Since we started blogging more than a year ago about the transportation management system (TMS) that gives shippers global control of their freight operations (Control Tower®for Freight Management Catches the Global Train), the concept has gained a lot of traction. So it’s timely to take a step back and consider what it takes to create this fast-growing class of TMS product.
These systems, which include our own Control Tower® solution, manage global supply chain networks. They execute tactical operations and provide the visibility and information needed to lower costs, raise efficiency, and elevate the overall management of these networks to a more strategic level.
Not surprisingly, the concept is gaining ground because shippers can no longer afford to limit the scope of their management systems to domestic freight movements. But this is a ground-level assessment of what is driving the spread of the technology; to appreciate the bigger picture we need to take a much broader view of trade trends.
Increasingly we find that shippers’ freight strategies are framed by population growth. There are 7 billion people on the planet today, and this population is expected to reach 9 billion by 2040. Most of this growth is happening in developing countries, and shippers are getting ready to support these regions via their supply chains. Peel the onion further and you will find more layers of complexity. For example, over the next five years it is estimated that more than half of the world’s population will live in cities. Even remote areas – which now occupy only about 10% of the planet – are becoming accessible through modern-day supply chains. This all adds up to a new and expanding customer base for shippers.
As they develop distribution networks for this worldwide clientele, multinational shippers face a unique challenge that boils down to the idea of balance. They need to operate globally as efficiently as possible, but at the same time must be sensitive to local market nuances. Their logistics and supply chain processes need be attuned to local features such as language and culture. And they require a TMS that is not just an IT solution, but one that includes people as a critical component as well.
This is where solutions such as TMC’s Control Tower® come in.
However, given these complexities, freight managers can easily become intimidated by the notion of installing a multicountry TMS. A common fear is that the problems that already exist in domestic operations will become greatly magnified when the TMS is taken to a global level. Such fears tend to be overblown, particularly if you take a systematic approach to these solutions. To help you, here is a check list of tasks for creating a TMS with a worldwide reach.
- Develop a blueprint of capabilities within your current regions and where the gaps are. What is working and was isn’t in the regions?
- Based on this blueprint, identify how local offices define success and what it takes to be successful.
- Document regional logistics and process expertise.
- Create future state requirements and capabilities that map to the enterprise’s business strategy.
- Build consensus on what processes are used centrally and at the local management level. Some organizations choose to have one global process that all offices must follow, while others prefer a more localized approach. Make sure that the various stakeholders buy into the solution you select.
- Establish a governance process that enables you to fully exploit the advantages of a global control tower solution. These include the availability of true end-to-end supply chain metrics, integrated decision making and evaluation, and jointly developed process improvement and cost saving initiatives.
Global TMS solutions provide worldwide supply chain control and visibility in a centralized manner through people, process, and technology. These solutions are more challenging than traditional, home-based TMS suites – but only because they reflect the increasing complexity of the globe-spanning supply chains that support current and future corporate growth strategies.
This post is based on the WT100 webinar The Global Control Tower® – Managing Your Global Supply Chain. The authors were co-presenters of the webinar along with Pete Mento, Director, Global Customs and Trade Policy, C. H. Robinson Worldwide, Inc. A replay of the webinar can be found here.