It’s taken some time, but Transportation Management Systems (TMS) vendors are getting closer to meeting our definition of a holistic TMS solution.  Here is ARC’s definition of TMS:

Transportation Management Systems are software solutions that facilitate the procurement of transportation services; the short-term planning and optimization of transportation activities, assets, and resources; and the execution of transportation plans.  They address all modes of transportation, including Ocean, Air, Rail, Full Truckload, Less-than-Truckload, Parcel, and Private Fleet.  In addition to managing the physical flow of goods, they also manage the flow of transportation-related information, documents, and money.  TMS also include performance management and collaboration capabilities.

Transportation Management Systems have traditionally been developed and deployed in silo fashion.  For example, parcel shipping, fleet management, and global trade capabilities have historically been offered as standalone applications, developed on different technology platforms, with little or no integration between them or with other transportation and supply chain solutions.

This fragmentation, however, shouldn’t be surprising.  It mirrors the way many, if not most, companies view and manage their transportation operations-i.e., as a collection of silos.  Private fleet operations are managed separately from for-hire operations; inbound, outbound, and intra-company shipments are planned and executed independently; and domestic and global operations are managed by different departments.

Fortunately, the status quo is beginning to change.  Progressive companies are taking a more holistic perspective of their transportation and logistics operations, from an organizational and business process standpoint, in order to increase productivity, reduce costs, and improve service levels.   Similarly, software vendors are transforming TMS from a fragmented collection of applications to a unified platform where users across the enterprise and value chain can execute role-specific processes via configurable user interfaces, workflows, and web services.

Holistic Perspective of TMS (Source: ARC Advisory Group; click to enlarge)

There is still no TMS on the market that meets the full scope of ARC’s definition, but the gap continues to narrow each year.  This week, for example, Oracle announced a new version of its TMS solution.  Oracle Transportation Management 6.0 now includes fleet management capabilities, along with extended transportation sourcing and business intelligence functionality.  I was given a demo of fleet management a few weeks ago, and considering this is a new module, I was very impressed with its capabilities, particularly in the areas of driver and asset management.  In my opinion, the “sweet spot” for this integrated solution are companies, particularly logistics service providers (3PLs) and retailers, that want to manage both common carriers and their private fleet using a single platform.

Call it coincidence, but RedPrairie issued a press release this morning highlighting how it has enhanced its transportation management suite by “fully integrating its Fleet, Parcel, and Collaboration Portal solutions with its core Transportation Management solution.”  And earlier this week, I was given an update by Manhattan Associates on their TMS suite, which they call “Transportation Lifecycle Management” that also includes fleet management capabilities.

Why is fleet management so hot right now?  And what exactly does “fleet management” mean?

I’ll tackle the second question in a future posting, because the term “fleet management” is used to describe a broad range of capabilities, and like TMS in general, no vendor covers the full spectrum.  But in my opinion, fleet management is hot right now for two main reasons: (1) the functionality is important for logistics service providers, the fastest growing segment of the TMS market; and (2) companies are realizing that they’re leaving money on the table by not managing their inbound/outbound and common carrier/private fleet operations in a more integrated manner.

Over the next few weeks, I’ll be interviewing the leading TMS vendors as I update our annual Transportation Management Systems Market Outlook study.  If the gap between what these vendors are offering and our definition of TMS continues to narrow, I’ll have to raise the bar and expand the scope of our definition even further!