Logistics co. finds market for its home-grown software

By Alex Nixon
anixon@mbusinessreview.com

An area logistics company is finding a market for its Web-based management application originally developed to meet its own needs.

Information technology made a comeback in the transportation sector in the last year and a half after overselling during the late-1990s tech craze. It has become an essential element of any transportation business, companies say.

"About two years ago we could have purchased an application but it wouldn't have completely met our needs," said Robert Tuchek, president of RSI Logistics Inc.

The Okemos-based supply chain management firm instead developed its own Web-based application about a year ago to manage orders, improve customer service and track shipments, Tuchek said.

"We found out that there was a real need for this type of application," Tuchek said. "Not only have we met our needs but we created a product."

Logistics technology falls into three broad categories of increasing cost and sophistication, explained David Closs, a Michigan State University supply chain management professor.

In the relatively low-cost, low-tech Web-based category are order management applications, Closs said. That's followed by shipment-visibility applications that track orders and shipments.

"I think those two things - where you're collaborating more in terms of exchanging information where both parties have some visibility - that's one of the biggest ones," Closs said.

"In the past you've done it with pencil and paper and with faxes," he said.

A Jackson trucking brokerage based its entire business on this new technology, said Ray Bevan, director of operations for Apollo Transportation Solutions.

The division of less-than-load carrier Apollo Express Inc. began operating 18 months ago to back-haul Apollo trucks or handle order overflow, but is developing its own customer base, Bevan said.

Bevan accesses about a dozen different Web sites daily to link loads with trucks for his customers.

The Internet "makes it more competitive and makes things happen that much faster," Bevan said.

"Sometimes there's a two-hour timeline," he said. Without Web-based technology "it would be almost impossible for everything to match up that quick."

MSU's Closs thinks the trend toward greater utilization of Internet technology has grown over the last two years and will continue to grow as it becomes cheaper and easier to use.

"It's growing as people start to understand it, and the saving and improved performance it can contribute," Closs said.

In the third information technology category is management support that combines software with online applications.

These total logistics management services often are outsourced to large companies such as International Business Machines Corp. or Electronic Data Systems Corp., so-called fourth- party logistics integrators, Closs said.

RSI Logistics' application, RSInet, is finding a niche in the rail transport segment, Tuchek said. The 50-employee company handles rail logistics, bulk intermodal tank shipments and bulk transfer stations.

Customers can use RSInet for order management and shipment tracking, Tuchek explained.

"It integrates with our logistics side very well," he said.

The company can provide full logistics support to reduce costs by shortening supply chains, combined with RSInet to improve customer service, he said.

"It's a place within our business that is probably going to increase," Tuchek said. "If we set them up on the application, soon they find they are outsourcing some of the functions to us."