Measuring the Value of Your Investment in Transportation Management Technology
Implementing new transportation management technology is like upgrading a smartphone. At first, users struggle because instituting change is a big thing. Eventually, though, they ask themselves how they ever got along without the latest technology. Over time, even the most skeptical users become cheerleaders for the advanced solution.
Determining the value of an investment in a transportation management technology upgrade begins by confirming you are using the systems to the best of your ability and to take advantage of all the tools they can provide to streamline operations as much as possible. Understanding how the software should work and the goals you have for it determines whether you should be doing things differently.
That process may take longer but it’s worth it in the long run. What’s important to realize is that measuring your level of technology utilization lets you see the potential it has to help realize objectives.
Understanding the Differences in Transportation Management Technology
A Gartner white paper-- Key Considerations for Supply Chain Leaders Evaluating Transportation Management Systems— noted that companies looking for a transportation management system (TMS) often don’t understand the differences in solutions, which focus on different end users, levels of transportation complexity, transport modes, industries, regions, implementation methods and even company sizes, making the selection process increasingly complex.
“Supply chain logistics leaders responsible for logistics and operations strategy should review the role of transportation technology by identifying gaps that disruptions have highlighted, and their impact on the transportation management function,” the paper noted. “Create a roadmap with the technologies that can help address these needs and prioritize them based on the company’s technology maturity. Select the right transportation technology by aligning the correct capabilities with the organization’s business strategy.”
To put that approach into practice, here are some important questions to ask:
What was your vision when you bought software?
As your needs have advanced have your systems kept pace?
Do you document system changes?
Are your system changes centrally managed and is there an approval process?
Can you report on the amount of technical customization you have in your environment?
Are you managing for new people and identifying training gaps that need to be filled?
Technology keeps moving forward and new software versions are available regularly, so it’s important to keep up, it was noted. At the same time, in more progressive companies there’s pressure to do that effectively because the front line and the back office need to support each other.
Why Carriers Can Benefit from Transportation Management Technology
Carriers can measure the value of a TMS by looking at various processes for order entry, load requirements and planning, driver management and automated mobile communications connections. Additionally, reporting that is aligned to business metrics to enable data-driven decisions stems from knowing what’s important to you, and how to access that data.
Amit Sethi, senior manager for logistics and supply chain at Capgemini, a multinational corporation that provides consulting, technology, professional, and outsourcing services, said metrics, analytics and KPIs that a modern TMS can provide are piquing shippers’ interest because that data can be used to make better decisions.
“In essence, a TMS paints a KPI/metric-based picture of the entire end-to-end supply chain,” Sethi stated. “It also interacts with trading partners in the value chain—vendors, customers, freight providers and carriers—creating a complete loop that logistics professionals can turn to as a reliable source of data and intelligence.
“We’re definitely seeing more shippers harness this TMS capability,” Sethi continued, “and then use it as a good data source for how the entire supply chain is performing. This trend is helping to drive TMS functionality as a whole right now and is prompting vendors to weave such capabilities into their solutions.”
Transportation management systems continue to be an investment priority, Gartner noted. Many logistics functions are looking at technology to automate their processes and mitigate the impact of disruptions on their operations. In some form, these technologies help organizations improve visibility and transparency into costs, productivity for drivers and carriers along with customer satisfaction.
As more companies explore TMS options, and as existing users upgrade to newer systems, Amit Sethi expects the market to continue down a healthy growth path. And with the desire for more optimization, he added, the value of a TMS will only continue to expand. In fact, over the past few years, adoption rates have started to increase. Among small and mid-sized shippers, for example, overall TMS adoption has grown 15%.
How Trimble Can Help You Maximize Your Technology ROI
Trimble research shows that most companies don’t utilize over 40% of their TMS capability so there is a ton of opportunity to be realized. The focus, however, should be on making continuous improvement-- even if everything is not perfect-- and on moving forward by using measures to evaluate and elevate your technology investment.
Each day, we are helping all supply chain stakeholders, from carriers to shippers and third-party intermediaries, leverage transportation management technology to improve collaboration and productivity. Find out how one customer, Brady Trucking, recently implemented a SaaS-based TMS to ensure it maximized the efficiency of its entire operations.