XML links logistics companies
to form global powerhouse
By Christopher Hearn, Software AG
Carsten Scheel hopes to extend the reach of his virtual umbrella to about 40
percent of all German logistics companies by the year 2003. His “Logistic Offer and
Order.Net (LOON), would then link the entire logistics chain into one integrated business
process.
Online commerce can only be as successful as the quality of the logistics chain on
which it is built. One excellent example is last year's Internet Christmas Shopping in the
United States.
Many stateside online retailers, such as toyshop “Etoys,” faced enormous
problems in responding to orders from some 8.6 million online customers across the
country. Many gifts arrived after Christmas – or not at all. This was due to
logistical problems, and experts in this sector are not the only ones convinced that the
potential of online shopping cannot be achieved without fast and cost-efficient delivery
to customers.
A study carried out by Berlin's Technical University shows that the logistics sector is
currently dominated by three trends: Customers are gradually being integrated into
business processes; logistics sectors are set to expand at a global scale; value-added
electronic services are playing an increasingly important role. “Electronic networks
have become a significant factor in the success of logistics vendors,” confirms
Carsten Scheel, Managing Director of LOON in Hamburg.
LOON's objective is to integrate logistics companies by means of an Internet platform
in order to create greater transparency and to generate increased customer satisfaction in
this sector. LOON is a comprehensive electronic marketplace that concentrates its
activities in four areas:
- Links freight carriers and logistics companies;
- Connects these with their customers and partners via the Internet and WAP-enabled mobile
phones;
- Gives all parties the opportunity to exchange data “in time;”
- Acts as an exchange for cargo trading contracts.
To achieve this goal, LOON used XML technology to build a comprehensive solution that
links proprietary logistics systems. LOON thus integrates existing IT applications without
a single change to their processes and user interfaces. LOON's system aims to connect the
business process involving manufacturers, traders, freight carriers and their customers.
In achieving this goal, Scheel makes much more use of Electronic Data Interchange (EDI)
systems than tends to be the case in the industry today.
In the past, the EDI standard was incompatible with other systems and too complicated
to be used across the board. Whereas open Internet technology improves communication links
between companies, far-reaching progress is impossible without generally accepted data
format standards.
“XML fulfills all criteria for a truly comprehensive exchange of data in the
commercial domain,” Scheel points out enthusiastically. In practice, this means that
all players in the logistics chain – from companies to consumers – are
integrated into one business process. This gives each participant full transparency
concerning the actual location of a given product and whether it will reach its
destination on time from the moment an order is placed to its delivery to the end user.
The scope of data available is defined for the individual needs of a group of users, e.g.
end-users do not have access to cost information. Unexplained failures, which American
consumers experienced during last year's Christmas season, can thus be avoided.
Those who benefit most from the system are the freight carriers. “We want to help
logistics companies to improve their market position and to make optimum use of their
resources,” explains Carsten Scheel. “To this end, we cooperate with big
partners and deploy advanced tools.” LOON's servers, for example, are integrated into
the Bremen Warehouse Company's data center. Software AG is responsible for achieving the
technical objectives of the XML systems.
For the first time, LOON offers the logistics companies and manufacturers the
possibility of joint planning. All parties involved can coordinate the use of resources,
plan routes, loads and delivery deadlines. They can also make timely modifications if
irregularities occur in the schedule. For example, a furniture store delivery truck would
cost time and money if it just sat idly waiting for a delivery run. Instead, this
“spare” time can be communicated in time via the Internet, thus allowing the
truck to deliver another consignment during its idle time. The truck's driver can even
access this information en route using a WAP-enabled mobile telephone.
The customer can now make better use of his time while waiting for a delivery. The
Internet gives him access to logistics data relevant to his situation. Another benefit of
this approach is that both retailers and freight carriers have a much clearer overview of
current stocks. Consequently, warehousing costs and surplus production are minimized. The
business process – starting with production – can be planned more efficiently
because partial loads, empty trips and waiting periods can be identified at an early
stage.
Carsten Scheel hopes to extend the reach of his virtual umbrella to about 40 percent of
all German logistics companies by 2003. This energetic visionary assumes that there are
currently about 15,000 e-business vendors worldwide, most of which have absolutely no
logistical capabilities. “LOON offers these Internet businesses an ideal platform
from which to access freight carrier services as they need them, to coordinate individual
shipments and to achieve optimal resource utilization,” says Scheel.
This way, chances are pretty high that even the Christmas gifts ordered on the Internet
will arrive on time in the future.
Further information: www.myloon.de
Chris Hearn can be contacted at christopher.hearn@softwareag.com |
