Human civilization once viewed the supply chain as a simple, easy-to-understand process. One person provided a resource, such as steel, to another group of people, who then sent along the items to the final person in the chain. However, civilization took a drastic step forward, and billions of people today are involved in obtaining goods, which equates to millions of businesses of all sizes. Yet, shipping remained similar to archaic supply chain practices until the advent of the digital age and the TMS provider.
The greatest concern for businesses is their ability to obtain a high return on investment (ROI), especially in the last step of business—shipping. Third-party logistics providers, or a 3PL service provider, have worked to help encourage efficiency within the shipping process through the use of a Transportation Management System, or TMS.
NOTE: Not all 3PLs, like Cerasis, provide a TMS they have built themselves. Ask questions about the TMS that the 3PL offers such as:
Unfortunately when it comes to TMS, the majority of businesses—taking into account the staggering volume of small to mid-sized businesses—continue to operate without the use of a TMS provider, which equates to losses in efficiency, time, and money. To understand how a TMS can benefit a business, you must begin integrating TMS into your current operations.
Recall that many 3PLs provide a TMS for business applications. Ultimately, 3PLs are typically responsible for the integration of a TMS into an existing or new business. However, business owners or operators have a duty to ensure optimal integration by opening the ethereal books of their business.
According to Forrest Burnson of Software Advice, an organization that matches supply chain software buyers with vendors, small businesses are willing to spend up to $30,000 with a TMS provider for the successful integration of TMS into the business. This represents a sampling of 200 business owner responses—100 of which were small to mid-size businesses and 100 were large businesses. Business owners must answer the following questions to determine if integration with a 3PL TMS provider is available:
We have not answered your questions yet as you must consider these above-listed aspects of your business before considering TMS integration. Ultimately, TMS system integration is the process of combining your existing systems and business practices with an automatic—in most cases—TMS System provider to promote your continued growth and development of your business. The issues surrounding TMS system integration logistics are easily confounding, and too much time spent on how it works can result in turmoil, abandonment of the desire to integrate, and even lost customers due to rising customer expectations. For example, a package becomes lost due to a driver error, which results in an angry customer and lost money on your part, if you do already guarantee a refund. To help you navigate how integration works, we have organized it into the following four categories: Consultation, Evaluation, Implementation, and Performance Evaluation.
When you begin planning for the integration of a TMS, you need to do some homework about the planned system integration. However, you are not left to your own devices of scouring the internet or calling “frenemy” business partners for advice. The consultation is the period in which you reach out to a TMS provider, such as Cerasis, who will then request all of your information regarding your current systems. In fact, you can download the brief pre-consultation questionnaire here. If you are unsure about an answer, provide any information that you feel is relevant to the question.
Once you have completed the questionnaire, you enter the Evaluation stage of TMS integration. Evaluation refers to the time period in which the TMS provider will review your current systems and determine how your current systems will fair when combined with the web-based TMS. By isolating potential problems in your current system, you can gain a comprehensive view into what must be done to fully integrate your systems.
Once approved by the TMS provider and your team, if you are using a provider with a customer service-based approach, you will begin the process of integration. This could be as simple as installing TMS software to your business computer, accessing via a simple username and login on the web (like the Cerasis TMS), or it may be as complex and a system-wide reboot of your database. As more businesses make the decision to engage in such integration, the integration implementation efforts to complete the process will be less of a hassle and reflect a positive return on investment more quickly.
Performance Evaluation is the step in which you begin using the new TMS. This is simply to help you identify any key issues you would like to address, such as the use of bar codes or radio frequency identification (RFID), which is quickly becoming the most sought after aspect of TMS integration.
With the shipping industry’s potential for expansive capital gains or losses due to efficiency versus inefficiency issues, lacking a TMS System can mean the difference between success and “getting by.” 21% of large businesses and 9% of small businesses are using a system from a TMS provider to boost their ROI. Rather than thinking about it as a numbers game, think of it as a group of ten businesses. Do you want to be number one or two in line, or would you rather fall somewhere behind? Integration into Transportation Management Systems is a partnership where all parties win.
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