We all know transportation management systems (TMS) are cost savers. They help us automate processes, gain visibility, and manage movement more effectively. However, to continually achieve year over year cost savings, it is important to evaluate your current processes and look for ways to achieve wider, deeper use of your TMS.
One of the most famous methods used for continuous improvement is the “Shewhart Cycle” also known as PDSA. American engineer W. Edwards Demming made this method famous in the mid-20th century. The acronym stands for: Plan, Do, Study, Act. It is an iterative approach to improve quality in a specific area or function.
Four questions typically accompany this method, one per stage.
Plan: What are we going to do?
Do: How will we do it?
Study: What were the results?
Act: What changes should we make based on our findings?
This method is very useful when analyzing your transportation management system. When people embark on the journey to evaluate and implement a TMS, one of the main goals or expected outputs is continuous improvement in the transportation space.
Unfortunately, what often happens post implementation is that users exhale in relief to have the system up and running and expect to print money in the form of cost savings year after year. Sure, this can (and does) happen, but to ensure your company is maximizing its TMS investment, it takes a continuous improvement mindset and action plan. The first two steps in the PDSA cycle are commonly addressed during implementation, but the second set can be overlooked. Here is an example of how to answer the first two questions, and how to complete the last two questions.
What are we going to do?
Implement a TMS to deliver cost savings and planning efficiencies. Cost savings will come from shipment consolidation and optimization. Efficiencies will be gained by automating the manual planning and execution process.
How will we do it?
The implementation process will include a future state design, setup, configuration and training. This will be a cross-functional team of subject matter experts from my organization and experts from my technology provider.
What were your results?
A TMS should not be a “set it and forget” project with a start date and end date. To fully leverage your investment you must “study” the results. This is where the iterative part of continuous improvement comes in to play.
This stage can be difficult because it requires data, metrics, and the ability to step back and analyze current performance. A key tool to help answer this question is a TMS Scorecard. It shows you how much of the technology available you are actually using, and it can reveal how well you are using it. In a single instance, multi-tenant SaaS environment you may also see how your organization is utilizing the TMS compared to other shippers. The TMS Scorecard is a great way to find new ways to broaden the scope of your TMS as well as improve the usage.
What changes should we make based on our findings?
From the analysis in the “Study” stage, a shipper should be able to develop an action plan that will serve as the roadmap for continuous improvement ideally in the form of incremental cost savings and planning efficiencies.
In a SaaS environment, a key constituent of all the PDSA stages is the system administrator. The system administrator becomes the shipper’s “resident expert” in all things TMS. This person should be staying abreast of all the innovation the technology provider has to offer in each new release. Once you fully understand what the TMS can do to help you meet your goals, the easier it is to come up with an action plan to execute.
As in most areas of business, PDSA can be a very valuable framework for realizing continuous improvement in the utilization of a TMS. It’s also important to use the tools your technology provider has to offer to provide insight into maximizing your return on TMS investment. Finally, appoint an internal champion to invest time in developing a deeper understanding of the technology to help drive your roadmap for continuous improvement.
Nick Roberts is the Senior Manager of Client Services at LeanLogistics. With more than 17 years of experience in the supply chain industry, Nick has worked in the retail, manufacturing, and logistics technology fields. His goal is to ensure his customers are fully leveraging LeanLogistics’ technology platform and services.