I visited my first Control Tower a few weeks ago–TMC’s North American facility in Chicago. TMC is the transportation managed services division of C.H. Robinson Worldwide, an ARC client.
A Control Tower is a location where a transportation managed services provider uses its transportation management system (TMS) to do regional planning and execution of transportation loads for its shipper clients. TMC performs transportation planning and execution for 40 clients, but many of these clients retain in-house control of their strategic transportation procurement process, their routing guides, and their approach to transportation pricing for their customers.
I was impressed by several things during my visit: TMC’s team, its single instance global TMS, its worldwide operations (TMC also has a Control Tower in Europe and two in Asia), and an interesting appointment scheduling service for Food & Beverage shippers. But most of all, I came away with an appreciation for a key advantage of transportation managed services: a greater ability to develop power users.
For a decade I have argued that companies need to work harder to develop power users. With traditional supply chain software, where companies pay for a license and implementation, it is not unusual for a big company to pay more than a million dollars before they start using the solution. Then they pay another 20 percent or so of the software license in annual maintenance fees. Based on these upfront fees, far too many companies have skimped on paying for the necessary training associated with developing power users. It would make good sense for companies to set aside training money in addition to the maintenance fees, so they can continue to train their users year after year on how to better use the software. In my experience, however, this is rarely done.
TMS is an application area where I’ve seen companies implement a solution, drive real value in the first year or two, but progressively less after that. I’ve come across several companies that have thrown away their TMS after five years or so and implemented a different solution. I usually attribute this to their failure to develop power users, or the loss of the one or two power users they had. If you can’t stay on top of changes to your transportation network, routing guide, service levels, etc., your TMS has no chance of delivering value. And increasingly the designation of “power user” will go to those who can effectively use the TMS’s out-of-the-box analytics and emerging network-generated benchmark metrics, as well as those who can generate ad-hoc reports to solve new problems.
Let’s contrast that with the Control Tower approach. The TMC TMS planning team is much larger than what most companies have internally and they are growing. Consequently, they have a more formal process for hiring and training transportation analysts than most companies will.
TMC also has a defined career path for its new hires. They start as a Customer Service Representative or Analyst 1, and then move up as their skills develop to Analyst 2, Operations Manager, and Account Manager. Each account has an Account Manager and Operations Manager assigned to them – basically power users. New analysts sit in the same pod with the power users and learn the customer’s business and the intricacies of planning for that vertical.
Additionally, many of TMC’s customers have seasonal demand patterns. This allows the company to shift young analysts to different desks during down periods so that they can learn how other customers and verticals approach transportation. This too allows these analysts to grow.
Before I went to visit TMC, I prepared by reviewing the company’s website and some of its white papers. TMC has a web page called “Our Formula” – Process Engineers (experts at Six Sigma style continuous improvement projects) + TMS Technology + TMS Power Users. I didn’t think much about this formula prior to the trip, but I now understand why TMS power users is part of what TMC considers to be its key differentiation. What is the point of buying a Ferrari and then having your nearly-blind grandmother drive the car? If you have a Ferrari, drive it like a Ferrari, not like a VW bug!