Unlocking the True Potential of Transportation Management System
By Jordan Kass, President of TMC, a division of C.H. Robinson
Maximize the Value of Your TMS Investment
You’ve likely heard about companies that have invested a lot of money, time and resources in implementing a Transportation Management System (TMS) only to shelve the system years later because they didn’t see the ongoing savings and efficiencies they expected. Maybe you’ve even experienced this situation first-hand. The emergence of the SaaS model is helping reduce time and effort that goes into implementing these systems, but even the most sophisticated TMS technology is ineffective without the talent behind it. Companies that leverage their own employees to power the TMS may have seen initial cost savings, but what if the employees who are power users of the platform leave? The company is left with a technology platform they can’t maximize and are faced with taking time and resources away from strategic initiatives in order to train new power users.
As you look for ways to maximize the value of your TMS investment, remember that the people and relationships behind the technology are essential to driving continuous improvements. Here’s why.
Merging Technology and Talent
Technology offers far greater value to you when operated by people who understand how to make the system perform. When a provider with the right solutions collaborates closely with you, your organization can obtain value far beyond a traditional vendor relationship. This is why a managed services model is so effective. It offers TMS software and third-party expertise in one package. The ROI on your TMS investment is driven by the seasoned transportation experts that possess the technical knowledge to accommodate strategic and tactical changes to your network.
"Tying TMS solutions to domestic freight networks prevents shippers with international supply chains from unlocking the full potential of these systems"
It’s possible to hire resources that could serve your network to that level. But that has its own challenges. The shortage of supply chain management talent is one the most pressing challenges facing the industry today, and it’s becoming harder and harder for companies to find and retain these in-demand professionals. Plus, hiring is only part of the equation. You need an on-going commitment to keep that staff well-trained, and if they leave, you must replace them and start the cycle all over again. When you choose a TMS provider that offers managed services, you can rely on them for the people-plus-technology approach so you have a consistent cache of expertise available.
Finding the Right Fit
Managed services solutions are adept at getting the most out of a TMS through a combination of technology and seasoned transportation experts, but finding a provider that has the necessary technical capabilities and expertise can be an overwhelming task. There are several key factors to help you choose the provider that best fits your organizational strategy.
When evaluating a managed services provider and the technology they deploy, it’s important you understand the technology’s ability to scale with your business growth. It’s equally important to consider key features such as analytical capabilities needed to execute your organization strategy such as optimization, procurement, event and exception management, freight audit and payment and business intelligence.
A TMS selection should be seen as a long-term investment and relationship between your company and the provider. Therefore, you need to have a clear understanding of the provider’s long-term roadmap for sustained (or increased) savings over time as well as a process for continuously identifying and achieving savings in additional areas. Also, what is their future technology and talent development pipeline, and does it meet your organization’s future growth goals?
Cloud computing has been a part of the TMS product range for some time now and applications of the technology continue to evolve. Understandably, the idea of sensitive logistics data being held somewhere in a cloud-enabled database raises a number of security concerns. Service providers must demonstrate that they have the proper controls in place to protect their customers’ data. Credentials such as Service Organization Control (SOC) reports are an important part of this effort.
Also, what is the technology’s global reach? Can it be deployed quickly in new business markets? Tying TMS solutions to domestic freight networks prevents shippers with international supply chains from unlocking the full potential of these systems. Additionally, does it have capabilities to utilize, monitor and analyze every transportation mode across the globe to drive savings and efficiencies?
A TMS provider with a managed services model becomes an extension of your staff. They should have a complimentary organizational culture, mission, and values to yours so they can work side by side with you and your team to drive savings and service level improvements and deliver other important results across your transportation network. Because managed services can transform your organization, your provider should have a record of long-term client relationships and collaboration.
Change Management and Successful Implementation
Integration and process transformation is one of the most challenging parts of implementing a new technology platform, and once again highlights the importance of combining people and technology to drive success.
A successful implementation includes a cross-functional steering committee of supply chain and IT counterparts. By having both the C-suite and this team collaborating with the TMS provider, you can strengthen the change management process and help ensure a future process design that encompasses all key stakeholders.
Key points to successfully implementing a TMS plus managed services solution include:
■ Top down support. Provides focus and ensures that corporate and transportation strategies are in sync.
■ Face to face workshops. In-person change management meetings help resolve any issues and build relationships that underpin success of the solution.
■ Define goals and expectations. Helps ensure quick responses when unexpected problems arise.
■ Measure and improve. Measure logistics KPIs to drive performance and cost savings.
Driving Ongoing Success
Your steering committee should evaluate the program’s success quarterly and prioritize improvement projects. Focus on a few vital and prioritized performance indicators, and make sure your organization is committed to ongoing, rigorous performance reviews.
As you evaluate the ROI from your provider, watch for key traits that can indicate whether or nor not your TMS provider can effectively drive savings year after year:
■ A proven set of management routines to evaluate data and bring solutions to improve carrier performance and supplier compliance
■ A culture of continuous improvement and best practice sharing
■ A proven plan for recruiting, training, and retaining talent
■ A roadmap for innovation and introduction of cutting edge technology
Make sure you understand what a prospective TMS provider can deliver in the form of short-and long-term savings. A combination of talent, processes, and a culture of continuous improvement is what will achieve sustained savings.
With continued global population growth and economic expansion in emerging countries, the need for global TMS technology continues to expand. Global solutions are notoriously challenging to implement. How to distribute products profitably to an extremely diverse, multi-national customer base is one of the most difficult obstacles facing global shippers today.
Marrying the expertise of local transportation managers with advanced global TMS technology helps companies achieve a local/global balance across their supply chain. Keep in mind that starting out with a tailored single global TMS solution is generally easier than trying to create a new one by patching together existing systems that may be scattered across multiple countries.
The value of the TMS technology is directly proportional to the expertise of the people using it. A TMS on its own cannot be relied upon to drive continuous savings. Instead, look for a TMS provider that incorporates highly trained people and proven processes. As competition heats up, more companies are engaging with technology providers to gain that competitive edge. How are you leveraging talent and technology to drive results for your business?