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Want more information? Contact us to see how we can help you.
Today’s Transportation Management Systems can be implemented faster than ever before, due to being hosted by cloud servers and accessed over the internet, (Software as a service SaaS) meaning that deployment to multiple locations can be fast. The focus of this blog however will be on gaining value from a Transportation Management solution over time.
Two areas that stakeholders usually concentrate on to reduce costs and ensure carrier compliance are load planning / consolidation and execution or carrier selection, but this can often be too narrow a focus, meaning that organisations can often miss the larger possible savings.
A Transportation Management System can also provide:
The effective management of shipping/courier company contracts as part of the procurement process can result in significant savings as can a freight audit. While visibility and tracking of the goods, related purchase orders as well as the shipments can help drive down inventory levels and provide better service levels to customers.
Add on modules and features such as Fleet Management, Parcel Management, Pool distribution, Dock Appointment Scheduling and Yard Management can provided further improvements and savings while also adding extra control and visibility to the transportation environment.
Real value can be unlocked when companies take the time to stand back and assess the possible advantages of their new Transportation Management System, studying how their operations could be run differently to take advantage of the solution. You need to leverage the capabilities that already exist in your TMS as opposed to looking for unique process that require implementation time and changes being made to the software. Concentrate on the ‘needs’ of the company rather than the ‘wants’ as these ‘wants’ can increase implementation time and reduce project momentum.
Standardisation of contracts and carrier communications can streamline and accelerate the implementation of a Transportation Management System. A good TMS will help by providing standard contract templates.
Having standard transport and carrier contracts makes entering the information and managing them much easier and faster, while enabling discrepancies and differences between carriers to be spotted more clearly. This is also the perfect time to re-evaluate contracts for service levels and pricing. Keeping the carrier communications simple and standard is also an area that can otherwise slow down an implementation or lead to alterations and a thus a reduction in ROI.
The aim is to bring as many carriers on board with the new system as quickly as possible, so a standard set of messages and the communication process with which the carriers must comply benefits not only the onboarding process, but future additions to the list as carriers will come and go over time.
The more extensive the initial rollout the higher the possibility of failure. It is best to breakdown the implementation into a number of phases, e.g. by region, transportation mode or functionality/department. With each small step that is successfully implemented so staff and management will gain confidence and a successful implementation is more likely.
How success is initially defined is also best kept simple, such as “total cost saved”, it can be easy for load planners to find a delivery that they believe they could have planned better and saved money on, but the creation of one poor load might have been so that the TMS could produce 50 better ones.
Metrics around service need to be considered in the same way, however for shipments to customers it is important to capture the outlying performers and adjust the process or system quickly to prevent them happening again. A good metric is to monitor the level of required manual intervention, i.e. how often do loads need to be adjusted. But it is important to realise that manual intervention costs money, too many changes can degrade the ability of the system to make optimised choices. Capturing and comparing the optimised delivery plan with the final plan that may have had manual interventions on it and comparing the overall costs and savings will show which system is the better.
A Transportation Management Systems’ generated data can provide value beyond the transportation department. Real value can be derived from having transportation information on shipping plans and real-time status of goods or purchase orders at key points along the delivery process.
Increased visibility can potentially help supply chain planners and purchasers hold less inventory. Customers can make more informed decisions before their goods are even delivered, while suppliers can make adjustments to their next shipments based on the location of a previous shipment and carriers can lower costs and provide a better service when they have advanced notice of loads, volumes, quantity and collection times.
Transport information and its use by all departments and outside organisations should be considered as part of any business value case for a TMS.
After a successful implementation of a Transportation Management System processes need to be in place to maintain the system. Carriers’ data and processes change over time and the system needs to be maintained with the latest contracts and information.
The Transportation department needs to work closely with purchasing or contracts to ensure that the performance of any carrier is monitored, and feedback relayed to them on a regular basis. This will form the basis of future improvements and contract negotiations.
Training of future users is as important as the training was for the initial users to ensure that the TMS system is used to its upmost and correctly. While attention should also be paid to the TMS suppliers’ improvements, software is continually being developed and new features or improvements added to solutions. These enhancements are often influenced by issues and improvements you or other companies have identified and from which your organisation can benefit.
Modern Transportation Management Systems offer more capabilities and benefits than ever before. Maximising the potential value of a TMS starts with the vision for using the system and comes from developing processes and plans that fully exploit the TMS’s existing capabilities while also standardising key elements during implementation.
A phased deployment can build upon stepped success and create momentum for a quicker return on investment. While ongoing benefits come from continual training and developments of the system.