Why Mid-market Shippers Should Leverage TMS
Q: Mid-sized firms are often stretched for resources. How can they better manage transportation?
A: Many mid-market shippers manage transportation "by avoidance." They know they could be doing it better, but don't have the time or resources to focus on it. There's always a fire somewhere, and if product is getting out the door and to customers without too many complaints, they will go fight the fire and let transportation take care of itself.
But like anything else in business, transportation does not really take care of itself.Surprises can eat into margins. Shippers experience delays in manufacturing or shipping because they don't know where their inbound materials are. They get hit with customer chargebacks because, for example, someone at the warehouse quit and nobody else knew they were supposed to use a specific carrier in a certain lane. Transportation issues now demand more time and attention.
Mid-market shippers should consider Software-as-a-Service (SaaS) transportation management systems (TMS) that can improve visibility, provide reporting, and enable EDI carrier integrations while automating the transportation cycle. Ideally, shippers can align with providers who not only bring technology that can be quickly deployed, but also have internal resources to leverage the resulting data, and provide procurement best practices and, potentially, even outsourced operations.
Q: What does it take to implement a TMS?
A: TMS is a proven solution, but getting a system up and running, even on SaaS platforms, can be daunting. It takes time to gather requirements, select a provider, configure and integrate the system, train staff, and drive the behavioral change required to adopt the technology.
Finding the necessary IT resources is frequently the pinch point in the TMS acquisition process, and it often goes beyond the mid-market. Shippers should work with TMS solutions and service providers who can demonstrate proven tools and processes to reliably integrate a TMS, including providing ongoing user support and analytical services that help interpret the data that can now be captured for continuous improvement. You don't usually get analytics or the expertise to interpret transportation network data from software providers; this is where software and managed services models converge to extract more value from the system and deliver more value faster to the shipper.
Q: What is the best way to get the benefits of a TMS?
A: There are at least two good ways, and which direction you go depends on many factors, including your corporate strategy, culture, and investment priorities.
A true provider partnership approach can be very effective, particularly at the upper end of the spend range. In a co-managed model, the transportation management firm acts as an extension of the shipper, providing a suite of services that enables access to technology, while providing savings and enhancing control.
The second, more traditional model can also be effective if it fits the shipper's strategy. Fully managed logistics services are a proven way to obtain the benefits of a TMS. In this case, an experienced transportation management provider delivers access to leading-edge systems and operational best practices to manage your transportation.