How to Prioritize and Select Logistics Technology – SEKO Logistics
Technology is the backbone of today’s logistics systems, and shippers want to make the right choices for mission-critical systems. One key question is when to outsource technology development vs. managing it with in-house resources. It can be challenging to secure internal information technology staff to focus on developing and implementing essential functions such as transportation management, warehouse management, and purchase order management.
These three high-priority systems are typically outsourced, either directly or as part of a 3PL relationship that provides technology and customization. Shippers will face similar issues with emerging technologies that will enter the mainstream at some point.
Transportation Management System. A TMS delivers value in planning, decision-making, shipment follow-up, and KPI tracking. With a TMS, you can define the most efficient shipment schemes according to your specified parameters, and rank according to your priorities. Shipments can then be tracked using a status/event-driven design that enables you to select the best pricing, consolidate orders, customize and run reports, and audit freight bills. Contracted carriers are also integrated into the TMS; allowing them to tender shipments and specify routing. With the TMS tracking every event, you have true visibility into your Key Performance Indicators, supported by accurate reporting.
Warehouse Management System. A WMS enables your supply chain to maintain a tight and optimized inventory to reduce transportation costs, transit time and turnaround time to avoid shipment overlap. Using a WMS allows you to configure your supply chain for your business; enabling you to pinpoint the specifics of individual items, including data elements such as UPCs, vendor SKUs, min/max levels for replenishment, preferred storage/fulfillment locations, and weights/dims. It is most beneficial to use a WMS that features capabilities for asset tracking, lot control, barcoding, and kitting as needed to meet your requirements.
Purchase Order Management. If your company sources from five or more vendors, either domestically or internationally, a purchase order management system will help bring discipline to your operation.
Look for an outsourced PO management provider that delivers visibility within your supply chain and enables you to manage vendors by exception, with better control over inbound shipments and end-to-end visibility. Dashboards and reports deliver data-driven insights that help decrease shipping costs and keep production and delivery dates on track.
Emerging Technologies. Key technologies that are making their way into everyday application include artificial intelligence, Internet of Things, and blockchain. Blockchain has the potential to be the most disruptive to the industry status quo with data that is more secure and more available—removing friction from the system for all parties.
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How to Select a TMS
Selecting a TMS can have enterprise-wide implications. Here’s a list of items to consider in your decision-making process.
- CONFIGURABLE vs. CUSTOMIZABLE: Configurable means you can select parameters aligned with your needs. Customizable offers the most flexibility, but usually requires costly IT development work.
- INTEGRATION: Choose a tool that will integrate with existing systems such as your ERP and WMS.
- BUDGET: Do some due diligence to understand the investment required in human resources, hardware, and software.
- TIMELINE: Design and implementation will take longer than you think, so allow your vendors the time to do the job well.
- COMPANY: Vet the company for its culture and experience. A good cultural fit will help pave the way for a successful project.
- INTERNAL CULTURE: What is your appetite for change? Often, major IT implementations fail because the internal resources were not prioritized to ensure the project’s success.