TMS Talk Series – Part 3: The Business Case for Transportation Management
For many organizations, transportation and logistics is often viewed in a bubble that doesn’t quite fit in with the overall strategy or is factored in to business goals. In reality, transportation touches a number of departments within a company and can have a significant impact on its bottom line, overall operational efficiency and ability to service its customers at a high level.
Part three of our TMS Talk series will discuss some of the ways that your organization, whether small-to-midsized or enterprise, can make a persuasive business case for the right TMS to help improve operational efficiency, reduce costs and drive meaningful change.
TMS + Your Organization
In order to understand the benefits of implementing a TMS, it’s important to examine the massive role that transportation plays throughout your entire organization. From the moment an order is received, the transportation planning and execution process is underway. The lifecycle of an order includes the customer service department receiving the order, the warehousing and shipping department selecting carriers to move the freight, scheduling the pickup and delivery, preparing the shipment, then the accounting department receiving, processing and paying invoices.
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Within this process, multiple departments are communicating and exchanging information in order to properly and efficiently execute an order – meaning that truly successful transportation planning and execution requires all of these departments to work together seamlessly. And consequently, any inefficiencies within your logistics operations create inefficiencies throughout your organization, and trickle down to the satisfaction of the end customer.
TMS + Your Lean Supply Chain
Although you may have the right people in place to manage transportation, that doesn’t mean that they have the tools they need to enable maximum efficiency and allow them to make the best supply chain decision every time. Organizations without a system to automate its transportation processes must handle all tasks manually – a tedious process subject to human error and costly mistakes.
For example, in order to secure truck capacity to move freight, your transportation department may have to call several carriers to get quotes then compare them before making a decision. In today’s environment, that’s a waste of valuable human resources, as a TMS system can compare rates and select the best carrier in a matter of seconds.
And since transportation touches multiple departments, inefficient processes can create waste across your organization. For example, tracking a shipment without a TMS in place may require customer service to contact the shipping department to ask them to track down the order. Shipping will then need to call the trucking company and have them contact the driver, then have the shipment update communicated back to customer service.
This slow manual process also hinders a company’s ability to meet the customers’ increasing demands for greater velocity and service – putting your company at a competitive disadvantage, and ultimately, at risk of losing customers.
TMS + Time and Cost Savings
Today’s TMS systems can do that much of this work for us. A TMS can quickly and efficiently look at carrier sites, get rate quotes, track shipments and gather status information, along with countless other menial operations work that take up so much of an employee’s precious time. And, according to recent ARC research, the use of a TMS application helps companies reduce transportation costs by an average of approximately 8 percent.¹
Having the tools and processes in place that help your people to be more efficient and to spend their time on value added work instead of emailing carriers to get status updates can be extremely beneficial for companies with limited personnel or those lacking the budget to scale during busy shipment seasons. Speeding up these processes throughout the order lifecycle through automation can ultimately speed up the entire supply chain and allow your organization to better meet customer needs.
For more on the benefits that the right TMS can bring your organization, stay tuned for more in our “TMS Talk” series here on Logistically Speaking!
Do you have the right tools to maximize your supply chain success?