According to Arc Advisory Group’s brief, Return on Investment (ROI) is driving next generation TMS software adoption, “…a transportation management system helps companies efficiently, reliably, and cost effectively move freight from origin to destination. Failure to transfer goods to and from a destination on time can lead to significant losses in revenues, as well as customers.”
However, as TMS is an important investment for the company, both from a financial and organizational point of view, the follow-up question “What is the ROI of a TMS?” is a natural one.
Let’s take a look at 5 areas that are driving TMS Software Adoption and the drive towards ultimate ROI.
1. The Omnichannel Retailer Needs Support
No longer able to compartmentalize their various business channels, today’s retailers need help running seamless, omnichannel systems that incorporate bricks-and-mortar, online, mobile, catalog, and other sales channels under a single umbrella.
2. TMS Software Can Handle Tactical Planning
Historically, a TMS is a great tool for determining the best way to ship, say, 2,000 orders over a 24-hour period. But larger shippers want more than just a deterministic view of how to ship those orders—they want to also be able to do effective forward-looking planning.
Below is a great look at TMS software adoption across industries. We find the Less than Truckload freight management aspect managed thru a TMS interesting. We find it also interesting that LTL shippers seem to be after the lowest cost carrier. Cerasis offers a TMS, the Cerasis Rater, to aid surface mode shippers to get a broad range of carriers so that shippers can choose the lowest cost carrier as well as manage parcel and full truckload moves in the same system.
3. Embedded Analytics in TMS Software are in High Demand
Bombarded daily by terabytes of digital information, shippers need a way to wade through the data, select its most useful components, and then use that information to make the best possible transportation decisions.
TMS software that effectively embed analytics—help to discover rich and meaningful patterns within the data—will remain in high demand. A TMS that includes carrier scorecarding, for example, should be able to cross-pollinate that rating information for application during the vendor-selection process. Embedded analytics allow shippers to come up with useful key performance indicators and actually consume and utilize the data as they go about their other activities.
4. Shippers Want TMS Software that Helps them Utilize Backhauls
Shippers are particularly interested in not hauling empty trucks back to their DCs after the goods have been delivered. They want to be able to utilize their networks more efficiently, and they’re looking to their TMSs for help in this area.
And while some of the more established vendors have historically incorporated backhaul capabilities into their platforms, the challenge lies in tying carrier contracts, agreements, and negotiations into the equation. If a shipper can get through those hurdles, there will be a lot of savings to be unlocked on the backend.
5. Planning and Execution Could Get a Place at the TMS Software Table
Right now, TMS vendors are looking for ways to better tie planning and execution systems into their platforms. Traditionally, those systems have operated within their own silos—and with no tie-in to transportation.
Infographic: A Cross-Industry Look at TMS Software Adoption
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