The use of a TMS platform provides a lifeline to shippers and logistics service providers that need to rapidly increase capacity and available shipping options, and flexibility is essential to all modes, ranging from parcel shipping through full truckload (FT).
Defining agility in a TMS platform means recognizing flexibility will always add value. Supply chain professionals need to understand the top challenges associated with poor agility in a TMS platform, how a flexible platform adds value, and what shippers can do to maximize agility and value through the deployment of a TMS.
The Costs of Lackluster TMS Agility
“For an organization with $5 billion in annual revenue, this difference means the possibility of $403.9 million in extra supply chain costs per year.”
The higher spend derives from the continued need to spend more money to put out supply chain fires and eliminate risks within inefficient processes.
Organizations may have limited capabilities to plan for unforeseen events, poor responsiveness within the supply chain, lackluster visibility into day-to-day operations, and a finite pool of carriers and vendors. More importantly, bottom performers are more likely to have foregone the implementation of a TMS in favor of spending money to address the problems that are existing today.
That is the true difference between top performers and bottom performers. Top performers recognize that adding value in advance using a TMS is more profitable than hoping for the best.
Flexible TMS Platform Functions Add Value
Flexible TMS platform functions add value to supply chains in several ways.
The flexibility afforded by a TMS platform, particularly when outsourced, are significant, and according to Stephen F. Dean of Material Handling & Logistics, include “best-in-class logistics/DC operations, DCs that are closer to ports and customers, operations that are up and running in a few months, the ability to add short- or long-term capabilities, integration of WMS data to internal systems, value-added services (e.g., labeling, bundling, kitting), and lower costs and improved customer service.”
Best Practices to Maximize Agility and Value Derived From the TMS
- Avoid free, TMS light solutions. TMS light solutions are designed to provide minimal impact at zero cost. While these options can improve supply chain performance, they often lack long-term value. Furthermore, a TMS light solution is only slightly better than the existing operation, so it is only lengthening the inevitable.
- Collect data regarding supply chain execution and TMS efficiency around the clock. The TMS should provide an endless data stream that can be tapped to understand supply chain performance. If the supply chain does not exhibit key metrics that allude to increased profitability and efficiency, the use of a TMS loses its value. Thus, always choose a solution that can offer analytics embedded within the system.
- Leverage automation within the TMS to reduce redundancy and repetition in day-to-day activities, particularly regarding the generation of reports, sharing of information, and visualization of performance. In other words, let the system handle the primary management in information dissemination activities.
- Take advantage of robotics process automation to reduce manual work in handling minor matters. Robotics process automation capabilities can provide quotes to customers, answer questions, and reduce the amount of labor needed to manage freight. This is where the capability to truly manage by exception exists.