Managed Transportation Services (MTS) are being increasingly embraced by shippers, and with good reason: studies have shown that shippers can reduce costs, create visibility and drive efficiencies when they partner with an MTS solutions provider. A 2016 study by ARC Advisory Group indicated that 32 percent of respondents reported savings of 12 percent or more, a dramatic increase over the prior study in which only 9 percent of respondents reported a savings of 12 percent or greater. I would expect that the next survey will demonstrate a further increase in savings for shippers.
While there are many reasons why shippers choose to implement an MTS partnership, I would like to share a few thoughts as to how shippers can partner with their MTS provider to get the most value of the relationship. I have participated in dozens of MTS partnerships representing billions of dollars in funds under management. Throughout those experiences I have seen firsthand that organizations that focus on the “how” as much as the “why” often experience greater success right out of the gate. What are some of the best practices that drive this success?
Ensuring internal alignment and buy-in is absolutely critical to a successful TMS implementation and engagement with an MTS partner. While it is imperative that executives, teams and resources are aligned, it is equally important to ensure that you seek and obtain buy-in from the middle managers and staff that will utilize the TMS each and every day.
A change management plan is a tested and proven vehicle for building alignment and buy-in. As part of your change management plan, consider appointing a project team with clear roles, responsibilities and accountability that can act as the main point of contact with the TMS vendor/MTS provider. The project team should include an executive sponsor, middle managers and TMS end-users, ensuring that a variety of needs and perspectives are represented. The plan must include thorough TMS training for all managers and end-users.
A commitment to clear, concise, and frequent internal communication is an important component of the change management plan. Recent studies have indicated that training, leadership communicating a vision, and ongoing communication updates are cited by supply chain team members as the top three reasons they support and adopt change in the workplace. This goes beyond simply communicating the benefits of a TMS. Leadership must be clear in communicating the goals, priorities and potential obstacles associated with TMS implementation.
Logistics leaders must understand that implementing a TMS is not the end, but rather the beginning, of a process of continuous improvement in your supply chain. For example, because the TMS brings enhanced visibility to your supply chain, you may uncover issues that were previously hidden, including data inaccuracies, varying policies and procedures across locations, etc. While it’s natural to view these challenges as bothersome, it’s important for leaders to embrace and communicate these instances as opportunities for improvement, not obstacles to progress. The TMS becomes the vehicle for both highlighting and addressing these challenges, and yes, it is worth the hassle. For example, TMS implementation can uncover critical and actionable data regarding your organization’s true cost to serve, and can empower you to make adjustments to your pricing that maximize profitability.
Lastly, how you manage your relationship with your MTS partner is also key to success. The single most important factor is communication. Be as transparent as possible regarding your company’s plans for the future, whether that means opening new facilities, rollout of new products, or entering new markets. Be open as well with regards to your shortcomings, including data integrity, resource constraints, or other challenges. After all, you are engaging with an MTS provider and implementing a TMS in order to achieve your organization’s goals; your provider will be better positioned to enable your success if you are clear about where you are headed.
As Senior Vice President of Sales and Solutions at GlobalTranz, Ross Spanier leads the enterprise sales organization as well as the design and delivery of innovative and customized supply chain solutions that drive efficiency, cost savings and competitive advantages for current and prospective customers. With over 15 years of experience in the supply chain and logistics industry, Ross has developed and grown sales and operations teams specializing in best-in-class service execution of LTL, TL, expedite, supply chain management, projects & heavy haul, white glove and managed transportation service lines.