How to navigate the TMS landscape (page 2)
-- Logistics Management, 2/1/2006
Some shippers have been able to virtually bypass the cost issue by accessing TMS applications offered by their 3PLs or freight forwarders. CIO Tom Madzy of freight forwarder SEKO Worldwide, says customers increasingly are taking advantage of his company's technology capabilities, which include a Web-based, password-protected TMS. "It seems we're more of a technology company than a transportation company these days," says Madzy, who adds that most TMS services are provided at no charge, making the option that much more compelling.
Whether a shipper invests in an ERP system that includes a TMS module, purchases a stand-alone TMS, or taps the resources of a third-party provider, there are several issues to consider prior to jumping in. Dawn Salvucci-Favier, director of solution management at Manugistics, says a good first step when evaluating a TMS is to gather a team of individuals who will be involved with the project on a daily basis.
The team should include IT department and company executives, as well as representatives from the finance, customer service, sales and marketing, purchasing, and distribution organizations—all of whom have an interest in implementing an effective, accessible TMS solution. "Everyone wants to know when will the goods get here and what the cost and service options are," says Enslow. "If I'm a customer service rep, I don't want to have to keep calling the transportation department and the carrier to find out if the shipment is on time. I want to be able to access that information via my Web browser."
Gonzalez says companies looking for a new TMS in 2006 should take current trends, such as the availability of on-demand systems, into consideration when evaluating vendors and solutions. By examining how vendors are responding to these trends in terms of their research and development, shippers can gain insights about the future value of their products prior to purchase.
"Similarly, existing TMS users also should evaluate their current solutions and vendors relative to these trends," says Gonzalez. "Ask yourself, 'Is my current solution out of date? Is it time to upgrade to a new version or a new application? Am I satisfied with my vendor's ability to innovate quickly, both today and in the future?' "
When shippers shell out money for a TMS, they want to see both tangible and intangible benefits, and they want to know just how long it will take to achieve them.
It's not difficult to document those benefits. Along with the cost savings that come from more effective transportation management, shippers that use TMS applications experience better service levels, increased customer satisfaction, and better tracking and control, says Jon Chorley, vice president of product strategy, supply chain execution, and PLM at Oracle. "TMS provide a good way to know what your logistics costs are, where your assets are, and what's going on within your network," he observes.
TMS can prove useful in unexpected areas and situations. Tracking and control capabilities, for instance, can help shippers deal with Sarbanes-Oxley compliance issues, Chorley notes. Better response to exceptions is another TMS benefit. A port shutdown, for example, can be handled more deftly when transportation information is at your fingertips, he adds. Continued...
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