5 ‘Readiness Factors’ to Consider When Implementing a Transportation Management System
Much in the way that Uber creates headaches for conventional cab companies, transportation management systems (TMS) have become disruptive technologies, dramatically altering the way retailers approach transportation and logistics.
In an era where consumers’ “need it now” mentality reigns, using a TMS dashboard to pinpoint a shipment, access a delivery time or offer an alternative can be an invaluable tool. According to the International Data Corporation’s (IDC) report, The Evolution of Supply Chains in a Direct-to-Consumer World, retailers are increasingly looking to TMS to support a seamless multichannel experience.
However, as much as retailers would hope for a plug-and-play system, they must understand that TMS technologies can’t deliver success all on their own. Many of the world’s top retail brands have planned and executed successful TMS implementations, and while each of those solutions were unique, they all began a holistic understanding of the structural processes in play that creates a disruptive and effective transportation experience.
The bottom line: Unless they're ready for a TMS implementation, retailers can’t expect it to fully succeed. Ultimately, several factors determine the success of implementation:
Readiness Factor No. 1: Strategic TMS Footprint
Invariably, the most successful TMS plans begin with the long view — i.e., making a thorough assessment of who, what, where, why and how logistics are managed today.
- What does your existing business footprint look like, and where do you want it to go?
- How do you move goods now?
- How is transport planning managed now, and how will it be managed in the future?
- How can you most efficiently manage logistics with a TMS?
The most critical questions should focus on the people who will lead the process, as most retail logistics professionals must coordinate the movement of goods through a vast and complex network of internal employees, logistics vendors, suppliers and customers. Most, if not all, of that will change during a TMS implementation.
Readiness Factor No. 2: ERP Integration
Integrating transportation planning with enterprise resource planning (ERP) can be frustrating. Why? Traditionally, retailers have made most of their shipping and transport decisions on a day-to-day basis rather than using an automated process, which runs counter to the goals of ERP. Fortunately, a TMS implementation enables retailers to take a fresh look at their existing transportation management operations.
- Which systems do you have in place now?
- What other internal systems contain transport data?
- What types of systems do you use to communicate with your partners, vendors, suppliers and customers?
- How will demand be met with inventory when your TMS footprint changes?
Readiness Factor No. 3: IT Resourcing
Companies tend to approach information technology (IT) in their own unique way, with each using varying combinations of in-house and external IT assets, resources, vendors and partners. In the TMS integration process, retailers should thoroughly assess their existing IT environment and develop a road map for how it will be organized later.
- How is IT structured within and outside your business?
- How does this support the global footprint?
- Are your IT resources allocated for TMS integration?
Readiness Factor No. 4: Carrier Volume and Connectivity Options
From tendering and booking to appointment scheduling and freight payments, most transportation processes involve a seemingly endless exchange of information between retail companies and carriers, suppliers and external partners. As a result, carrier volume and connectivity issues must factor into the TMS plan.
- How many carriers exist in your TMS footprint?
- Of those carriers, how many are currently connected electronically?
- What carrier connectivity methods are currently in use?
- How are your contracts set up with them?
Readiness Factor No. 5: Business Unit Readiness
Unless your company’s business units are ready, willing and able to support it, a TMS plan is most likely doomed. The greatest challenge is that a TMS is sometimes viewed as a low-priority item. It’s essential to win the “buy in” of business unit leaders by demonstrating how the TMS can specifically benefit them. After lining up support, retailers should ask the following:
- Are there any seasonal projects or other business projects competing for resources?
- Which departments can you count on to be project resources?
Readiness Drives TMS Success for Retailers
To better navigate the changing market of transportation and logistics, retailers must gain a broader view of the disruptive qualities of TMS and how to best leverage an effective solution for their business needs. As some of the world’s top brands have shown, the difference between a successful TMS implementation and one that fails to meet expectations almost always comes down to readiness.
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