Transportation execution solutions and, in particular, visibility solutions, are hot. As Chris Cunnane writes in Transportation Execution and Visibility Systems: A Market Poised for Growth, there are a number of macroeconomic factors driving the adoption of transportation execution systems. Technological innovations such as cloud computing, logistics networks and real-time GPS are increasing the importance of transportation execution solutions and redefining how transportation is managed. With all these new capabilities, how can transportation execution solutions help? Here are 6 points to consider.
- Think “TMS+”. Most transportation management systems (TMS) provide limited execution capabilities (e.g., rating, booking, tracking, document management and settlement) in breadth or depth. This is because each transportation mode has unique execution processes, communication standards and hundreds of thousands of carriers and logistics service providers (LSP). It’s hard, thankless and never-ending work to build and maintain mode- and carrier-compliant solutions at the critical mass of carriers and logistics services providers that makes the multi-party process that is transportation work effectively. Transportation execution solutions enhance TMSs by providing them with the connections and information needed to meet customer demands for faster, more precise and reliable deliveries.
- A plan is only as good as the results. Transportation execution solutions are critical to creating a “closed loop” management process. There is too much variability in transportation to assume that what was planned was completed on time, or in the way that was intended. The actual results are invaluable to understanding the real savings, the carrier’s ability to consistently perform as planned, and to provide feedback that improves the planning process.
- Real-time visibility changes everything. Shipment status is a “black hole” for many companies. Without getting on the phone to chase drivers, little is known other than a shipment was picked up and, possibly days later, that it was delivered – or not. With the ability to track carrier shipments in real-time, companies can make better decisions about their shipments and keep customs up-to-date on delivery status. Inventory and payment cycles can be reduced, and supply chain disruptions minimized with up-to-date delivery status and accurate ETAs. Real-time visibility allows transportation processes to be further streamlined and more flexible because they are no longer beholden to slow-moving and incomplete shipment status information.
- Cut lead time and be more responsive. Because transportation is a multi-party process, there are information hand-offs that can extend over the shipment lifecycle. Whether getting rates, carriers accepting tenders, understanding delivery status or paying carriers, tightly integrating and automating transportation processes significantly reduces or eliminates lag time. The result is shorter lead times and faster response to customer requests or changes.
- Add value across the supply chain. The information contained in transportation execution solutions provides benefits that go well beyond the transportation department. Distribution center resources can be better planned, which reduces overtime, congestion and demurrage costs when accurate ETAs are known. Inventory planners and buyers can reduce overall inventory because they will have more confidence in the status of in-transit inventory and can make deployment decisions in advance of the goods arriving. Customer service and sales teams can better inform customers of the status of their deliveries or even allow customers to track their deliveries through self-service applications. The result is fewer resources required for basic customer service tasks and better customer satisfaction. In fact, the value outside the transportation department may be much larger than within it.
- Accelerate time to value for logistics solutions. Most logistics processes are multi-party so getting the parties communicating and collaborating becomes part of the critical path to value. Network-based transportation execution solutions come pre-integrated with many of the carrier and logistics companies in the supply chain. If there are missing carriers and LSPs, logistics execution solutions providers have teams of resources and technology to rapidly onboard those companies. As a result, including transportation execution solutions as part of a TMS, visibility, control tower, etc. rollout reduces the implementation time and gets the team focused on exploiting the system, not chasing down carriers.
Transportation execution solutions have demonstrated the ability to significantly enhance logistics operations and the customer experience. They need to become a key part of your overall logistics technology strategy and customer service strategy. What is your company’s transportation execution strategy? Let me know.
As Executive Vice President, Marketing and Services, Chris Jones (CJones@descartes.com) is primarily responsible for Descartes marketing activities and implementation of Descartes’ solutions. Chris has over 30 years of experience in the supply chain market, including the last 10 years as a part of the Descartes leadership team. Prior to Descartes, he has held a variety of senior management positions in other organizations including: Senior Vice President at The Aberdeen Group’s Value Chain Research division, Executive Vice President of Marketing and Corporate Development for SynQuest and Vice President and Research Director for Enterprise Resource Planning Solutions at The Gartner Group and Associate Director Operations & Technology for Kraft Foods.