Is Transportation Management Your Core Competency?

When evaluating your needs for a Transportation Management System (TMS) it’s important to look beyond technology and consider who will manage planning and execution. How do you determine if outsourcing to a Managed Service Provider (MSP) will deliver greater value than developing an in-house team?

Making the Decision:

  • Evaluate your core competency— Is your expertise in transportation and logistics or in another area? To keep your focus on revenue generation and business operations, you may need to consider partners with capability and capacity to tend to other important details, such as delivering product on time, safely, and at the lowest total cost.
  • Leverage an MSP’s scale— Outsourcing to an MSP will most certainly afford you advanced technology at a lower cost. It should also enable you to tap into broader capabilities such as lower freight rates and technology-savvy staff.
  • Quick deployment— Your company needs the ability to tap into a network that is already up and running, and staffed by fully-trained industry experts. Look for a company that understands the value of a successful implementation and can deliver on commitments. Make sure they have a formal, documented on-boarding process.
  • Ability to ramp up quickly— Outsourcing managed transportation services enables flexibility by tailoring staffing to your needs (e.g. freight execution, freight audit, bid management). You immediately gain access to experts in each area.

Selecting the Right Partner:

  • Trust— You need to trust your MSP to make the best decisions on your behalf. Select a partner that you feel has your best interest at heart, aligns with your company’s culture, works to thoroughly understand your company’s needs and has a process to continually evaluate, adjust and improve. Always check references. Your provider’s service to their other customers is a key indicator of the service they will provide you.
  • Service— How and when your product arrives is the measure your customer uses to evaluate your performance. You need a transportation service provider that works as hard as you do. They are front line representatives of your company. Select a partner that understands their vital role and offers more than simply making phone calls to your carriers. A partner should provide solutions when your business faces challenges and optimize your transportation so you provide high quality, consistent service to your customers at a lower cost.
  • Process— Make sure your partner outlines the "how" and fully understands your current process and your business. Without a formal business review process, they are unable to do that. In addition, your partner should document the new process through new SOPs and routing guides. This defined process should outline your agreement so they understand decision-making authority, the process for the day-to-day activities, and how to handle exceptions.
  • Tailored Solution— In today’s environment, there is an abundance of technology platforms with very competitive offerings. Make sure to select a company that understands that your needs may not be out-of-the-box. Invest time with your partner by sharing your company’s goals and current business challenges. In return you should receive a solution that addresses your concerns and also supports your objectives. One solution does not fit everyone.
  • Knowledge & Agility— Finally, make sure your MSP is agile. Ask about hiring and on-going training to ensure their staff is current with the latest industry and technology trends. If the MSP does not understand the complex and dynamic nature of logistics, they will be challenged to answer your questions and advance your business. And then, they are just a software provider. You are looking for an expert, a true logistics service provider.

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