What is the value of an automated TMS?
ARC Advisory group study reports that 63% of companies would see a 5% increase on total freight costs if they had to give up automated TMS and revert to manual transportation planning and execution processes. In that same study, 23% of those companies expect an increase of 10% or more in those manual circumstances.
According to ARC, a TMS achieves these savings based on process enforcement, visibility, analytics, and optimization, with virtually no other supply chain solution offering so many different forms of optimization.
As the level of automation in TMS has risen, that statistic has increased. The proof lies in the sheer increase in the volume of shippers and carriers using a modern, smart TMS to add value. Automated logistics processes have the ability to really accelerate execution and achieve higher productivity and value across the transportation network – especially in today’s disrupted environment.
TMS automation value starts when it becomes an expert system
The real value is when the TMS starts to become an expert system able to learn and adapt to things as they occur.
The transportation department is no longer dependent on key individuals to accomplish tasks. The system understands the transportation requirements of the goods and automatically routes appropriately to accommodate products moving. This embedded knowledge allows anybody to run the automated TMS, freeing up expert users who can now handle more business because their talents are focused on dealing with potential exceptions before they become situations with the system recommending a resolution.
How to satisfy demands and constraints of goods with automated TMS
The embedded nature of the transportation constraints and information enables the system to understand what needs to happen and when it needs to happen.
How does that accelerate and automate the operational use of the system?
One MercuryGate customer loads weeks of data to consider in a transportation plan. The plan can involve direct shipments, zone-skipped shipments, multi-pick and drop continuous moves, etc. all in a single plan. The orders load into the smart TMS, which then automatically applies the transportation rules and automatically builds loads to satisfy the demands and constraints of the goods including compatibility, delivery needs, customer requirements, etc.
Some loads are completely built while others are only partially built; then freight is added as more orders enter the system over the coming days. The tender process automatically tenders to the carrier(s) when appropriate. Should a carrier reject the tender, the system can automatically tender to subsequent carriers, including a digital freight carrier whose guaranteed rate automatically appears in line with the other rates at the appropriate rate position.
As the freight continues through the process, if any exception is predicted or occurs, the user sees that exception on their dashboard and is directed to take the appropriate action. This is an extremely powerful way to execute an automated, predictable transportation plan.
How disruptions escalated automation process
We’ve come a long way from the depths of April/May 2020. From large numbers of blank sailings, to record throughput of ports. From the lowest number of tenders in years, to record tenders in the fourth quarter of 2020. The major disruptions hopefully are behind us. While many businesses have adapted to the big disruption of COVID-19, smaller disruptions continue to occur every day with limited capacity on some lanes driving a high number of tender rejects.
Shippers are protecting themselves with guaranteed rates from digital freight partners to provide capacity on specific lanes when their normal carriers are unable to perform the moves. Procurement events are now building in digital freight providers to insulate the supply chain for periods of demand or restricted capacity and some even replacing traditional carrier networks with an all-digital alliance of providers.