June 2010 | Commentary | IT Matters

The Power of Flexible Transportation Management

Tags: Transportation Management Systems (TMS)

Geoff Comrie is CEO, Transite Technology, 919-862-1900

A primary concern for shippers today is how the recent economic downturn will increase transportation expenses. Capacity will continue to shrink as the economy strengthens. Many carriers are no longer in business, and with 3PL and carrier consolidation, there is concern that service offerings will be less flexible. Shippers want to reduce transportation costs and streamline business processes through better transportation management.

Investing in transportation management systems (TMS) can be expensive, and shippers may find that some options are inflexible, proprietary, or not easily scalable. Some companies find previous technology investments cannot handle the demands of a growing or changing business. They are shackled by the very technology they implemented to help them.

A NEW BREED

A new breed of more flexible transportation management platforms is well-positioned to meet the ever-changing needs of shippers, 3PLs, and carriers. These flexible systems are typically not on-demand, because the level of flexibility and customization they offer is difficult to achieve. Rather, the majority of installations are on-site so that they can be easily adapted to fit a company's internal and market-facing needs.

This flexibility allows shippers to cost-effectively purchase just the TMS functionality they need, instead of buying an entire system and only using certain functions. These new systems are also capable of integrating with existing and legacy systems in which a firm has already invested.

A flexible transportation management platform provides core complex transportation management components—such as extensive contract management, pricing, rating, and security administration tools—that companies do not want to spend internal time and money developing.

With a flexible TMS, companies can dedicate IT resources to developing applications for achieving their goals. The critical piece to a strong and flexible transportation management system is the quality and adaptability of these core components: the ability to integrate with other systems, and produce quality data used by finance and other functions.

USING SUPPLY CHAIN KNOWLEDGE

The flexibility these platforms offer acknowledges that companies have become increasingly sophisticated in their ability to internally develop and apply information technologies to obtain the most useful data and knowledge. Data-driven management across the supply chain has become a recognized way to gain a competitive edge, raising the importance of custom applications and seamless integration with other systems.

Flexible transportation management, when utilized to its fullest, becomes a powerful weapon in helping a company achieve its objectives, particularly when it takes steps to integrate inbound and outbound transportation throughout the supply chain management process.