Why should you consider a Transportation Management System (TMS)?

Transportation was at the bottom of the investing priority 20 years back for companies, particularly dire when it came to investment in technology. Rightly so - there were more fundamental problems to deal with - digitizing and connecting their numerous functions, which is when the ERP space exploded - with SAP leading the charge. We have seen similar journeys for customer relations (Salesforce), employee experience (Workday, Service Now), and supplier management (Coupa). Transportation is at the cusp of this revolution. Think of the leading companies of the world - Amazon, Apple, Walmart, Cisco, J&J etc. - all of them have one thing in common - leveraging a focussed supply chain backed by a robust distribution system to create customer delight. Transportation has evolved from another cost header to a strategic differentiator. And a TMS is central to seamless transport operations.

When it comes to TMS - there are three fundamental value buckets.

• Cost savings
  
  Will this save me some cost? While for most technologies, cost savings typically come from productivity gains; A TMS, more specifically a TMS with an optimization engine - can give you real savings in transportation costs. Transportation is complex - so many variables (carriers, contract rates, modes of transport, legs of shipment) and so many constraints (Capacity, lead times, local regulations such as driving times, labor and material availability etc.). A robust optimization engine can reduce your transportation costs anywhere from 3-15%.
  
  Cost savings go beyond optimization outputs. TMS-aided transport operations are seamless - through better planning and communications. For instance, drivers are coming to the docks exactly when the material can be loaded. Lesser waiting time, lesser detention, improved savings. Happier drivers, preferred shipper status, leading to better and reliable service. Lesser the need to go to the spot markets for last-minute truck procurement. Again, more savings.
• Productivity improvement
  
  The first thing that comes to mind with any technology is productivity improvement. This is true for TMS as well. Many companies still manage their day-to-day transportation through excel-based planning, and email and phone call-led execution. Even for companies with tools for dispatch planning - the struggle for plan-to-actual adherence is real. This leads to more than 2-3 hours of bandwidth per day spent for managers, and 5-6 hours by associates. All of this can be reduced to <10 minutes. Talk about efficiency!
  
  Moreover, moving to a tool like TMS also has a key added benefit - often missed out in RoI calculations. Access to detailed data in every aspect of your transport operations. Detailed understanding of bottlenecks. Employees making decisions based on data rather than instinct. Consolidated view of operations. Proactive actions based on leading metrics to resolve issues rather than delayed fire-fighting. The true impact is difficult to measure but is pivotal. And equipped with the right TMS, your transportation team is spending time on business-critical questions.
• Improved customer experience
  
  Customers are evolving - and demanding better and faster service at lower costs. Transportation is a key to creating this experience and differentiation from competitors. A good TMS will enable you to improve your customer experience by equipping you with real-time visibility on deliveries, improving the OTIF percentages, and proactive resolution of delivery delays. Moreover, a good transportation optimization engine - optimizes not only on cost but also on customer service levels. We have seen service levels rise up by 10-12 % through TMS-led optimization.

All said and done, the core question comes down to selecting the ‘right’ TMS. While making the decisions - I would encourage you to take three things into account -

• What does your current network look like, in terms of nodes (Plants, warehouses, etc.), connections (routes, modes), and fulfillers (carriers, freight forwarders, etc.)
• What are your business priorities? What, in your transportation operations, is inhibiting you from fulfilling these business priorities?
• How do you expect your transportation network to evolve?

Once you have a deeper understanding of the above three - you will be able to identify key requirements to identify the best fit TMS for your business.

Key questions to ask while selecting a TMS:

• Configurable workflows and configurable user roles to adapt to the businesses - this is an absolute must
• Multi-modal operations – Does the TMS service all modes of freight movement that you use and are planning to use in the coming years? Can it accommodate multi-leg multi-modal shipments?
• Geography configuration – Can your TMS support the local geo requirements - this goes beyond the ability to handle multiple languages and currencies, and also includes the ability to configure local constraints and processes.
• Carrier/Trading partner connectivity - Transportation does not operate in a vacuum. There is significant information exchange between carriers and the shipper. A networked TMS which enables your carriers to interact on the same platform is highly recommended.
• Platform capabilities - Gone are the days where standalone products were the norm. You need a TMS - which can plug in through APIs with internal tools (e.g., ERP, WMS, DMS, OMS etc.), External systems (e.g., Carrier systems, especially for large providers like DHL, Fedex etc, regulatory applications) and third-party tools (e.g., BI applications)
• Data-led insights - What data does the TMS capture and report? Does it have BI capabilities to build a cohesive view of your transport operations? Can it provide predictive modeling capabilities? Does it support the dashboards that you need, or plug into your BI tools for such a dashboard? Understand the control tower capabilities (if any) in detail for answering these questions.

Learn more about Pando’s TMS platform here. here