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

Video: Use TMS Technology to Drive Cost Savings

Transportation Management System

Editor’s Note: On September 10 2013, Ryan Pettit contributed a blog post for Transportfolio®. We’re sharing his original post here because supply chain technology is always a relevant topic. Please share your thoughts and read the blog post, Video: Use TMS Technology to Drive Cost Savings.

If you’ve read some of my other posts on Transportfolio® or Connect, you’re probably familiar with my position on the importance of technology to your supply chain. Simply put, technology can equal cost reduction, if you have a collaborative relationship with your provider to help you use it. Today I’ll be specific and share how a single global technology platform like Navisphere® (that’s ours) helps thousands of customers improve their supply chain.

To better communicate how this works, we created a video.

*If you are having trouble accessing the video here, you can view it on our website.

Did you catch the two examples of how Navisphere helped customers reduce costs and become more efficient? With Navisphere technology, one client consolidated their air freight to reduce costs by 85 percent. And the technology platform helped another client shorten their 56 day order cycle to 20 days or less. Those are meaningful results, and they are not uncommon for clients using Navisphere.

Whenever I talk with clients about what they should expect from a TMS, I hit on five things to look for in supply chain technology. For truly transformative cost savings, all five characteristics are essential elements of an effective TMS platform.

  1. You need to be able to see and measure what’s going on. While visibility is an overused term in the supply chain industry, it is a critical component. To my mind, the type of visibility that matters to your supply chain is actionable knowledge or information. Visibility enables you to improve your planning efficacy, enhance organizational performance, and back up tactics connected to your logistics strategy. For example, end to end visibility to shipments lets customers eliminate gaps in their tracking data and break down technology silos between countries and regions. The result is a clear line of sight to savings opportunities. Capturing those savings requires effort, but you can do it when you start with the knowledge that there are savings to be had. The client that reduced their order cycle from 56 days to 20 days accomplished that through visibility. Supported by the ability to execute change, visibility to savings opportunities is the primary enabler for improved results.
  2. The solution has to be customized to match your needs and evolve with your organization. Customers often talk about needing a flexible platform configurable to their requirements. A technology solution wouldn’t work for you if, for example, you couldn’t customize shipment entry screens to your internal languages, or you didn’t have the ability to remove unnecessary steps to streamline the process. Built into Navisphere’s design is a basic belief that being able to tailor process helps eliminate barriers to change. A recent global client customized their process to support a modal optimization strategy while maintaining the process terminology familiar to each region. And I’ve seen this capability have similar impact in North American companies with multiple business units. When you can keep the familiar parts of your current process while enabling critical change, you can unlock savings opportunities.
  3. The TMS technology must be easy to plug in to your business, in every location. I’m sure many of you have been through exhaustive, multi-year enterprise technology projects.  Customers who have survived a grueling process look for technology options that reduce the need for big capital investment prior to achieving results. Supply chain leaders are routinely challenged to create change with limited capital investment. But less money to spend combined with increased expectations is a tough bill to fill. Like Navisphere, your TMS platform should provide multiple ways to integrate business processes while meeting your technology needs at multiple levels. This allows for cost savings, especially with limited up-front investment. Without this, you risk a significant investment prior to seeing any bottom-line impact.
  4. Your TMS should make it simple to connect with all of your suppliers in one place. One of the most undervalued assets a technology provider can share is a preexisting network of supply chain partner connections. For example, Navisphere allows customers to leverage C.H. Robinson’s technology investments and gain access to a centralized network of more than 100,000 supply chain companies. This eliminates the need to integrate with each provider individually. When you have access to all your supply chain information in one centralized location, you can better manage your logistics spend, foster optimization, and improve your supply chain productivity. Recently, one client I work with utilized automated visibility to reduce expensive late delivery and stock-out situations. The ability to push information about risk to the right audience without picking up a phone is critically important and improves your efficiency.  With a different TMS, a similar level of integration can cost millions in development and infrastructure.
  5. Look for a company that has made significant technology investments to reduce your risk. When you rely on a TMS provider, you are trusting that the technology is reliable, stable, and secure.  While experiencing a recent multi-day ERP outage, a CPG manufacturer relied on our platform stability to keep their perishable freight moving off the dock. C.H. Robinson meets this essential need for reliability through a risk mitigation strategy that guides technology development. Customers like you get a stable platform backed by an advanced Tier 3 data center with a tested disaster recovery program. It’s not enough for a TMS provider to just have a plan. They should be able to talk to you about how they execute their availability plan. As a publicly traded company, our data protection and security practices are routinely audited by an outside firm, so you know we take security seriously.

Wherever you’re doing business, I imagine you care about visibility, customization, integration, connectivity, and security. For our customers, we designed Navisphere to meet all those needs. I hope you like the video and reach out to me if you have any questions.