Global transportation management systems (TMS) are gaining ground, but many shippers are finding it difficult to transition their solutions to the world stage according to a new research report from the publication Supply Chain Digest.
The Benchmarking Global Transportation Management Strategies and Practices 2013 research report is based on a detailed survey of Supply Chain Digest readers. There are more than 300 respondents in the survey including many well known companies. Some 68% of the companies/divisions employ more than 1000 people.
Almost 42% of the organizations say they are thinking in a truly global fashion for transportation, while 56% maintain that they’re in the early stages of this attitudinal change. This represents a “pronounced shift in the last 2-3 years towards are more global approach, especially in efforts to enter emerging markets,” the researchers observe.
While the transition to a global outlook may be underway, however, there is still a long way to go before the organizations reach this destination. A mere 12% of the respondents have a single global platform, for example, and only about one-third are developing transportation strategies globally.
One of the barriers cited by the researchers is that relatively few TMS providers offer the functionality and/or scope to support most of the regions and countries covered by worldwide freight networks. Respondents were asked to rate the biggest weaknesses of their current TMS solution, and the top three were planning complex moves (23.8%), international moves (18.8%) and optimization/load building (16.3%).
The researchers conclude that in reality “most TMS solutions have been developed with a domestic focus.”
It’s perhaps not surprising then, that many companies in the study believe that they are not far advanced in global transportation processes, and especially technology. Fifty-eight percent of the respondents say they are average or worse in terms of process; more than 73% say the same about their technology support.
How can shippers overcome concerns like these, and propel domestic-based TMS solutions into the global arena?
“A common fear is that operational and managerial problems already experienced in the domestic freight network will become greatly magnified when the area of operation is expanded internationally,” says the white paper.
Some shippers try to develop hybrid solutions that provide a robust TMS platform for the core region only. A truly global TMS avoids such messy compromises, with single rather than patchwork solutions that are tailored to the company’s business needs.
To help you build such a solution, here are seven keys to successful global TMS implementations. For a more detailed account of the keys see the full listing in the white paper.
- Top-down support. Executive sponsorship and alignment on all managerial levels are crucially important for these projects.
- Opt for a conservative roll out. Take more time up front to get it right; rushing the implementation can create problems.
- Use face-to-face workshops. In-person meetings to map out the business case and requirements are far more effective than on-line discussions.
- Define regional goals and expectations. Clearly defining expectations at the regional level helps to overcome unexpected problems.
- Prepare for a multi-cultural experience. Keep in mind that developing a common language for managing transportation is a hugely fulfilling accomplishment.
- Unlock the power of centralization. Leverage the global TMS to centralize business practices across functions and to develop a unified voice for transportation management.
- Measure and improve. Don’t underestimate the power you will have to measure logistics KPIs internationally and to drive performance improvements and cost savings.
As the white paper points out, implementing global TMS solutions is a challenge, “but only because they reflect the increasing complexity of the supply chains that support global growth.”
And there are substantial payoffs. With these solutions, “companies can define their differentiation in the market, positively impact and use their supply chains, and improve customer satisfaction on a worldwide basis.”
These are impressive returns by any standards, and ones that should encourage companies to make the move into global transportation management.