How to Select a Transportation Management Solution

How to Select a Transportation Management Solution <br />

MORE TO THE STORY:

The TMS Revolution


Selecting a new transportation management solution (TMS), whether fully outsourced, hosted, or internally installed, requires much due diligence to pair functional need with strategic vision. Shippers can get the most out of their TMS solution and service provider by following five progressions.

Know what you need before you look for what you want. Identify current resources and capabilities, then look for TMS providers whose capabilities complement existing strengths and long-term strategies. Understanding existing operational gaps allows buyers to define future objectives and select a TMS deployment that best suits their need. Developing a shared vision, clarifying strengths and weaknesses, and understanding what an organization needs in a TMS provider are initial considerations that dictate future success.

Define project scope and expectations. Without a roadmap for steering new TMS deployments, shippers set themselves up for failure. Detailing requirements in advance, and confirming that service providers are in agreement with expectations and how services will be measured, ensures success.


Engage change management and obtain buy-in. Appointing a cross-functional team of internal stakeholders helps establish objectives and steer new TMS implementations in the right direction. This approach not only strengthens the change management process, but also ensures a future process design anchored by shared expectations and procedures across key functional areas. Getting senior leadership buy-in is equally important given transportation’s enterprise-wide impact on cost and efficiency.

Implement a successful program. Regardless of implementation speed, process change does not happen overnight. Shippers can help guide successful roll-outs by: creating a detailed roadmap that addresses headcount reduction, information technology integration, process redesign, and newly defined performance measures; identifying what the transformed organization will look like; executing all the necessary steps for a successful transformation (this may include configuring transportation management tools with existing technology infrastructure, training, and a conversion plan for reconciling potential overlaps between old and new processes); monitoring the transformation and comparing results to project goals; and incorporating an exit strategy.

Ensure ongoing success. The TMS service provider often becomes an extension of the enterprise— and should be treated as such. Evaluate ongoing performance with prioritized metrics and encourage further participation from project owners, evaluators, and implementers. Scorecarding productivity, quality, systems, performance, and overall customer service helps drive continuous improvement.

The TMS Revolution

The past 20 years have seen a seismic shift in the sophistication of TMS solutions. Here’s a look at transportation management systems’ evolution and trends, past limitations and future potential.

BUILD VS. BUY:

  • Tied up internal resources on non-core or non-revenue-generating projects.
  • High potential for scope and cost creep.
  • No commitment to ongoing development or R&D.
  • No immediate or sustained ROI.

TRADITIONAL INSTALL & DEPLOY:

  • Large capital investment and lengthy deployment.
  • Resource intensive.
  • Initial and ongoing ROI proved challenging.
  • Lack of integration across supply chain partners.

SOFTWARE AS A SERVICE:

  • Minimal capital investment.
  • Faster deployment, easier to demonstrate initial ROI.
  • IT and business resources required, but less intensive.
  • Increased visibility and tighter integration of supply chain partners.
  • Resources still focused on tactical operation of TMS vs. strategic projects.
  • Emergence of shipper and carrier community (via the cloud).
  • Long term ROI and full utilization of TMS capabilities still questionable.

SOFTWARE PLUS MANAGED SERVICE:

  • No or low initial investment.
  • Faster and non-disruptive implementation.
  • Less resource intensive.
  • Increased visibility and tighter integration of supply chain partners.
  • Immediate and documented hard ROI.
  • Resources shift from tactical to strategic projects.
  • Creation of virtual Think Tank.
  • Long term ROI, sustained savings.

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