There is an alternative to leaving the management of inbound cargo flows to suppliers: bring it under the umbrella of an in-house or third-party transportation management system (TMS).
In this post we consider the latter route; using a third-party TMS to manage inbound transportation, although many of the principles apply to in-house systems as well.
Why go to the trouble of adding inbound to your TMS workload when suppliers will shoulder the burden?
Here are three solid reasons.
- Better visibility. Improving supply chain visibility is an effective way to raise the efficiency of a customer’s inbound network, and this is what TMS-controlled inbound transportation delivers.
- Tighter control. It’s more difficult to exert control over your preferred routes when vendors stand between you and the carriers that move the loads.
- Standardized documentation. Replacing many versions of key documents such as bills of lading with one, universal form streamlines freight payment processes, increases consistency, and leaves less room for error. These changes add up to increased efficiency for the suppliers, carriers, and freight payment providers.
Making the move to TMS-based inbound freight management can be achieved by completing a three-phase transition plan In this two-part series of posts we’ll map this plan for you, and provide some pointers for achieving a successful transition.
This week we concentrate on the first phase: preparing the ground. This first phase can be divided into four steps.The next post will look at the implementation and post-implementation phases.
The first step in preparing to switch the management of inbound to a third-party TMS lies with you, the customer. You have an intimate knowledge of your supply base, and can identify which vendors – as well the individuals within these organizations – should be included in the roll out.
The ideal people to work with and train are the individuals who carry out the day-to-day management of inbound moves. Avoid the mistake of identifying people such as sales staff who are not directly responsible for initiating inbound shipments.
Developing a training manual for the supply base is the next step. This is a detailed guide to the inbound transportation process from order entry to printing the bills of lading and handing the documents off to drivers.
Developing business rules for both the supply base and carriers is the next step in the process. The customer and third-party provider work together to specify the business rules that underpin the manual.
The fourth and final step in the preparation phase is determining how the roll out is to be structured. Some shippers prefer a regional implementation; others focus initially on geographic areas where there are clusters of suppliers.
Also critical to this step is deciding on the preferred training method. There are basically two variations: face-to-face training or web-based instruction. In general, face-to-face is the more costly of the two options but is also the most effective. The customer makes the final choice.
As we’ll see in the next post, the customer must also offer support in bringing suppliers to the table. On the one hand, vendor companies relinquish some control over inbound freight movements when the TMS program is implemented. On the other hand, they are relieved of this management task. Either way, the customer may have to persuade suppliers to devote the time and resources necessary to participate in the inbound roll out.
Now you are ready for the implementation and post-implementation phases, which we’ll cover in the next post.