TMS Launches New Era: Control Tower Visibility
It wasn't long ago that top executives around the world had to be convinced why they needed accounting software to run their companies. Today it is unthinkable of any company operating without accounting software to manage their company's finances.
The importance of technology in shipping is starting to reach this same critical point for most shippers. The transportation management system (TMS) was born at a time of the perfect storm for any industry. In the United States, deregulation and adoption of computers arrived simultaneously. Shippers were suddenly able to consider multiple carriers for the same lane and use basic technology to assign carriers to shipments. The TMS industry was created with the idea to execute one critical function: Make a label to get the freight off the dock.
Thirty years later, the core functionality of TMS systems has changed very little. The current TMS market leaders operate in much the same way today as during the birth of the TMS industry 30 years ago. Many legacy technology platforms simply route the shipment to the provider according to the "rules" manually entered into a static table. Mission accomplished (get freight off the dock). Little regard is given to dynamic planning prior to the shipment nor visibility after the shipment document is created (parcel label or BOL for freight).
Shippers today are beginning to pinpoint the future functionality needed to modernize and automate their supply chains. Large shippers with complex supply chains are aware that different business units within their company are extremely isolated and operating independently across business segments. Users at one facility process shipments differently than users at another location. Executives overseeing multiple shipping locations need centralized visibility into all locations. Shippers demand centralized control and visibility of their supply chain in real time. Shippers demand a control tower.
A control tower that offers visibility of worldwide shipping across all modes of transportation, all vendors, across all business locations, down to the user level will be the objective of the next generation of TMS systems. The effects of real-time supply chain data have potential for tremendous impact upon a business. Analyzing real-time visibility of carrier performance, routing exceptions, shipping errors, customer service, vendor compliance and freight accrual can greatly influence every aspect of a company's operations—from which vendors products are purchased from to the policies for how salespeople mark up freight. The possibilities of what can be done with live data are infinite as a business experiences real-time visibility from a centralized control tower.
Perhaps the most important benefit from centralized control tower visibility of the supply chain is the level of flexibility that comes as a result of real-time analytics and alerts. The centralized control tower allows for a robust provider network that enables shippers to become agnostic in the decision of who actually hauls the freight. Many shippers have used a singular 3PL network as their coping mechanism for achieving centralized visibility. Is one of your locations suddenly experiencing service issues to Canada? View the other providers in the market and consider "what-if" results if you had utilized services of companies not part of your currently active providers. Centralized control tower visibility makes the exclusion of under-performing providers as well as inclusion of new providers a real-time function in the next generation of TMS technologies.
The industry is entering an era where the current state of legacy TMS technology as we know it is approaching the end of its lifecycle. To further complicate the topic, most ERP companies now offer their own TMS systems, which equate to little more than simply generating a shipping document, and get freight off the dock. The gap between the needs of shippers and TMS providers' capabilities is rapidly widening by the day. It will be interesting to watch and see if the legacy TMS companies that have defined TMS technology begin to rebuild their fragile infrastructures to accommodate the artificial intelligence demanded in tomorrow's supply chains, or whether they will acquire companies with cutting-edge technology architecture as a means of staying relevant.
While the latter seems more likely, the real-time, centralized control tower demands of shippers and legacy table based label making are about to collide as existing IT infrastructures are pushed to their limits to keep up with real-time visibility of all shipping events across all worldwide shipping locations. Your next TMS will soon serve as your company's control tower with widespread visibility across all departments in your organization.