Early adopters have yielded significant benefits from leveraging a transportation management system (TMS). According to a Gartner survey, TMS users typically see yearly savings of 5% to 15%. However, despite the benefits, only 35% of businesses are using a TMS, leaving behind many who haven't invested in the full digitization of their supply chain.
Those who rely on manual processes — either partially or entirely — are missing out on the opportunity to utilize the large volumes of operational data available to them to improve efficiency and realize cost savings. With today’s TMS, shippers can view their entire network in real time, enabling them to quickly identify and address any potential problems while gathering critical data on shipments, carriers, routes and more. All that data can then be put to work to support better operational planning and ongoing efficiency.
Making Data Actionable
The use of data and analytics has exploded within the logistics industry in recent years, but that information only becomes valuable when technology makes it actionable. Here are a few ways shippers can use data to improve their transportation operations.
- Shipping optimization. Identifying the most efficient and cost-effective routes and carriers or opportunities to convert modes will ultimately lower transportation costs and reduce carbon emissions while ensuring on-time delivery.
- Transportation planning. Ensuring that you’re shipping loads from the most optimal plant or distribution center will reduce miles, time, cost, and best utilize capacity — both transportation and shipping capacity.
- Capacity. Better aligning inbound and outbound shipments helps plan continuous moves, and reduces the need to source another carrier, or waste empty miles.
- Sustainability. Supporting ESG efforts by selecting optimal routes and transportation modes will reduce carbon emissions or dwell time at the dock.
- Carrier management. Maintaining carrier scorecards means you can closely measure carrier performance, such as tender acceptance and on-time pick-up and delivery, and make necessary adjustments.
- Accessorial management. Benchmarking carrier accessorials and determining which are appropriate allows you to then have systems in place to avoid paying those surcharges. For example, you can reduce dwell time by improving appointment scheduling and being alerted about trucks that have been waiting for more than an hour.
While a TMS can provide access to operational and market data, effectively utilizing that information to optimize supply chain operations goes beyond simply implementing the right technology. A truly strategic, trusted partner will take all that available information and help turn it into tangible ongoing improvements for your business. The right TMS partner wants to be measured against this, and wants a scoreboard to show delivered value.
Outlook: Global supply chains will contend with more complexity and volatility in years to come, which is making the utilization of data to make smart, strategic decisions more important than ever. By using a TMS that provides real-time data and actionable insights, you can improve your efficiency, customer service, profitability and sustainability. And cost shouldn’t be a barrier when it comes to implementing a TMS — you can get started at a low barrier to entry that will yield significant results.
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