in a position to invest in the next 12

months.

Only 4% gave any indication that they would invest in the next 2 years, implying ashorter sales cycle than traditional supply chain solutions and requiring providers to

focus on leads that generate potential within the first 12 months of contact.

Figure 15 Planned Investment Horizon?

The uncertainty indicated by 60% of respondents suggests that this percentage

could be targeted by a proactive marketing and sales effort to quantify leads into the 12

or 24 month categories.


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CONCLUDING ANALYSIS

The 2010 Trends in Yard Management Systems white paper reflects that

although a majority of companies are not currently invested in YMS at this

time, there is a significant interest in the subject at a high level in both service

consumers and providers, specifically within the C-level and IT managementroles. The market opportunity seems to support a significant growth in

investment in YMS over the next 12 months with a tremendous market capacity of non-

users that could benefit from further automation.

Smaller companies appear to be leading the trend to improve this critical piece of

the supply chain. This may be because theyve already addressed the higher priority

issues within their supply chain networks and are now positioned to address yard

throughput issues. Larger companies may still be concentrating their efforts on the

more complex issues of their network that result in more significant savings. This means

that the smaller companies may be better positioned to take advantage of a near term

economic recovery, as well as the lead in yard management best practices. This also

underlines the need for small companies to remain innovative and progressive in order

to compete in a market that will only see more and more consolidation.

The trend is definitely shifting away from in-house developed systems that may or

may not be inflexible in operating multiple locations based on their specific

requirements, or do not have the scalability to support strategic growth. In any event, it

appears that there are finally enough off-the-shelf options in the market that most

organizations expect to, at the very least; perform detailed build versus buy analysis

when considering implementing or upgrading a system. In fact the results indicate that

commercially available systems are already outstripping all other categories as the

preferred option.

The challenge in this market will be how providers overcome the perceived

dissatisfaction, or at least ambivalence, with the integration and functionality

experience of those companies that have invested in YMS (or other enterprise solutions)

and are currently using some sort of automation for managing their yards. This

ambivalence puts a premium on those service providers and or applications that

demonstrate superior ease of integration and implementation, flexibility in function,

maintenance and distribution, as well as flexible cost options that reflect the users

specific needs.

Finally, YMS investment appears to be a short cycle decision, with organizations

expecting the definition, planning, implementation and go-live milestones to happenwithin 12-18 months. Interest in YMS investment seems to peak at the 12 month period

and then wanes into a longer term (over 24 months) strategic consideration.

Jennifer Cavanagh David C. Vandenbossche

Senior Research Associate Principal Consultant

London, UK Detroit, MI


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ABOUT US &CONTACT INFORMATION

About AutoDiversity Management inc. (ADMI)

ADMi is an impartial supply chain consultancy and research organization that offers

clients strategy, research and collaboration support by providing supply chainbenchmarking and analysis. ADMi provides strategy consulting, transportation research,

decision and purchasing support to the Global supply chain industry. ADMi is uniquely

designed to provide unbiased, non-conflict of interest supply chain research and

decision support services to all the supply chain industry by creating mutually

productive collaborative network opportunities, promote supply chain innovation and

standards, as well as provide qualifying tools to emerging carriers and service providers

to improve overall competition.

Visit the ADMi website atwww.autodiversity.com

Contact Information

For more information on this report or to participate in further studies please contact:

David C. Vandenbossche,

Principal Consultant

[email protected]

Confidentiality

All information in this document is provided in confidence for the sole purpose of

adjudication of the document and shall not be used for any other purpose, be published

or disclosed wholly or in part to any other party without ADMIs prior permission in

writing nor be held in safe custody. These obligations shall not apply to information

which is published or becomes known legitimately from some source other than ADMI.
http://www.autodiversity.com/http://www.autodiversity.com/http://www.autodiversity.com/mailto:[email protected]:[email protected]:[email protected]://www.autodiversity.com/

ADMi Trends in YMS Systems March 2010 FINAL

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