The Value of Automation in TMS

Value Automation For TMS
Supply chain automation. It promises to alleviate concerns over data accuracy, free your workers to focus on customers, improve customer service levels through faster shipping, and reduce incidents deriving from poor visibility. In the digital age, the value of a transportation management system (TMS) depends on the ability to leverage the system’s full benefits and make meaningful improvements throughout the whole supply chain. According to AR Advisory Group, the return on investment (ROI) of implementing a TMS remains near 8.5%, but organizations push the boundaries of this value by maximizing the system’s use and understanding its relationship to automation in TMS through self-optimizing processes.

Driving Forces of Investing in TMS Automation

The driving forces of increased investment in technology systems that provide automation functions in TMS take root within basic business processes. Leaders in the logistics industry are tasked with doing more with less, ultimately creating greater efficiencies while also reducing costs. The automation of key TMS capabilities is also a relatively new concept in the industry. As the freight industry has advanced and become increasingly complex, some companies with annual freight spend between $20 to $50 million have lacked the resources and budget to invest in a TMS. It was often viewed as a costly and labor-intensive solution to address a major problem, especially as e-commerce rose to power. However, the same force that powered e-commerce—the internet—also powered a new generation of advanced TMS capabilities and functionality. As cloud computing became more widely embraced, companies of all sizes were able to reap the advantages of a modern TMS.

How to Leverage an Automated TMS to Drive Additional ROI

While platform users can continuously look for ways to drive freight optimization, a TMS that maximizes a combination of usability, power, and architecture will take optimization to a new level. Through software-as-a-service (SaaS) deployment models, companies can purchase a set number of licenses and avoid the issues with maintaining and operating a system as a software owner. This the first real step — invest in a SaaS-capable TMS.
The next step is more complicated. Users need to recognize what’s happening in their supply chains and take the steps to intervene before risks turn into disruptions. This benefit carries another name—analytics. Analytics empower users with actionable insights to derive more value. Of course, some users may opt for third-party analytics, and others want integrated analytics. Regardless, analytics and tracking data form the next key step in deploying an automated TMS platform.
Third, users need to rapidly complete onboarding processes. Implementation timelines do not have to carry a multi-month schedule. We dive into the myths surrounding TMS implementation timelines in more detail in this white paper titled , “The Shippers Guide to Transportation Management System ROI”, available via Supply Chain 24/7. Yet, dedication and an eye on the prize remain vital to maximizing investment. According to Ohio State University Logistics Professor Jim Hendrickson:
“Despite the need of companies to leverage modern technology to drive cost savings, new business models, and global management, many still struggle to achieve the full value of such initiatives. The takeaway here is that technology alone does not drive value. It requires buy-in, the dedication of time, and direct management.”
When it comes to getting the most out of the automated functionality within a TMS, be sure to take advantage of all resources, including educational materials and training. More training on system use gives users the power to reap its full reward, automating processes and reducing pushback. At the same time, intuitive system interfaces should use existing configurations to reduce time in onboarding subsequent carriers or creating new workflows within the TMS.
Manage by exception. Exception automation puts the TMS in control of situations that may occur and would normally result in an intervention. For instance, a weather delay is an exception. Using dynamic rulesets, exception automation could reroute the shipment and avoid the delay, ensuring freight arrives on time and in excellent condition. Exceptions may occur that require human intervention. By focusing on these unique, human-required interventions, users realize lower labor costs and more efficient management.

Deploy an Automated TMS Now

Leveraging automation in TMS will make your life easier. It is easy to deploy, offers intuitive, guided workflows, and leverages full transportation capacity, scalability, and resources to create Total Transport Leverage™. A comprehensive approach, including the use of automated in TMS functions, will maximize your investment, reduce TCO, and improve service levels.

Connect to find out more about what your organization needs to deploy an automated TMS platform today.

Bob Davidek
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