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New Stanford study suggests shippers may start spending again
Tuesday, 08 December 2009 00:00

SAN FRANCISCO—Now that the global economy seems to be edging up from the crisis mode, will shippers start spending more on "Software as a Solution" (SaaS) technology?

A new global trade management (GTM) study jointly conducted by TradeBeam and Stanford University suggests that that may indeed be the case.

"This report demonstrates that companies can gain substantially by automating their global supply chains, probably much more than they have estimated to date," said Warren Hausman, Professor of Operations Management in the Department of Management Science & Engineering at Stanford University. "By creating a new process model attuned to global trade, we hope to help companies make improvements that will help them thrive in the global economy not just with short term gains, but over the long term as well."

Experts from TradeBeam—a major player in the SaaS-based GTM solutions industry—teamed with Hau Lee, of Stanford's Graduate School of Business and Warren Hausman, of the Department of Management Science and Engineering on the project.

"How Enterprises and their Trading Partners Gain from Global Trade Automation: A New Process Model for the China-US Trade Lane," provides estimates in key benefit categories, based on input from supply chain practitioners from the U.S. and China.

Based on more than a year of research, the results demonstrate that companies stand to gain dramatically by implementing global trade best practices and accompanying automation, enabling improvement in profitability from 10-40 percent or more, as well as delivering significant improvements in other benefit categories, such as cycle times.

A key result of the study is a new global trade process model which enables enterprises and their trading partners to systematically analyze trade lanes, and find and eliminate inefficiencies. The initial model focuses on the China-U.S. trade lane, but can be applied in other geographic and industry contexts.

In an interview with LM, Alex Thompson, TradeBeam's chief architect and vice president of market strategy, said that U.S. shippers are ready to start investing in technology again.

"Companies have underestimated how much they can gain from going global," he said. "Now that supply chains have been stretched, shippers will focus on saving more on the labor and material side, while growing the top revenue side by entering emerging markets."

Logistics Management, 12/8/2009