At the very onset of this article, let us take a digression for a change. From the financial, pragmatic world of logistics, let us take a detour into the imaginative, idyllic world of language. One of the core components in beautifying a language is figures of speech. Yes, the elusive world of simile and metaphor who work at the poets’ beck and call! Sometimes they are a bit too... well, let’s say figurative. But there is one figure of speech that is very easy to understand and is used quite often in our everyday humdrum conversations. That figure of speech is called ‘Acronym’. Now, the word acronym comes from two Greek words, namely ‘Akron’ which means ‘tip of something’ and ‘Nym’, which means ‘name’. When clubbed together, the word that is formed is ‘Acronym’, which literally implies ‘the tip or the beginning of a name’. Hence, when we use the initial letters of a group of words to form a new word, we resort to acronyms. Probably, the illustrious readers are already feeling a sense of vapidity as to why this article is teaching prosody to them when they have got nothing to do with it and probably bringing back memories of their long-forgotten high school English classes in droopy afternoons. In our defence, the only formidable argument that we would put is that language permeates everything and the world of logistics also has quite a few examples of acronym. As it is famously said that God lies in the details, we thought of giving an overview of everything, by starting from the very scratches. Now, let us simply dive into the world of logistics without much ado because that’s what we are here for!
For any beginner, the world of supply chain would look like a rocky terrain with so many jargons and abbreviations hurling themselves from left, right and centre! As confounding as they may seem to be initially, once delved deeper, it would be crystal-clear that each of the abbreviations/jargons have their fixed definition, their functionality, their unique set of work and though sometimes they do overlap, they can be as different as chalk and cheese. Any person or company that wishes to flourish in the world of supply chain management must take cognizance of these terminologies and implement them to a greater degree in their business. Before we methodically discuss some of the key acronyms in the domain, let us remind the readers of the modern context yet again. With the complexity on the rise and the inception of technology, it has become almost impossible to ignore the impact or say intervention of technology in the supply chain. Different software solutions are either developed by the companies or third party solutions are used to ease out and mange the tough jobs of handling fleet, order, planning route, checking cost and optimising resources with everything in the broader perspective. In this article, we would apprise the readers of the words that have come into existence with the advent of the software solutions because they themselves are the umbrella terms for the different solutions provided for a particular cluster of words.
1. TMS: The basis of any efficient supply management organisation is an effective TMS or Transport Management Solution. As it is suggested by the self-explanatory name itself, TMS looks after the seamless transportation of goods. It works upon the data provided by the order management system through a popper synthesis of units and build a solid business model thereafter, upon the information provided. From sourcing of the materials to on time and in full delivery; from zeroing in on routes and shippers to return of any product, everything comes under the purview of TMS. Since TMS deals with the bottomline of the supply chain, it is an extremely important component in striking good bond with customers, taking feedbacks from them and to impact their purchase decisions. Modern TMS comes with the features of advance route optimisation, built-in cost to serve technology to cater to the growing demands of visibility, live tracking-tracing and predictive analysis. It has therefore, taken the centre stage and does a lot of work that previously the traditional order management system used to do.
2. WMS: While TMS’s mainstay is to ship the consignments to their final destination, Warehouse Management System deals with the inventory that is present in the warehouses. In the modern scenario, managing a massive stock that a warehouse offers is no mean task. With motley of items, perishable and brittle, highly complex order patterns; one requires a very competent WMS for processing order through efficient picking, packing and first in, first out rotation. Unless a company does not take stock of the goods that they have and does not have the foresight with regard to inventory replenishment, put-away orders and a strong audit of the warehouses, it cannot succeed in this cutting-edge of a business world. Thus a software-reliant, data-driven WMS is no more a luxury, but a need of the hour, unless we want to see the warehouses, the very core of inventory getting collapsed.
3. OMS: Order Management System can work as a stand-by or back-end of WMS. OMS, like WMS deals with stock of goods, picking, and smooth coordination with TMS. It deals with the sale and purchase of goods, marketing, analyses the data and pattern related to the orders and helps procure people, shippers and materials that can optimise customer satisfaction. So, in a way it adds value to the efficacy of TMS.
4. LMS: Human resources are the biggest strength for any organisation. If the companies do not channelise their human resources, manage their labour and let is unbridled, things are bound to go haywire. Hence, an efficient labour management system is absolutely necessitated in any company. Like many other domains, there is an ongoing debate as to whether machines and artificial intelligence can oust human labour or not because automation of the systems has become a matter of contention in the modern market. However, it can be said that most of the systems cannot afford full automation of the warehouses. The chances are very scant in the coming decades as well. On the top of it, robotics and machines will always be dependent on human beings. They cannot supersede the labour that made the former come into being.
5. ERP: Enterprise Resource Planning System or ERP is basically a legacy system that was built in order to bring in a large spectrum of work under the same umbrella. Even a few years ago, when supply chain management had not become a rather torrid affair, ERP could relevantly integrate a huge range of work in a single enterprise-sized system. These included, sales, marketing, human resource management, warehouse management, inventory planning, finances and many more things. From this medley of work that ERP used to deal with, it can be safely said that setting up the synergy amongst such a diversified range of work has been and is no mean task. It boils down to the fact of taking account and accountability of all the resources and assets that are there at the company’s disposal. Managing so many things with the help of a single system could leave a lot of lacunae. It is exactly because of this that ERP has slowly turned out to be a legacy system with its functionality and capability slowing giving ways to much more advanced and structured cloud-based solutions like TMS and WMS. Instead of attempting to strike a chord amongst all the clusters, work is now largely fragmented so that each and everything can be emphasised upon, their data can be be generated, preserved , studied and betterment can be sought.
6. SaaS: While the big players in the supply chain management can afford to develop their own software solutions with the help of their financial prowess, it can be a very expensive affair for the small and mid-sized logistics providers. Hence, SaaS or Software-as-a-Service has come into being and is quite popular in the market. SaaS implies the software solutions that are provided by a third party in exchange of a particular amount of money in the form of subscription. It is a very conducive solution as the small and mid-level companies can avail all the solutions and can be apprised of the market trends at a cost that is meagre in comparison with the one that goes into making the indigenous solution for a company.
While enumerating all the solutions that are prevalent in the modern market, it must also be noted that if the systems are not properly synthesized and if the data provided by one solution is not availed and worked upon by the other, then there is no need of incurring so much of expense to build such customized systems. Thus, apart from and along with taking recourse to software solutions, it must also be taken into consideration that the systems are flexible in integration and adaptable in exchanging data. Therefore, it is advisable that companies build a tech stack for themselves and continually work upon to stay abreast of the changes in the inter-related spheres of technology and supply chain.