You have decided to invest in a leading edge transportation management system (TMS) and now look forward to the strategic benefits that this exciting addition will deliver. How do you make sure that the organization is primed to take advantage of the step up in performance?
Last week (see Plant Your Feet on the Ground Before Shooting for the Stars) we described some of the hurdles that can prevent shippers from leveraging the capacity of a TMS to raise the performance bar from tactical to strategic. In this post we’ll consider actions you can take to ready your internal transportation management team for this voyage. These considerations are also useful when selecting new service providers.
Is your provider helping? Much of the onus for preparing the organization to fully utilize a new TMS falls on the shipper’s shoulders. However, the TMS provider you choose can also play a significant part. For example, how does your provider make sure that new customers are compatible with the technology and their own operating philosophy? It is difficult to mine every nugget of strategic advantage from an advanced TMS solution when the buyer and seller have conflicting ideas about increasing network efficiency.
The provider’s ability to help the shipper align with the new TMS is critical during the implementation phase. Does the provider have a carefully structured, systematic implementation plan designed to shine a light on every corner of the shipper’s freight operations – including those that are outside the transportation function, like finance, customer service and sales, but have an impact on it? Are suppliers and customers covered by the plan?
A comprehensive, carefully executed plan identifies obstacles to fulfilling the system’s strategic potential. These include an antiquated route guide, inaccurate process maps in need of updates, clarifying age old “grey areas”, and communications flaws that leave key personnel in the dark about what the TMS is meant to achieve.
Do you have the right toolbox? Modern TMS solutions offer a mind-boggling array of analytical tools and methods. Devote plenty of time on the front end to exploring these tools and choosing the ones that are going to give you the most bang for your strategic buck. In our experience, analytical routines that measure carrier performance at the facility level, review routing guide depth, and evaluate customer behavior such as order lead times, are mainstays. Others, such as features that measure the spread of transportation costs by SKU, facility, and employee, or maintain a watching brief on your rate curve, are also important. The scope and sophistication of your toolbox determines the strategic worth of the TMS.
Do you have the right skills base? The decision to implement a TMS does not, in itself, imbue your staff with the strategic capabilities they will need to exploit it. Ryan Pettit offers an example of the different mindset required in his blog post, Turning Tacticians into Strategists. In a non-strategic environment, a staff member’s natural inclination when analyzing carrier performance is to select the worst players and confront them about their sub-par numbers. A more sophisticated approach is to delve deeper into the root problems and come up with constructive solutions that make the transportation network more competitive.
How can shippers train their operational staff to be strategically creative? One way is to build prescriptive management routines. Set specific, regular tasks for individuals that require them to draw strategic conclusions from certain analyses, evaluate performance, and create action plans to improve key metrics. Focus on desired outcomes and not that one load that was supposed to pick up last Tuesday.
Effectively managing the transition from tactical to strategic when adopting TMS technology is gaining in importance as freight operations become more global. Issues such as inadequate communications across departmental silos are much more complex in a global environment.
Shippers that have started the journey are well placed to gain strategic advantage from continuously evolving global TMS capabilities.