Shippers that invest in a transportation management system (TMS) have a clear idea of the issues they want to address. However, when the system is in place, the range of tools that become readily available can be intimidating.
This is perfectly natural; any new tool comes with a learning curve.
Although the steepness of that curve differs from shipper to shipper, in broad terms there are often three learning stages that users go through as they master the intricacies of a TMS.
This applies for both in-house acquisitions and when the shipper opts to work with a third-party TMS provider. In this post I’ll concentrate on the latter situation.
During the first year or so of the implementation, the main focus is on the high-priority issues that the shipper identified when they decided to invest in the technology. Improving network visibility and developing a more effective billing process are two examples of these overarching goals.
In some instances the initial outcomes can be surprising.
For example, a shipper may want to know if the actual movements of products are reflective of how the product flows were planned. In a large network that spans multiple countries or is even global in scope, it is difficult to manage the product flow out of every facility. Unless you have the tools and level of visibility required to effectively oversee such a complex network. In one case, a shipper was certain that air freight was never utilized in their network. However, when the data started flowing to the TMS system, the company was surprised to see just how often air transportation was being utilized.
In the second learning phase, the shipper has gained insight into its network, and starts to implement changes that will positively affect the supply chain.
At this stage they still rely on the third-party provider to do most of the analytical heavy lifting. This is understandable because the provider specializes in its systems and has a deeper understanding of how to use the TMS tools. While the shipper stays busy implementing new programs, the third-party provider continues to manage the database and send the required reports to the shipper.
As the outsource relationship matures, the shipper uses the newfound insights they have acquired to delve deeper into the performance of the supply chain. This represents the third stage in the learning process.
Gradually the shipper is exercising greater control over the TMS, and is applying the technology in more sophisticated ways. They have reaped big savings and hikes in supply chain efficiency by tackling the low-hanging fruit; now the focus shifts to more challenging network performance-enhancing projects that deliver a competitive advantage.
Typical examples are transitioning to multi-modal transportation and working with distribution centers (DC) to optimize the mix of products. In the latter case, by fine-tuning the cargo mix, the large-network shipper described earlier was able to improve truck utilization to minimize the number of vehicles on the road and reduce its carbon footprint.
The time taken to reach this third stage varies. Much depends on factors such as the nature of the shipper’s business model and the profile of the logistics department. Some departments do not have the staff to become highly skilled TMS practitioners and continue to rely on the provider to be the subject matter expert.
However, when logistics departments start to work more intimately with their own data and utilize the tools made available by the TMS provider, they begin to understand the more intricate details of their network. Many shippers are pleasantly surprised at the sheer volume of data they now have at their fingertips.
While it is true that the capabilities of a new TMS solution can appear daunting at first, the rewards of having instantaneous answers far outweigh the effort needed to navigate the learning curve.
If you are a user who finds TMS technology intimidating, my advice is simple: start using the tools a little each day. And please remember, you can’t break the system so use it as often and as rigorously as you want!
Before long you will be generating reports and manipulating the system’s analytics in ways that you barely imagined when the TMS was a shiny new tool.