The overwhelming majority of motor carriers and shippers use a transportation management system (TMS) to gain insights into supply chain management and keep freight spend under control. According to Sean Kilcarr of FleetOwner, the statistic has risen from 62% in 2005 to 91% in 2018. Unfortunately, “only 33% of motor carriers operating under 10 trucks are using TMS, the poll found, while just 17% of those using under five trucks deployed such technology. The lowest adoption rate for TMS software is among single truck owner-operators, with only 7% of those polled saying they used it to manage their one-truck business.” With that in mind, shippers and carriers of all sizes need to know a few things about how a unified TMS solution helps overcome challenges in managing freight, its benefits, and a few best practices to maximize success.
The State of Transportation Management Systems, Current Trends, & Key Benefits of a TMS
Challenges of Poorly Connected TMS and Supply Chain Management Platforms
It is possible to manage freight without a unified TMS solution. However, significant challenges will occur as volume and complexity increase. In fact, a past post on managing transportation noted how some shippers may choose to go the “Excel” route and managing freight and creating custom formulas. But that is a nightmare when applied across hundreds of shipments. What happens if the system felts, and what about the continuous updates from Microsoft that threatened to corrupt files? It is too risky to continue operating with a manual-based mindset. Moreover, paper-based and manual systems limit the ability to rapidly increase or accommodate changes in both volume and complexity. With today’s supply chain growing more connected and reliant on lean, just-in-time inventory management, it is a major problem waiting to happen. Those problems become even more severe when attempting to work with more carriers and companies that do not necessarily make their freight rates widely known. Remember that most carriers fall into the small-size group, so it is impractical to approach supply chain management without a connected, unified TMS solution.
A Unified TMS Solution Adds Value to the Supply Chain
A unified TMS solution is an essential tool in the effective supply chain manager’s software lineup. Unified solutions immediately increased visibility into all operations, and by leveraging next-generation connectivity, shippers gain the ability to make more informed decisions. More visibility will always add value to the supply chain, recognizing the risks before they come to refresh and, considering how market influencers may lead to the rapid sway of freight rates, and allowing for broad scalability. Most importantly, the top benefit of unified solutions is also the simplest. It makes everything easier, and integration via a unified TMS solution is much easier now than historically possible, explains Leon Kohlen via Logistics Viewpoints:
“Integration can be a big hurdle for most TMS systems. For instance, according to the Transportation Planning and Execution Benchmark Study by American Shipper, 61 percent of respondents said the biggest challenge of their TMS was system connectivity. And yet a TMS is only as powerful as its connections.
If your TMS has a unique and modern design, the phase of your implementation during which you on-board customers, carriers, and trading partners should be faster (and therefore less costly) than TMS systems of the past. As a result, you save money and time with simpler and faster set-ups – and your customers do too.”
Best Practices for Unifying Your TMS and Legacy Systems
The best path to a unified TMS solution lies in understanding its wide-ranging capabilities and how they rely on data. To achieve this goal, shippers should follow these integration best practices:
- Focus on the long-term goals for your TMS, including expansion of other supply chain management systems.
- Evaluate ROI for implementation of a unified TMS solution, especially as it relates to the current state of the supply chain.
- Avoid unnecessary modification of the TMS, leveraging proven, off-the-shelf capabilities first before making added changes to the system.
- Use APIs to connect the TMS.
- Connect existing and new technologies, including RFID sensors, IoT-based data capture points, Bluetooth, and more to the TMS.
- Take advantage of a cloud based, unified TMS solution, reducing the IT hassle of hosting the TMS and maintaining the system.
- Choose a vendor that works with your company to integrate the system and gain the most benefit.
- Conduct robust testing to evaluate the performance and capabilities of the system prior to the go-live date.
- Embrace vendor-provided training resources to help your team get going with the system and maximize its value.
- Keep the system updated, running vendor-provided updates as they are released.
Deploy the Real-Time Capabilities of Unified Systems Now
There has never been a more pressing time to gain real-time access and visibility into the supply chain. Shippers need to start working on connecting supply chain systems and let the TMS demonstrate its true value as an end-to-end solution for better logistics management.