Is your YMS a ‘nice-to-have’ tool or an investment? By Dr. Eva Savelsberg and Matthew Wittemeier from INFORM’s Logistics Division.
Your Yard Management System (YMS) isn’t exciting. In fact, in the scheme of post and parcel operations, it isn’t even a big deal; harsh, but true. You’ve heard the same feature arguments over and over disguised under the vague veil of ‘digitizing your yard’. True, some of these features are ‘nice-to-haves’ but do they add value to your business or simply cost you money to have? While we’ll look at a full range of features later in this paper, let’s start with a quick discussion on ROI. While YMSs are not exciting, a purpose-built post and parcel YMS with optimization built into it can deliver a 100% ROI in as little as 7 months and then drive significant value over its lifespan. How does this compare to a standard YMS? The way the numbers stack up might surprise you.
‘NICE-TO-HAVE’ OR INVESTMENT
A typical YMS might cost you ‘N’, and it might deliver ‘nice-to-have’ features and a little measurable value along the way. But at the end of the year, it still costs you nearly your full purchase cost of ‘N’. Annual ongoing costs will push this out to just over 2x ‘N’ over a ten-year lifespan (see figure 1). There is little added value in a nice-to-have tool.
In comparison, a YMS that delivers measurable value through optimization might cost you 2x ‘N’ but can deliver as much 4x ‘N’ a year in value. After ongoing annual costs are factored in, your post and parcel business stands to earn 36x ‘N’ over a ten-year product lifespan (see figure below).
Cost (red) vs Return (green) for a YMS over a 10 year lifespan.
When you compare the two, the standard YMS will end up costing you more than your initial investment in a purpose-built YMS and you stand to earn minimal value with that tool. In today’s ultra-competitive post and parcel business environment – ‘nice-to-haves’ don’t contribute to the bottom line and things that don’t contribute to the bottom line need to go.
You’ll find YMS software comes in all shapes and sizes – but every system is different and, not all systems have been developed equally. The trick is finding the solution that: best suits your business’s needs today, can grow with your organization for tomorrow, and will deliver the strongest ROI over its lifespan.
Below are our top 11 features post and parcel operators should look for in a Yard Management System. We’ve split the list into three sections – ‘Nice-to-Have’ features, ‘Added Value’ features, and features ‘Specialized’ for parcel operations.
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