Although yard management systems (YMS) may not be a very sexy topic for boardroom executives, these solutions are gaining interest with yard and warehouse managers who understand their dramatic impact on improving the bottom line by optimizing operations not only within the yard, but within the warehouse or DC as well.
Consider, for example, a real-life incident as reported by Simon Bragg, European research director for ARC Advisory Group in Cambridge, England. One U.S. retailer routinely lost a truckload of refrigerated meat every year before it invested in a YMS for its yard. Left unattended and sitting for a few days, the reefer's fuel finally expired and the load spoiled, costing the DC about $50,000.
As uncommon as it might sound, Bragg notes "a surprising number of companies will admit that they do lose track of the odd truck here and there."
Eliminating The Pain Points
Although interest levels are rising, implementation is still quite slow according to a March 2007 report issued by Aberdeen Group, which concluded that 58 percent of companies surveyed still used a manual system. Another 24 percent are using a YMS not integrated with their WMS and 12 percent use an integrated system that includes a YMS module of the WMS.
The reality is the real pain is felt in the warehouse if the yard is ill-managed, notes Chuck Bealke, vice president of transportation solutions for Plano, TX-based Retalix USA Inc. "The way that pain is alleviated is through very tight integration and very robust optimization engines. The No. 1 priority of a YMS should be to optimize the DC demand first. If you improve the operations in your yard, your DC will operate more efficiently."
Other pain points include detention charges, which could be costing companies millions of dollars a year, adds Michelle Meng-Hsiung Kiang, founder of PINC Solutions in Berkeley, CA. "Companies are also wrangling with productivity issues and the optimal utilization of equipment resources and human resources. Although the problems vary, the common theme really is the lack of visibility and actionable data."
Even the decision to purchase a YMS is getting easier as YMS solutions offer scalable solutions to meet current and future needs. For instance, a company can start with monitoring the gate activities, suggests Kiang. "You might want to consider a solution that can address your mission-critical issues right away, with the idea that as your business needs grow the system is expandable to include additional features."
The vendors we interviewed offered these top categories as a litmus test against which to determine the intelligence of your yard management system.
Visibility: High-quality, real-time data en-ables optimal and intelligent decision-making, says Kiang. "You can send people out to do yard checks, but those processes take up to several hours and by the time you are done, the data is already outdated."
It is critical to have visibility to all the trailers and containers in your yard, adds Chad Collins, vice president of global strategy for Eden Prairie, MN-based HighJump Software. "Companies also need to know the inventory of the contents of those trailers in order to prioritize them when they move to the warehouse for unloading. With companies importing thousands of containers, they need to be able to schedule containers into the warehouse to turn those products around to satisfy outbound shipments. But if warehouse capacity is constrained, they need to keep a significant amount of inventory in the yard, so visibility is extremely important."
Systems integration: Integration is the "meat and potatoes" of a YMS, says Bealke. "This means the system knows exactly what needs to happen before it happens. It should not be a question of someone having to react to something like discovering there is no trailer at the door or there aren't enough 53-foot trailers to load today. The system should already have looked at that and know if a trailer needs to go out to a specific route at 7 p.m. which means you need a trailer at a specific door. Knowing it takes four hours to load this route, the system advises making a reefer trailer ready at the door at 3 p.m."