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

TMS Strategies for Delivering Savings and Performance

Transportation_management_systemLast week, I had the opportunity to speak again at CSCMP’s annual global conference, which focused on providing attendees with real-world strategies to maximize and transform supply chains. With 3,000+ attendees and 100 sessions at the event, the content addressed a wide range of supply chain opportunities and challenges.

TMC’s participation included two different panel discussions; one was an overview of our Truckload Leader or Laggard research with MIT, which you can learn more about in my previous blog post. The other session was an interactive discussion on how to build a transportation management system (TMS) strategy and utilize the technology to drive value in your organization.

As a positive for our industry, logistics and supply chain have joined the C-Suite conversation. While it’s great to have a seat at the table, supply chain leaders are now under increased pressure to deliver business enhancing performance, cost savings, and improved customer service. One of the keys is the application of a TMS.

Customer Case Study

A long-time TMC customer joined us on the panel to share their journey to a TMS. The company was opening a large distribution center and was consolidating the logistics networks of five warehouses into that one location. At the time, they were completely outsourcing their transportation operations to one provider and didn’t have the internal expertise to manage the lanes from the consolidated networks. They needed to move quickly and didn’t have the time to develop that expertise internally, as they were focused on getting the new distribution center up and running. One of the things they were looking for in the TMS plus managed services provider evaluation was the ability to have a menu of services to pick from. Like many shippers, a “one size fits all” solution did not fit their needs or strategy. They knew they would evolve over time but didn’t know exactly where, and having a provider they could grow with was critical.

All of their transportation activities were captured in one place, giving them visibility to important data like assessorial charges, procurement bid processes, and route guide compliance. In addition, they were an early adopter to a centralizing scheduling approach whereby TMC is able to schedule appointments much earlier in the order life cycle and hit requested arrival dates, improving customer service, and removing this decision making from the carrier. Change management during a TMS implementation cannot be underestimated. This customer emphasized that they greatly benefited from the option of having a TMC expert onsite to help them through that process.

Evaluation Considerations

We also highlighted the many different solution models that are available in today’s TMS marketplace. The growing complexity of supply chains has resulted in expanded options of solutions, often leading to confusion among shippers that are evaluating providers. As a buyer in the marketplace, really understand what the provider’s core services and target customers are. We live in an age where many providers say they can “do it all” and have very large aspirations, but can they deliver now?

For shippers that are going through a TMS evaluation or request for proposal (RFP) process, I have three considerations to keep in mind:

  • Talent: This is a big one. If you’re looking at an insource model where you operate the TMS in-house, do you have the talent infrastructure, career pathing, and learning and development in place to support the day to day operations of the technology? And don’t just think about your current state of talent. A TMS is and should be a long-term investment, so think about your organizational structure five years down the road, does that org design support insourcing?
  • IT availability: One of the biggest roadblocks we see on the front end of TMS programs, is related to enterprise resource planning (ERP) readiness and IT availability. Many times procurement and logistics teams are out talking to TMS providers, but haven’t included IT in the conversation. Shippers need to have awareness of potential IT projects that might have an impact on the TMS, such as the implementation of a new ERP, as well as have a base understanding of the current process within an ERP. Painting a realistic picture of your operating environment sets both provider and shipper up for long term success. It’s important that these systems are connected and talk to each other, so it’s better to engage your IT team upstream in the process to ensure alignment.
  • Realistic timelines and expectations: Everyone on the team needs to understand that a TMS implementation is much more than a technology rollout. It’s a transformative process that impacts multiple areas and platforms of the business. Make sure to level set a realistic integration and deployment timeline with your team that accounts for organizational readiness, as well as vendor selection and implementation.

With the advanced solutions available in the marketplace today, it’s important not to pigeonhole providers by dictating what you need. An alternative way to go about your RFP process is to provide your pain points and goals, and then allow the provider to recommend the solution they would bring. If you go in with an open mind, you’ll come out with solutions that you may have initially ignored that can bring long term sustainable value to your organization.  When you think of your RFP process, what is your end outcome? Is it to get the lowest price? Most perceived value? Or is it to figure out if you can work as a collaborative team with a provider? The RFP process is much more than a pricing and negotiation exercise; it’s a process to problem solve, design and collaborate. Teamwork is the true value of a Managed TMS partner in supply chain.

Download our paper, Choosing a TMS Plus Managed Services Provider: Making the Most of Your RFP, for more RFP tips and considerations.