MIQ implements MercuryGate'S TMS to free capital for business growth!
The Company
Headquartered in Overland Park, Kansas, MIQ Logistics is a leading provider of global, transportation, and distribution services in North America, Latin America, Europe, and Asia.
Along with their global network partners, they provide services in and between more than 80 countries and deliver seamless end-to-end supply chain solutions around the world.
MIQ Logistics services help clients optimize their operations with supply chain management solutions which improve their overall business performance. These include Distribution Services to manage distribution and warehousing efficiently, Global Services to simplify international shipping, and Transportation Services to streamline domestic shipping.
Supporting this portfolio of services is state-of-the-art technologies. MIQ Logistics employs Web-native tools that are secure, easy-to-implement, and easy-to-use.
Since its inception in 2002, MIQ has evolved from a software company providing Global Trade Management and Domestic Transportation Management to a Logistics Service Provider providing a complete line Global Services as a third party. MIQ has grown, in part, through acquisition. An early acquisition of a Managed Transportation Services firm started them on the path toward becoming a full-service Logistics Service Provider.
The Issue
MIQ Logistics developed PowerTMS, its own Web-native Transportation Management System. This product, developed initially as a rate quotation and shipment management system, was expanded to include additional modes and operational disciplines.
As MIQ acquired clients, the additional business requirements were incorporated into the PowerTMS system. In addition, components were acquired from commercial software vendors to fill other functional needs. In 2009, MIQ faced the need to "make or buy" several major component subsystems to extend their reach into the marketplace.
The key issue for MIQ was how to most efficiently allocate their capital. The capital requirements within other lines-of-business caused MIQ to critically-evaluate replacing PowerTMS with an integrated commercial offering.
The Solution
MIQ had three key criteria for evaluating commercial TMS software. First, the software must be functionally complete, with the ability to manage shipment planning, day-to-day execution, and freight payment, with total visibility to in-process shipments. Further, this capability must extend to all carriers and modes — truck, rail, ocean, air, and parcel.
Second, the system must be "brokerage" capable, managing the Logistics Service Provider's relationship with both the shipper and the carrier (including the freight billing/ payment and revenue accounting).
Third, the system had to be web-native to be consistent with, and integrate with, all other MIQ systems. It had to support over 100 MIQ personnel both in a central command center, and at various clients' sites, with the ability to scale well beyond that.
After conducting a competitive evaluation of several vendor's systems, MercuryGate was chosen. Not only did the MercuryGate TMS fulfill all of the key selection criteria, but MIQ perceived that MercuryGate was a "like-minded" company of the same size, age, and culture. MIQ believed that MercuryGate shared their customer service-orientation and would work closely with them to make their transition as easy and effective as possible. This perception has been confirmed during the life of the relationship.
The key implementation issue became the conversion of MIQ's existing account base. The transition was not trivial, since MIQ had built complex integrations with many clients' systems. In addition, MIQ had developed customized reports for many clients that had to be replicated in the MercuryGate TMS. In the 18 months since the inception of the conversion, scores of clients representing over 50% of the MIQ base have been converted. MIQ will convert the balance of its customer base to the MercuryGate TMS in the coming months. In addition to outbound transportation management, the MercuryGate TMS is being employed to manage inbound deliveries from suppliers (Ready-to-Ship PO management).
The Savings
While MIQ wishes to keep specific financial savings private, they state that their ROI calculations made the decision to buy versus continue to build their own product relatively obvious. Their ROI calculation included the cost of conversion as well as the cost of software acquisition and long-term support.
Key categories of savings included avoiding significant development and system maintenance expenses, and reducing operational expenses and personnel.
"Buying software and performing a conversion is really hard work and a complex undertaking. You are usually tempted to believe that you can do it better yourself," stated the Chief Information Officer for MIQ. "For us, the critical decision was the allocation of capital — how do we spend most efficiently to grow our business? Our return-on-investment calculation impelled buying. MercuryGate has worked diligently to make the transition as straightforward as possible!"
Any organization that faces the make-versus-buy decision has the same conundrum. Transportation Management is a complex business problem, with many processes and alternatives. More and more companies are adopting commercial alternatives instead of developing, or continuing to develop, their own systems. Any organization offering managed transportation services requires the additional capabilities of a brokerage model. This ability sets the MercuryGate TMS apart.