Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

Capturing the Hidden Value of TMS Solutions: Part 1

Transportation Management System benefits

Technology implementations tend not to be the favorite items on managers’ to-do lists. But transportation management system (TMS) projects should be the exception. These implementations provide unique opportunities to achieve improvements that were not previously on the company’s radar screen, or in the purview of transportation.  

At TMC, we use a four-stage process to implement TMS solutions: Investigation, Innovation, Integration, and Improve. The approach is not confined to connecting systems, but has a much broader, process reengineering focus. In this two-part series, starting with a look at the first two stages, we show why this process is unique and provides more value (ROI) for our clients.

Investigation has two main goals: scope definition/confirmation and current process documentation.  The first stage begins with the creation of a cross- functional team that represents all the parties involved in transportation at the client.  After this team has confirmed the scope and goals of the project, most of the time is spent walking through the transportation process from order entry to freight pay. It is usually an eye-opener discussion. Often, this is the first time that team members have all sat down together to explore these processes from beginning to end. In some cases they have never met face-to-face before.

While the stated goal of an implementation project may be to set up a TMS, projects like these often reveal underlying process issues.  For instance, as the discussions progress it often becomes apparent that functional silos within the organization are causing operational conflicts. Take, for example, the requested delivery date specified by a major customer. What emerges is that one group is focused on making sure that the customer’s loads arrive on the designated dates, while the overriding goal of another group is to ensure that the loads are shipped by these dates. The conflicting metrics can undermine service levels and even financial performance.

The process walk through isn’t about replicating existing practices; the aim is to improve on these processes.  The key to identifying and, most importantly, to taking advantage of these findings, is that every relevant party is represented at the early-stage gatherings. A common pitfall is that for various internal reasons leaders do not invite certain individuals to join the project, or some groups do not feel a TMS project will greatly impact their operations and opt out of participating. This can cause havoc later in the implementation when we find that certain elements or process steps are missing because these absent groups were out of the loop.

As we go through the various processes, shortcomings unknown to the broader team can come to light.  While talking through the truck loading process with a client, for example, their freight payment team realizes that an operational error in the system update process was causing issues downstream during freight payment.  While correcting this issue was not part of the project, the implementation presents a perfect opportunity to take corrective action.

This first stage involves more than gaining an understanding of the system requirements; the team also delves into the business and process demands that must be met. Investigation offers our first and best opportunity to expose processes that need to be redesigned or brought over into the new TMS setup.

The second stage of the implementation process, Innovation, can be just as revealing. In this phase we design the “ideal state” TMS and process to meet the needs mapped out in the Investigation stage. We also secure the project team’s approval for the design.

Innovation’s first step is to lay out the future process.  In addition to using the insights we acquired during the Investigation stage, we draw on TMC’s deep base and experience as well as industry best practices.  Before we get into great detail with the IT setup, we want to build a mental picture of the emerging TMS solution for the client using devices such as process maps, demos, and screen shots of the proposed system.

The client’s project team can wield the red pen and suggest ways to improve the system or make amendments. A key goal is meeting the client’s expectations without losing sight of the original scope of the project, and more importantly, to keep a tight focus on where the ROI is generated.  Often times we act as mediators by taking an objective look at the process and the needs of all the groups involved.  As a neutral party we can help strike a balance between the goals of individual groups while staying focused on the overall ROI.

Achieving such a balance is trickier than it sounds. Relatively small changes can be made without significantly altering the scope of the system. While helping our clients to negotiate such tradeoffs we also try to keep the broad project on track and aligned with the savings target.

As they address questions like these and navigate through the implementation process, participants learn a great deal about the operations they manage, and how they fit into the organization.  In fact, these opening steps can be a revelation for many people, because they realize that implementing a TMS teaches them far more than they expected.  Next week we’ll take a look at the Integration and Improvement steps of the four-stage implementation process.