FOUR WAYS TO INCREASE THE VALUE OF YOUR TMS
A transportation management system (TMS) has become an essential tool in an increasingly complex and competitive transportation environment. Whether employed by the shipper or a third-party logistics provider such as DHL, a TMS can reduce transportation costs, improve performance and increase customer satisfaction.
Realizing the full potential of a TMS requires a simultaneous focus on strategy, execution, and refinement.
- Is the strategy that underlies the TMS sound and up-to-date?
- Does the team operating it have the required knowledge to execute the strategy and access the full functionality of the system?
- Is the system able to deliver the necessary visibility to improve performance?
Often, shippers can answer one or two of these questions positively, but not all three. So, the first step in increasing the value of a TMS is reviewing these three areas to ensure you have a solid foundation. Then, you can begin to explore opportunities to expand and amplify that value by closing information gaps, improving response times and uncovering new opportunities to reduce costs and strengthen service. Here are four strategies that can help build on the value a TMS provides:
1. Consider the Human Element
While a powerful tool, a TMS is only as good as the people behind it, and it can only optimize within the confines of the information that is available. For example, if procurement has awarded business to primary, secondary and tertiary carriers based on capacity, service and cost factors, but the TMS system is loaded to tender to primary first and then lowest cost provider thereafter, it can disrupt the entire solution and end up costing more because the selected carriers will not receive their intended allotment of business volumes. An experienced team will regularly evaluate data to identify issues such as this. Through regular review of TMS data, they can also identify possible network optimization opportunities that the TMS is blind to, such as fleet backhauls, roundtrips or continuous moves, or mode shifts not previously uncovered in the original solution design.
Putting a TMS on “autopilot” can create an overreliance on automated processes that don’t adequately account for the dynamic nature of transportation. The knowledge and experience of the team developing the strategy and using the system is as important, if not more so, than the technology itself.
2. Expand Your View
Your TMS may provide track-and-trace capabilities for products as they move through your network, but that’s no longer enough. What happens when a product is transferred to a carrier outside your network at a crossdock or received at a temporary location prior to final delivery? Integrating the TMS with a visibility platform, such as MySupplyChain, a tool developed by DHL, provides real-time visibility of products from carriers and fleet using real-time in-transit updates from GPS data aggregators.
In addition to providing real-time visibility from origin to final destination, these platforms leverage predictive analytics to enable management by exception – focusing time and resources on late and off-schedule loads that threaten to disrupt operations or frustrate customers. With advanced knowledge of off-schedule shipments, shippers can make more informed decisions to minimize their impact and proactively inform customers of potential disruptions.
3. Connect to the Supply Chain
Data silos are the enemy of the connected supply chain. By integrating TMS data with other internal data sources, such as ERP and WMS, you can gain near real-time visibility into products from purchase through inventory and transportation.
This connected view of your products through the entire supply chain can now be realized through a single portal that receives data from multiple sources, consolidates it and presents it in an easy-to-use and searchable cockpit that serves as a single point of reference for tracking visibility across the supply chain. It can also deliver userdefined notifications that facilitate faster issue resolution and more proactive customer communications.
4. Use Third-Party Data to Mitigate Risk
Political instability, climate events and a host of other factors create uncertainty in transportation that can lead to expensive delays and lost shipments. Through risk management platforms that combine big data and machine learning, transportation managers now have the ability to predict disruptions before they occur while also simplifying regulatory compliance across the supply chain.
A risk mitigation platform provides a multi-tiered view of suppliers and logistical locations, as well as products, parts, “value at risk,” and other attributes, while simultaneously capturing the logic of specific network interdependencies. Visualization capabilities show the status of a supply chain in an intuitive manner through an interactive world map that simplifies the task of identifying potential disruptions relevant to your supply chain.
A TMS is an essential building block in a connected supply chain, but, by itself, is limited. By integrating the TMS with other data sources and new tools that take advantage of big data and predictive analytics, you can drive greater efficiency, gain real-time visibility into product movement from the warehouse to final delivery and respond faster to unexpected events.