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

A New Fast Lane for Freight Management

Transportation Management System

We’ve received a lot of positive feedback on our tag line, “Get There Faster.” It’s been really interesting to see all the interpretations of what this means to different shippers or suppliers in the market place. Because of all the great feedback, I thought I’d write a bit on where the tag line came from, who inspired it, and what it means to us. 

Getting there faster – whether “there” is a physical destination or a specific target such as 98% on time delivery – speed has always been a driving force in business. I know, we have a global client base, and I can see some of you rolling your eyes at me, perhaps viewing this as uniquely American.

I’m not convinced, so before you quit reading, hear me out.

It is more than the notion of beating a competitor to the punch or improving last year’s figures. In talking with our customers, there is something bigger at work.

Two years back, I chaired a panel session at the Council of Supply Chain Management Professionals (CSCMP). The topic was best practices in managing inbound freight. There were several companies on the panel with different examples of how to solve this problem. Two of the panelists had opted for TMS software plus managed services, and they explained the rationale behind their decisions.

One of the companies, a fortune 500 global manufacturer of heavy equipment, possessed the technical expertise and resources to build and run such a system in-house. But the enterprise chose to use TMC’s Managed TMS solution. The enterprise decided that it would achieve its management goals faster by plugging into existing technology and core processes. Using infrastructure already in place enabled it to shorten both the learning curve and the implementation runway. At the same time – and this is important – it has retained control over its inbound freight operations.

Their argument wasn’2013-05-22 19:24:16’t that they couldn’t do it and do it really well — of course they could. Their position was they could retain control while better utilizing the sum of our mutual resources and thus get to their overall objectives faster.

In my opinion, that decision took guts and humility. It certainly demonstrated the stuff of great teams as they put their organizational objectives first.

A few months ago, I spent an afternoon with a key executive from a European packaging manufacturer with a worldwide footprint. They required a global freight management system. The executive felt that this was a true competency of their organization.

I asked him why they opted for our Managed TMS solution. His answer surprised me. He said most companies outsource what they are bad at and don’t necessarily view as a core competency. He went on to say that while global TMS plus management services wasn’t necessarily a core competency of theirs, he did believe they could be truly great at it. Therefore, he knew they could outsource successfully, better utilize their resources, and thus get their goals faster.

Starting to sound familiar?

These applications represent a slightly different variation on the “Get There Faster” theme. However, what’s turnkey is that it’s not just about a destination or one-off objective. It’s the acceleration these organizations have gained by maximizing the use of their resources through complimentary technology, core process, and expertise.

In other words, for some organizations the idea of speed is not only rapid implementation, it is using outside expertise to accelerate the development trajectory and capture the benefits of technology, core process and expertise more effectively. This may mean redeploying highly trained personnel so that they are engaged on more strategic tasks, thereby leveraging their expertise and bolstering the company’s bottom line.

Just a few years ago, these objectives would probably have required a company to hire talent and invest in high-octane software, and cope with all the ROI challenges associated with such a strategy. Now, companies like the ones described have a more powerful alternative.

A couple of points of clarification are appropriate here. First, although these examples illustrate the benefits of SaaS, that is not the main lesson. The important takeaway is that these enterprises have developed a new mindset. They have realized that it is no longer necessary to build their own organizational muscle in order to become a faster competitor. They can gain the horsepower from a specialist provider without relinquishing precious managerial control.

Secondly, Software as a Service (SaaS)-type solutions are miles away from what has become accepted as conventional outsourcing. Shifting production to, say, China to reduce headcount and cut costs is not the same as harnessing an external accelerator to increase market velocity.

We are very pleased to hear about our role as an accelerator. The possibilities are truly limitless and we believe this is just the beginning. The concept will transform the business landscape over the coming years —-software plus service is here to stay.