The Democratization of TMS

A software segment that was once dominated by larger vendors like SAP, JDA, and Oracle, TMS has become a hotbed for innovation by smaller, Cloud-based providers that have opened their platforms up to a larger group of shippers.

“In the last 18 months, we’ve seen some smaller players making a significant push toward some of our customers, and those users are quite happy with these [platforms],” says Ramond Coleman, senior manager, digital supply chain practice at technology consulting firm CapGemini.

“Some of the players we don’t even see on the [Gartner] Magic Quadrant, which is surprising to us,” Coleman continues. “However, their TMS capabilities are pretty comprehensive—to the point where some of these smaller players could take over some of the market share that larger TMS providers held in the past.”

Like De Muynck, Coleman says the Cloud is pushing both sides of the equation. It’s making TMS more accessible to more shippers while also creating a “sandbox” of sorts for technology vendors looking to develop Cloud-based supply chain systems. In most cases, those solutions are more affordable than earlier, on-premise options. This makes TMS more attractive to shippers that have been reluctant to surrender their manual, paper-, and phone call-based transportation management approaches.

Coleman is also seeing more predictive analytics embedded in TMS versus just being “bolted onto” an existing solution. “They’re getting creative and making an all-in-one solution,” he explains. “A lot of companies don’t like the idea of implementing TMS and then having to add additional services at a later date. The vendors that are embedding analytics and other capabilities are differentiating themselves from some of the other options on the market.”

Holman Parts: From old school to streamlined processes
To manage its national transportation network, Holman Parts Distribution based in Pennsauken, N.J., has always relied on a combination of websites, carriers, phone calls, faxes and e-mails. “It was pretty old school,” says John Conte, director of logistics operations. “There was no technology in play.”

The tipping point came in 2014, when this national provider of powertrain solutions exited some unprofitable markets, switched up its customer base, and realigned its product offerings. The company has 10 DCs nationwide that ship to automotive customers like Ford, General Motors, Chrysler and Mercedes-Benz.

“We decided to focus the distribution of OEM product using national fleets and dealerships,” says Conte, whose team began looking more closely at where the company was shipping to—and perhaps more importantly, how it was shipping those goods.

“We quickly realized that we didn’t know how much we were spending on transportation,” says Richard Scott, a logistics analyst at the parts distributor. More specifically, the company had little visibility into whether the actual invoiced amounts matched what it was expecting to pay on the front end. It also wanted customers to be able to track their orders on a self-serve basis—something it wasn’t offering at the time.

“As part of our new overall corporate strategy,” says Conte, “we knew that we needed to put a better focus around logistics and invest in some technology.”

Tasked with finding that technology, Conte wanted a system that would integrate with the company’s existing enterprise resource planning (ERP) system, that would be able to scale up as the company grew, and could manage electronic freight rate audits on the same platform. “With those basic requirements and a Google search,” says Conte, “we came up with a list of potential TMS providers.”

In 2016, Holman Parts selected the Kuebix TMS, which it’s now using across all of its DCs. The software provides invoice auditing, vendor management tools, and to is being used to strategically plan large-scale changes (i.e., new distribution centers). According to Conte, the company uses the TMS as an “all-in” logistics and supply chain tool.

“Because all shipments go through a single system—be it parcel or freight—customer support no longer has to jump on four or five different websites to get the tracking information,” says Conte. The system also “pushes out” that tracking information and allows customers to track their shipments online.

Holman Parts has also used its TMS to significantly reduce its overall transportation spend—to the tune of about $400,000 within 12 months of implementing the new platform. “It was basically a $15,000 investment at the time,” says Chelsea Short, logistics coordinator. “Once we saw that cost reduction, we knew we could be doing even more with the system.” When the company integrated the TMS with its ERP, for example, new operational efficiencies soon followed.

Instead of employees having to key information in by hand, for example, they just type in sales order numbers and let the ERP create the sales order flow and bill of lading. The system is currently being rolled out company-wide across eight operating units, which includes roughly 60 different locations.

To shippers that are taking their own manual transportation management systems into the digital age, Conte says change management has been the most difficult part of the transition. “We had warehouse employees who had been here for 40 years to 50 years, doing things the same way every day,” he explains. “For them, implementing new technology and processes can be scary.”

https://www.logisticsmgmt.com/article/the_democratization_of_tms/transportation