Skin ADV

eng
About   |   Newsletter
Demand & Supply Chain Management Evolution




08 May 2019
Transportation management: focus on last-mile or global systems?

Infor
Infor

Should you standardize your many business units on a new, globally-implemented transportation management system (TMS), or do you let each business unit or region control its own TMS technology decisions?

The best answer for software cost control as well as performance improvement could be to do both.

 

Divide and conquer

The ”supply chain” of old is now a complex, multi-node global supply network, and businesses are more likely to serve markets and customers in multiple geographies as well.

Outbound shipments from distribution centers, warehouses and final assembly plants must deal with final-mile complexities, higher shipment frequencies with smaller shipment sizes and increasing customer expectations for faster shipment speed, in-transit visibility, and low or no shipping charges.

Regional logistics environments can differ radically. Trucking or parcel networks in Australia, the United States, South America and China look and operate very differently from one another – even if the ocean carriers that service regional ports may have a great deal of overlap.

The good news? Expanding TMS options in the cloud are driving competitive pricing downwards, and ever closer to ”free.” The core functionality of a traditional TMS is widely available from many software providers today, to the point of being largely commoditized.

Additional offerings designed for more specialized shipping operations are increasingly recognized as better fits in segments like distribution or ecommerce fulfillment than a traditional TMS.

With many modern TMS solutions designed for vastly improved ease-of-use and focused, instead of comprehensive shipping capabilities, your company can change the way it thinks about local TMS investment.

Embrace the ability to change out your TMS solutions more frequently, at lower price points, as more business changes will continue to ripple through your outbound shipping practices to end customers. Your ”final mile” challenges won’t magically crystallize in the next year or two. Improve your ability to adapt and thrive amid this constant, disruptive change with a ”best-of-the-moment” software approach instead of a best-of-breed decision.

Critically, this agile, final-mile TMS approach must be complemented with a global transportation platform strategy to move your enterprise to the next level of logistics maturity and supply chain performance.

 

Defining the global TMS

A “global TMS” is often just another variety of the traditional TMS design that is suitable for deploying as a company standard in different countries. It often supports multiple languages, comes with worldwide software support, and can cover multiple (but never all) subsets of specialized transportation management categories.

This definition of a global TMS does not actually address managing international product flows with multi-leg, multi-modal planning, or even cross-regional and cross-functional visibility end-to-end.

Deploying these heavyweight TMS systems to span both very complex transportation needs as well as many simpler, more modest shipping operations can drive global implementation and license costs to prohibitive levels. Unfortunately, this high cost approach to a standard TMS system can deny large portions of the business access to the real cost-saving benefits from more modern transportation management technologies.

A truly global TMS should be able to plan and optimize routing and costs for end-to-end product journeys originating anywhere in the world. It should reflect and accommodate actual product flows moving over land, across oceans, by air, or seagoing vessel, and then over land once again by truck, rail, or parcel modes to destination. More accurately, we can define a “global TMS” as one that handles multi-leg, multi-mode, multi-stop and multi-party transport planning and execution for cross-ocean product flows in concert with locally implemented TMS systems.

 

Out of many, one

For companies reporting annual revenues of $9 billion, transportation spend aggregates to roughly 2-3% of revenue. For smaller firms, the proportional costs for transportation have been rising rapidly; and for companies around $250 million in sales, annual freight spend is trending in the range of 10-11%.

Visibility and control of freight spend is consequently a high priority for global supply chain operations.

Facing tight capacity and a higher frequency of smaller shipments, the enterprise has less ability to drive down carrier rates or total shipping expense in last mile operations. Control tower projects are often launched to find new cost reduction opportunities by looking upstream to international transportation. A global TMS is really a control tower, bringing diverse and fragmented transportation operations together under a single platform to monitor and manage complex supply chain flows spanning geographies, including inbound and outbound activity for efficiency and cost optimization.

 

No longer a tower, but a network

A global TMS should have a data architecture capable of modeling the multi-leg and multi-mode characteristics of complex international product flows. This offers the ability to plan and optimize shipment activity beginning at origin to maximize cost savings from consolidation, capacity utilization, modal flexibility, cycle compression and reduced deconsolidation and handling processes.

Disruption upstream in the product journey can automatically cascade changes to service providers responsible for later legs, or to destination sites to adjust receiving plans. Planned vs. actual comparisons for execution as well as costs can also highlight inefficiencies, root causes driving spend increases, bottlenecks in transportation flows, and excess dwell in multi-mode journeys.

With cost-effective, fit-for-purpose cloud TMS systems in use at the local level to streamline execution efficiency, a truly global TMS digitally monitors and manages real-world, end-to-end transportation complexity for comprehensive cost reduction, continuous improvement and enterprise-wide supply chain agility.

 

 

 

 

 









 
           Circular Economy     Industry 4.0     Blockchain 

     Internet of Things     Omni Channel 


Join us on


News & Trends
 

Last update 5 Nov 2019
PMI rises to six-month high in October
   Source: Markit US Manufacturing PMI   -  IHS Markit
United States 


Fashion

Today’s omni-channel marketplace means competition is increasing, consumers are demanding more relevant products, inventory lifecycles are shorter and fulfillment is incredibly complex. Business conditions are constantly changing, which means you need the flexibility to adapt quickly and continu...


IHL OMS Research Report

Last month IHL Group released a research study on the Retail Order Management software market. Infor Retail was included in the study as were several competitors. It’s certainly a great resource for any retailer...


Education
 
 4 
Feb
2020
Supply Chain Project Management: Fundamentals
     Georgia Tech Savannah Campus
25
Feb
2020
Material Handling 101: Fundamentals, Analysis and Selection
     Georgia Tech Savannah Campus
24
Mar
2020
Engineering the Warehouse
     Georgia Tech Global Learning Center
14
Apr
2020
Supply Chain Project Management: Vendor Selection & Management
     Georgia Tech Savannah Campus
13
May
2020
Tactical Decision Making in Inventory and Supply Chain Management
     Georgia Tech Global Learning Center

Local & Regional Agenda
 


Resources
 
HOYER: Future-Proofs System for Managing Intermodal Rail, Road, and Sea Transport to Meet High Growth Potential

HOYER is an independent family enterprise that dates back to 1946, and which has become one of the world’s leading bulk-logistics providers, offering comprehensive transport services and complex logistics soluti...

Supply & Demand Chain Executive Special Issue

Take a look at this special issue of Supply & Demand Chain Executive magazine, all about the Virtual Enterprise and its enabler, the business network. As Dr. Marcell Vollmer, COO of Ariba, says,“Business is no ...


International Agenda