The Top Do’s & Don’ts of Effective Transportation Management

Posted by Peter Nilsson on Mar 25, 2019 9:48:24 AM

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Transportation management was once straightforward: Order management systems grouped batches of orders into origin-destination pairs based on delivery dates, then sent order releases down to the transportation management system (TMS), which had the sole function of accepting that input and releasing the batch.

A lot has changed since then. Between global competition, high consumer demand, and the rise of multi-enterprise networks, businesses are realizing this legacy method is insufficient to handle the supply chain industry’s growing complexity.

If you need a more effective and efficient way to manage transportation in the modern supply chain, here are several do’s and don’ts to consider:

Do prioritize flexibility in your transportation management system.

Today, change is the only constant. High consumer demands have driven shorter and shorter product lifecycles, which means businesses can’t rely on the same suppliers and carriers. Partnerships, and networks in general, must continually expand and adapt to meet regularly changing needs. As such, it’s vital for TMSs to be highly flexible and configurable to accommodate rapidly evolving networks, as well as transportation and fulfillment models.

Don't accrue software to achieve a multi-modal TMS.

order-centric-tms-bodyBusinesses are often too preoccupied with improving the functionality of one component at a time. They tweak inefficient areas and cobble together disparate solutions in the hopes of creating a multi-modal “suite.” Fragmented architecture impedes timely and well-informed decision-making and a consistent user experience. Rather than opt for quick-fixes, businesses would do better by investing in a modern transportation management system which is natively multi-modal, multi-leg, and global.

Do rethink underlying frameworks.

Ironically, though technologies have advanced, old frameworks prevail. Many transportation management systems in use today, even those that use APIs for integrations and run in the cloud, reflect ‘90s-era, batch-oriented applications whose architecture was conceived before these supply chain revolutions. They lack the type of flexible business models needed to effectively manage dynamic networks and the demands of global trade.

Don't let silos form during mergers and acquisitions.

Realizing the need for change, some businesses tend toward a mergers and acquisitions strategy. Companies join forces or subsume entities in the hopes of gaining their strengths or acquiring entry into new markets. While there is certainly potential to attain these goals, businesses often go the way of patchworking to solve their problems and address inefficiencies. Doing so leads to silos rather than synergies, as these new entities cobble together various disparate solutions to manage a single mode of transport or process.

Do pursue actionable transparency and visibility.

A mere “track-and-trace” capability is no longer enough. When dealing with a complex network, businesses need systems that can not only provide as much context and transparency as possible, but also enable corrective action within the application. If there are changes or delays, for example, users must be able to see their impact and easily assess the best ways to handle them. Shipment-centric systems – those that place shipments in isolation – don’t offer sufficient visibility. Look for platforms that are order-centric and provide comprehensive details about both the order and shipment in one system.

Don't underestimate the many facets of global support.

As global competition increases and political and market pressures shift focus from just outsourcing to near-shoring and insourcing, modern systems must be able to offer flexible support for international activities, like cross-border fulfillment management via multi-modal, multi-leg shipments. Additionally, it’s worth investing in a system that supports multiple languages and currencies. Beyond daily transactions, global trade makes companies vulnerable to geopolitical change and environmental disruptions that require reorganizing and rerouting the supply chain.

 

The take away here is this: the supply chain is now increasingly global and multi-enterprise driven. Legacy transportation management systems were revolutionary when they first emerged 15-20 years back and have helped companies run their supply chains thus far. But it is increasingly obvious that, as we look to the future, these old frameworks are inhibiting corporations from taking advantage of emerging trends for competitive advantage.

The design is rigid and siloed, while modern demands require flexibility, configurability, and end-to-end visibility and control. Though many attempted to address the issue through quick fixes, software upgrades, and even mergers and acquisitions, all these approaches fail in the same way: they are patchwork solutions that introduce fragmented architectures and preserve the legacy, siloed design.

There is no ideal or sustainable way to bring legacy systems into the modern world – they just weren’t made for it. Alternatively, order-centric TMSs are natively multi-modal and multi-leg and were built to not only support but also optimize multi-enterprise business networks.

 

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Topics: Transport Management Systems, Supply Chain Execution, Supply Chain Optimization, Order-Centric, Order-Centric TMS

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