The Role of the TMS in a Disrupted Supply Chain

The Role of the TMS in a Disrupted Supply Chain

In the last year, the world as we know it has changed dramatically. That is perhaps most evident in the way logistics and transportation networks have been forced to evolve. We’ve seen a massive shift from what was historically a product-push distribution model based on planning, to a customer-pull product phenomenon based on demand. Malls and stores are closing or scaling back while online shipments are rapidly growing. Customers have come to expect two-day delivery of goods as well as free returns, while many consumers are abandoning brands they’ve used for years in favor of immediate availability and fast home delivery.

So, what have companies done to address this ever-changing model?

As the pandemic took hold of the world, many businesses had a limited number of distribution centers that could handle e-commerce, which led to many of these companies finding themselves scrambling or unable to meet customer demand. One MercuryGate client was able to address the sudden shift in purchasing habits with some ingenuity, and the help of the cloud-based TMS. This large home goods retailer watched as its e-commerce product stock in their distribution centers was depleted, only to see their shuttered stores still full of products. Our SaaS-based transportation system enabled the company to pivot and start shipping out of their stores as local e-fulfillment centers.

The role of the TMS in this scenario doesn’t end there. That shift had a major impact on the shipping for local deliveries using parcel carriers. Parcel carriers were inundated at some of the larger stores. So, those parcel carriers began to limit the number of packages they would pick up. Businesses then turned to the TMS final mile network to leverage available carriers for local deliveries.

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Returns add to last years disruptions

Another big challenge that many businesses saw over the last year was the high rate of returns – sometimes as much as 30%, which isn’t uncommon in e-commerce. This means that not only do businesses have to deliver goods to customers quickly and cost-effectively, they also must have a way to pick up products for return and deliver them back to the right place. In fact, many businesses pushed out return dates through January to allow parcel carriers time to recover from the transportation bubble in November and December.

How final mile is adapting to the changes

A few years ago, final mile meant parcel, but with the massive shift to a pull economy more businesses are trying to avoid parcel if possible. Packages are being delivered by final mile providers instead of UPS/FedEx. USPS has been woefully slow in the last few months as demands crush their capabilities. Larger items no longer go to stores but are being dropped at a local delivery hub to expedite final mile to the consumer with branded delivery agents.
Final mile itself is a great microcosm of how disrupted the pull world can be. Once a route begins, appointments can change, return pickups can be added, consumers aren’t home when the driver arrives, traffic delays cause missed delivery appointments, and the list goes on. To handle these types of daily or even hourly disruptions, the system must be able to automatically analyze and assess the best course of action as the driver is moving and communicate those changes to the drivers. Systems use current information like traffic and weather to predict when drivers will arrive. Historical information is also considered as part of the analysis to prescribe routes or methods to meet delivery committed dates. Actionable data is presented to both drivers and consumers – think of the “your package is in your area” to “your package is 4 stops away.” Today we can even see where the driver currently is on the route as they near our homes. Communication and visibility to all parties is as important as execution, and customers have come to expect visibility throughout the delivery process. Automation is the name of the game here and that’s now pushing into all modes of transportation.

There’s more to learn about why the TMS is so critical in today’s disrupted supply chain

Our webinar The Role of the TMS in the Supply Chain: 2021 & Beyond hosts industry leaders from Moen, Translogistics, and Capgemini in a real-world discussion on stories about how they’ve adapted to manage disruption. During the webinar they also reveal how they’re achieving end-to-end supply chain visibility with the MercuryGate TMS.

Listen to the discussion with these industry leaders today!

Steve Blough
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