We are in the Digital Age!
In Supply Chain that means we want and need full end to end visibility and transparency. To provide that end to end visibility requires electronic connectivity of all nodes of the Supply Chain.
And when it comes to providing that visibility and connectivity with respect to the movement of goods throughout the Supply Chain it means we all need a Transportation Management System (TMS).
But gone are the days when you needed to create your own TMS or even buy one. In this Digital Age you should be able to get this capability for free!
A Win-Win TMS Strategy
Many years ago I launched a new Supply Chain service focussed largely on the sale of freight and logistics services. Every company in every industry needs to move goods of some kind from point A to point B. Yet every company does not have the size, scale, resources or leverage to optimally manage their freight and logistics requirements.
Given that we had a phenomenal freight management capability and expertise it was a natural extension to offer this service to other companies. At its core we had a great Transportation Management System (TMS) with tremendous features.
We had already made extensive, and expensive, investments in the tools, processes and systems. We had all of the supplier relationships in place. We had all system-supplier electronic connectivity established. And we had a world class global team of experts on hand.
Most companies cannot afford to make this kind of investment. They don’t have the expertise, they don’t want to tie up their cash, and they can’t afford the time required to do this stuff themselves. In this age of outsourcing most anything our freight management service offering hit a sweet spot with a lot of companies.
The premise for selling the service was simple. We would offer the TMS system to a company for free! It was Software-as-a-Service (SaaS). The company would use the TMS and it would become embedded in the day to day business processes of the people who did have to manage freight within the company. We would make our money on the margin in the freight rates that were built into the TMS system. The customer would see much better rates, and lower costs, from what they could get themselves, and they would get a free, advanced TMS capability. It was a win-win strategy!
What You Need and What You Don’t in a TMS
In any TMS you obviously need the basics in terms of electronic freight and logistics management. Beyond that there are some key features that you should look for in a TMS:
- You don’t need custom software. Building your own TMS in this day and age is a waste of time and resource. There are a large number of very competent and excellent TMS solutions already in existence. Any TMS worth its weight already has all of the features and capabilities that you need.
- A TMS solution must not be a software only solution. A credible TMS should also come with the pre-established connections to carriers that enable rapid startup. Plus the TMS should allow for quick connection to any new carriers that you have or want to add. Simply it should be an out-of-the-box solution.
- The TMS system should be hosted on a Cloud based computing basis. The system needs to be something that can be accessed anytime and anywhere. Further the TMS should be the lifeblood of your company and you cannot afford downtime. A Cloud based solution should provide the redundancy and expanse to ensure your TMS system will always be available.
- Mobile capability is a core requirement in a TMS. No longer should a TMS be limited to desktop or laptop availability. You should be able to look at your TMS on your mobile device wherever you are anywhere on the planet. You should be able to arrange, track, and manage shipments from your mobile device. This is true, real-time connectivity.
- The service provider should also be a source for great freight rates. If they are doing business with a large number of companies they should have leverage to aggregate that spend, unless you elect otherwise, to create better freight rates for everyone. Effectively your service provider can act as a Group Purchasing Organization (GPO) for freight. There may be circumstances in which you prefer to negotiate the freight but be open to the possibilities greater spend leverage can offer you.
- Your potential solution should be one that has high customer satisfaction with the other people that are using it. Don’t be afraid to ask for references and to talk directly with other users of the system. They will share their real life experiences aside from all of the sales hype. This should include a discussion about start up and ongoing operating experiences. You want a solution that has no headaches or growing pains.
- Unless freight and logistics management is a core competency within your company you may want to consider whether you need to retain this expertise in house. Your provider may be able to take this on for you as an outsourced service. This doesn’t mean that you will lose control. But it does mean you may be able to better manage this aspect of your Supply Chain. If you do consider outsourcing you want to ensure that you have an active and robust governance management process in place.
Who’s Out There?
There are a large number of solutions in the market. Again we do not recommend developing a home grown solution. While we will not go into an assessment of each of these solutions below is a copy of Gartner’s Magic Quadrant for 2018 http://kuebix.com/resources/gartner-magic-quadrant-tms with a full assessment of the market and these providers.
Conclusion
The Digital Supply Chain, Supply Chain 4.0, is here! Technology enables the connectivity that we need to provide the full end to end visibility that all Supply Chain leaders desire. As it pertains to freight and logistics management that technology manifests itself in a Transportation Management System which every company should have.
Whether your company is big or small a TMS solution provider is out there and available to you. The advantages of having a systemic TMS and getting away from phone dispatching and tracking are innumerable.
It’s time to join the 21st century! Get a TMS solution now!