To capture the next jump-step improvement in operational efficiency, transportation companies need to look beyond their transportation management software (TMS).
To remain competitive in the transportation industry, paper logs just aren’t going to cut it any longer. If you’re in the business of shipping and logistics, there’s a good chance you use transportation management software (TMS). At this point, using a digital platform to run a transportation operation is all but a requirement.
TMS applications are great at what they do, but they do have their limits. And increasingly, transportation companies are coming up against those limits as they look to cut costs, gain efficiencies, and out-compete an increasingly crowded field.
TMS apps are by and large off-the-shelf — in other words, they’re “packaged software” whether they’re a SaaS or a standalone app. Again, they’re good at what they do, but as transportation companies seek outside-the-box solutions to last mile delivery challenges, they’re finding that their out-of-the-box TMS software wasn’t designed to solve all their problems.
In the same way that your average small business probably uses 10 or 20 specialized software solutions for different tasks, so too do transportation companies run different processes through different apps. TMS might have seemed like the end-all-be-all platform for the transportation industry at one point in time. Not any more. A small business wouldn’t ask their accounting program to function as an email client. Transportation companies shouldn’t ask their TMS to schedule preventative maintenance or re-distribute cargo in real-time.
Aside from lacking a number of functionalities that transportation companies and their partners are increasingly asking for, TMS doesn’t always integrate with supply chain management software (SCMS) or well-established ERP systems. They often lack the flexibility, extensibility, and interoperability to integrate relevant data sources that transportation companies and their customers need in order to make the most informed decisions.
TMS solutions typically aren’t built with full supply chain visibility in mind. A manager might have visibility over the full scope of his operation but lack the ability to share critical insights with the employees that need them. There’s a gap between what TMS can deliver and what logistics managers actually need to optimize their operations in today’s age.
Using a TMS is undoubtedly an essential tool for most transportation companies, but it’s time to go a step further. It’s time to ask yourself: Are you leveraging the potential of all your data? Are you increasing visibility with partners and customers? Are you able to make the best decisions right when they need to be made?
The State of Transportation Management Software
Transportation management software (TMS), which has become synonymous with the notion of a transportation management system, are essentially designed to help manage shipping and logistics operations throughout the supply chain. Fleet owners, shippers, logistics service providers can (and typically do) all benefit from the visibility that TMS provides.
TMS arose as a means by which to automate much of the information flow within shipping logistics and improve the decision-making process. These apps use historical data to automate and inform decisions around factors like costs, route-planning, and inventory forecasting. They’re about helping transportation managers plan ahead, execute, and deal with post-mortem administrative tasks like billing and compliance. TMS can help transportation and logistics companies track and monitor shipments, both for outbound shipping and inbound procurement; many will suggest optimal routes and calculate rates for particular shipments.
Ideally, a TMS will make the supply chain more transparent, break down silos between shippers, carriers, and other stakeholders, help avoid miscommunication, and foster better working relationships between partners. Above all, managers get better information and make better decisions.
Today’s TMS solutions have improved pretty dramatically since even two or three years ago. They’re faster to deploy, more mature, increasingly cloud-based, and accessible for even mid- and small-sized players. They can take multiple transportation types into consideration, including LTL, fleet, and small parcel. However, companies are increasingly finding that they need additional functionalities that fall outside the scope of their — or any — TMS.
The Problem with TMS
TMS software tends to perform well with what it’s designed to do, but its users can’t expect it to be an “everything” solution. That is, they can’t expect it to execute every possible directive or deliver 100% visibility. Moreover, they can’t expect it to integrate with every available data source that could be used to inform better decisions. And yet, transportation and logistics companies have a wealth of useful data sources from which to pull, including the following:
- Enterprise resource planning (ERP): This is an essential business process management software that integrates various applications and streamlines information-sharing between teams and functions at the highest levels of enterprise organizations. If nothing else, a TMS needs to coordinate with an ERP solution.
- Warehouse management system (WMS): A WMS helps control warehouse operations, including inventory management.
- Enterprise asset management (EAM): This includes data around the maintenance of physical assets, like trucks and trailers.
- Supply Chain Management (SCM): This is a series of software solutions encompassing product lifecycle management (PLM), supply chain planning (SCP), and other solutions around handling a product from manufacture to delivery.
- Customer Relationship Management (CRM): This software manages sales, prospects, marketing, and related tasks.
- Yard Management System (YMS): This software oversees the movement of trucks and trailers at a warehouse or distribution center.
All of these technologies aren’t necessarily designed to talk to each other. And yet, drawing on the appropriate mix of these data sources can offer clear advantages for stakeholders within the supply chain. In many cases, TMS products are locked in by vendor and not easily integrated with third-party solutions — which means a company may end up trying to implement several separate tools or find manual ways to bring data together.
At this point, just having a TMS platform isn’t enough to differentiate a transportation company from the competition. That’s just how the normal run of business is done. Now it’s time to recognize that the real functionality of TMS needs to be extended. With the right technology, supply chain visibility can extend to include customers, partners, vendors, and entire organizations. It matters how the information is delivered to decision-makers: the right technology and process adjustments can allow everyone to better respond to problems, capture new opportunities, and make smarter decisions, more quickly.
How to Improve Your TMS
In order to improve your transportation management process, it’s important to consider if your current options are going above and beyond. “Transportation management software” has come to mean essentially the same thing as “transportation management system” — but isn’t it time for a transportation management solution that boosts your capabilities beyond traditional approaches? A powerful situational awareness platform can act as a force multiplier, making the data at your fingertips infinitely more useful. Activating the full potential of transportation data with situational awareness platforms will serve as the next jump step in efficiency gains that supply chain companies are looking for.
What does the full potential of your data look like? It doesn’t just mean having all your data right at your fingertips. From ERPs to SCMs to TMSs to sensor-laden smart trailers, it means getting the right data at exactly the right time.
Equally powerful for logistics and transportation companies is the concept of shared visibility. End-to-end visibility gives all stakeholders up and down the supply chain the intelligence they need to make the next move — before their competitors do.
Perhaps most importantly, situational awareness platforms are designed for real-time decision making throughout the entire company. That means transportation managers and their employees can immediately troubleshoot slowdowns, locate shipments, and reroute cargo as needed. Customers don’t need to ask for status updates — they can view changes in real-time. Real-time visibility means better customer service, more contracts, more favorable terms, greater efficiencies, and the kind of operational transformation that takes a business to the next level.