If you are in a business where you have any sort of logistics operations, the chances are that transportation of goods may have occupied your thoughts at some point in time. Transportation Management Systems (TMS) have typically been utilized to manage transport over land. In today’s globalized world, they are becoming de rigueur for managing sea and air transport. However, recent reports reveal that there is a gap between what most TMSs offer and what their market actually needs.
The result? TMS failure.
In this post, let’s look at four scenarios in which TMS fails to deliver and how to tackle them.
Data in Internal Organizational Silos Never Turn Into Insights
The research found that 18% of large shippers, 48% 3PLs, and 34% of small and medium shippers use in-house custom-built solutions to track their own shipments. These custom-built solutions are nothing better than the individual data silos stored across various systems in most scenarios.
The integrability of this vital data into other solutions such as ERP, Logistics, Warehousing, etc., is questionable. When transport data can only with significant effort be utilized by other solutions, organizations can’t make timely and informed business decisions. Interestingly, even though this set-up is clumsy and inefficient, only around 10% of the businesses surveyed plan to solidify their TMS platforms within the next year and nearly 20% within the two years.
Solution: Accepting such a ‘patchwork’ of systems may be comfortable in a known and unsurprising environment. However, it will fail to give you insights when you look to alter your business’ course or respond to an unforeseen incident. Consider implementing a reliable and commercial TMS from a software provider like Deck IT, rather than waiting until something out of the ordinary happens.
Use Multiple TMS
Simple is good, and good is more straightforward. Yet, the study states that only 33% of shippers use a single TMS in their organization. It adds that while nearly 25% of the businesses utilize two solutions, around 20% utilize three, approximately 5% utilize four, and just 5% utilize five!
It is common knowledge that the utilization of numerous TMS is a significant drain on resources. Why on earth would organizations keep on doing as such? Priorities, you see. The research found that for shippers, the main element in a TMS is the ability to connect with internal and external systems. Subsequently, they prioritize this functionality over others when making a purchase.
Nonetheless, the decision causes issues down the road for them when they need other functionalities. How would they manage in such a scenario? By investing in different TMS such as those offered by the 3PL or custom solutions. This is an exemplary instance of short-term planning jeopardizing long-term business growth.
Users have to understand that connectivity without help from anyone else doesn’t eliminate the need for data transformation. In this way, if data quality is compromised during the data transformation phase, guaranteeing connectivity to multiple TMSs is pointless.
Solution: Developing custom data connections might be a preferable solution to maintaining different TMSs. Additionally, it is essential to step back, take in the more significant, more extensive view, and invest in a solution that offers functionalities that you might need in the future. With Deck IT’s fleet management solution, you get a wide range of features such as a centralized overview of operations, logistic management, live GPS, centralized control, etc., to improve your organization’s overall operational efficiency and ensure profitability.
Failure to Integrate Data from Partners Leads To Further Loss Of Insights
The American Shipper report demonstrates that nearly 50% of organizations rely on third-party logistics service providers (3PL). This is expected in the worldwide shipping scenario and should not be a concern if the 3PL gives cloud-based technology through which clients can get relevant data on the go. The data isn’t tied too intensely into the solution (which it frequently is). However, without cloud technology, the data gets stuck in external silos.
In fact, this is actually the state of affairs as cloud technology is yet to totally saturate the transportation industry due to on-ground and connectivity challenges. The report further said that an overwhelming 66% of transporters and over half of 3PLs don’t have a solitary view across all regions and suitable transportation modes. Instead, they reinforce data from different systems and solutions. The plans produced by their existing TMS, therefore, fail to address the on-ground needs.
When organizations can’t get this data on-demand, they suffer from the absence of insights. Also, if this data can’t be integrated with their existing systems such as ERP, productivity takes a hit.
Solution: Cloud technology has become inescapable in today’s world. Organizations should proactively lookout for solutions that utilize this technology and assist them with connecting their partners seamlessly. On the one hand, legacy systems exist in association with varied data sources; making the right move to the cloud will not promptly be possible. In such cases, just ensure that your data is accessible and try to make it as portable as possible. Use a fleet management system that offers complete fleet visibility and consistent communication.
Mismatch of Functionalities Provided and Utilized
The report uncovers that only 37% of shippers and practically 50% of the 3PLs surveyed utilize most of the functionalities offered by their TMS. While planning and route optimization and visibility were the main functionalities, sourcing, freight audit and pay, and load tendering didn’t have many takers.
Think of this. Do solution providers not read the requirements of the business correctly? On the other hand, are shippers and 3PL organizations deciding to ignore these functionalities since they are fatigued, i.e., they would prefer not to change the way they make decisions because of lack of time and resources?
Regardless, organizations should do proper due diligence before buying a TMS. Second, they should set aside time and resources to prepare their employees to utilize those functionalities.
Solution: Many 3PLs and custom solutions are wasting resources developing and maintaining features that will be more often than not being utilized. Regardless of whether resources are not being adequately trained on features that could save time & cost, or they’re simply isn’t sufficient value out of using these features, it is clear that there is plenty of room for improvement. Reliable TMS providers and their buyers need to talk more frequently and have further conversations to bridge these gaps.
TMS Will Keep on Failing If Users and Providers Don’t Connect The Dots
Practically 50% of the manufacturers and retailers surveyed feel that their TMS has failed to meet their business expectations. This discovery is an indictment of the current status of TMS adoption and usage. The research by the American Shipper concludes: “The focus, accordingly, on a new solid TMS strategy for global shippers, where holistic control partner connectivity and data quality is as significant (or more so) than software functionality. These shippers should strive to merge existing systems and replace different iterations of data into single instances shared across partners.”
After all, a business doesn’t succeed just by shipping its product. It also needs to ensure that the item has reached where it is intended to be and check whether the entire process from sourcing to delivery was streamlined, irrespective of the mode of transport or the geography.
Use Deck IT’s Fleet Management solutions to scale up your operations and effectively track and maintain your fleet from central control.
Start the transformation now with Deck IT.