What a 3PL Should Look For When Buying a Transportation Management System

One of our clients, a third parth logistics (3PL) company, will buy a transportation management system (TMS). They asked us what they should look for in the product demonstrations.

After talking to some folks I respect in the industry, this is what I came up with:

In the demo, 3PLs should look for the following:

The ability to do new client onboarding!

  • Can the supplier easily leverage the configuration settings used to support other clients?
  • Are there templates that can be setup for client implementations?
  • Can the supplier demonstrate unique workflow rules by client?

Flexible Billing Capabilities – think of all the different ways you bill your clients and see how many of these things the TMS can accommodate.

Can the system accomodate last minute changes? Here I’m referring to changes that happen to orders or purchase orders that have already had some level of processing take place.

How does the system handle non-contract/spot type quotes?

Scalability – For planning/optimization, what kind of volumes do you need to plan for and what kinds of run times are acceptable? Volume is a very tricky thing. The TMS supplier may talk about the ability to process 30,000 orders for an optimization run in a morning. And that may sound pretty impressive, but if the optimization involves full truck loads, that is really pretty simple. Some optimization problems explode in terms of the number of options the system must consider. Processing 1,000 orders with 6 stop routes would probably crash most transportation management systems. It is important to get the supplier to an apples to apples type of comparison.

How does the TMS manage multi-leg, multi-mode, time phased planning and execution? Is there a limit to the number of legs or modes? For shipments that cross an ocean, the time phased element is important. If you look at a dray move to port, 27 days on sea, do you really want a preplanned truck move on the other side of the ocean? A lot can happen in 27 days. The system should be able to preplan to a certain level and complete the plan at the appropriate subsequent point in time.

This is a far from complete list, but I do think these are some of the most important things to look for. In short, an 3PL should be looking for a flexible system that accommodates customer specific requirements and changes without customizations or kludgy work arounds.

Comments

  1. This is a great piece to read. For years we’ve been saying that the TMS industry has been pushed by people to move more towards handling the big and complex (more modes, more geographies, more flexibility) – as we did at G-Log. The majority of companies however need to handle the fundamentals – fast onboarding – security – flexible and creative ground transportation, brokerage and 3PL services. This is why we started 3Gtms. I’m so glad that an analyst sees the world the way that we do. This is a piece that we could have written. Cudos Steve!

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