It is well-documented: efficiently run companies hire less and invest more in technology. Businesses that want to compete and grow get complete visibility and control over transportation costs and processes across their enterprise. This is achieved by connecting multi-carrier shipping software, also known as Transportation Management Software (TMS), to their ERP or WMS systems, enabling the sharing of critical order information with warehouses. There are huge disadvantages for not investing in a TMS; conversely, there are numerous benefits of implementing one, notwithstanding the following five fundamentals:
1 - Significant transportation cost reductions: up to 30%.
2 – Competitive advantages.
3 – Enterprise adherence to business rules.
4 - Increased customer satisfaction/loyalty
5 – Reduced labor.
Take it from me, implementing a TMS solution is easier said than done (I’m sure I’ll hear about this one from my colleagues). I’ve spent most of my adult life overseeing deployment of these systems and I assure you, those that don’t take this matter seriously will end up paying more than expected to implement, and they may miss critical project milestones. Those readers that have suffered through consistently delayed or failed TMS implementations know exactly what I mean. So are you ready to take the plunge?
The challenge begins with just getting approval to move forward. A consensus is required from a plethora of stakeholders who will be affected by the new system: Customer Service, Sales, Shipping/Warehouse, Finance, Purchasing, and IT personnel, to name a few. If you can muster up a consensus then you have to decide which TMS solution you will implement, a daunting task. Try Googling “TMS solutions,” and you’ll get numerous results. How do you educate yourself enough to be able to select which one is appropriate for your company?
Trying to become an expert is almost impossible due to the complex nature of TMS solutions. It takes years to understand, configure, design, build, and implement these systems. Companies that take this type of project on internally almost always fail or create a solution that doesn’t meet the dynamic needs of the shipping industry, forcing acceptance of less functionality than required – a disaster in project terms. Your solution should be carefully considered with clear-cut goals and objectives and an ever-important ROI.
Among other major roadblocks preventing a well-run company from investing in a good TMS system is the lure of “free shipping software” provided by UPS & FedEx and naïve executives that still believe there’s no cost associated with these income-producing products. Whenever I’m offered something free the first thing I ask is, “How much will it cost me?” You should do the same. The single biggest consequence of accepting free software is that your organization is held captive to the company that provided it. Here are five others:
1 – Inability to implement business rules, corporate policies, and ensure adherence to both.
2 – Larger annual increases and spiraling transportation costs.
3 – Disparate systems and data causing a lack of visibility, control, and accountability.
4 – Inability to adapt to industry changes.
5 – Competitive disadvantage.
There are some instances when accepting the free carrier gift makes sense. Executives need to decide what functionality they need to grow their businesses then measure the capabilities from the free options. If it meets your business needs, keep it. Conversely if it doesn’t, do something about it. More times than not, investing in a TMS solution pays your company dividends. Implementing free carrier provided software usually pays UPS & FedEx higher dividends. Which do you prefer?
If you decide to implement a multi-carrier shipping solution, do your research, get educated, and select a partner that utilizes best practices.
Discovery: Recently I met with a newly hired executive charged with tying several recently acquired companies together. Cultures and other circumstances created numerous challenges. Gary Gjertson, Director of Supply Chain at The Tyden Group, a leading provider of specialized security, identification, traceability, and utility products, has a motto: “In God We Trust, all others bring data.” Gary gets it: The critical importance of acquiring and analyzing data. If you can’t see it, you can’t measure it, and that means you can’t fix it.
First, gather all of your carrier invoices (please, electronic only) and get an intelligent data analysis of small package, LTL, TL, Ocean, Rail, International Air Freight, even couriers and regional carriers and be sure to include every location and account number. All of it! Skipping this step is akin to visiting your physician and not discussing what’s ailing you.
Scope: Here’s where you determine the high level benefits of a multi-carrier shipping system, discuss project cost estimates, implementation timelines, and potential ROI. If there’s a compelling reason(s) to move forward, get started expeditiously — schedule a workshop.
Define: Billy Crystal referred to grieving in Analyze This as “A Process”. The same goes for this stage. It starts with a workshop and then an on-going detailed discussion between the TMS provider’s implementation personnel and employees from various departments including: Customers Service, Purchasing, Shipping/Warehouse, IT, and all others affected by the implementation. Have patience; this takes time.
Design: Ever build a home or addition on your house? Before the first truck/shovel breaks ground, an architect documents exactly what it will look like and how it will be built. Building a TMS is no different. We create a SRS (System Requirement Specifications) document, and I highly recommend you do the same. This report needs to be circulated among the stakeholders and, when all are in agreement, it’s time to get the sign off and start to build your solution.
Build: A proper TMS should be a “wrap around” of your business processes, people, and requirements, not the other way around! The solution should have an inherent ability to adapt to rapidly changing dynamics of the shipping industry. During this phase, you will begin to see your customized solution take form. Make sure you create a test plan that includes every type of order your company can process, and test, and test and test. Many bypass testing and regret it later. Make sure the solution is scalable and deploy as many backup resources as possible. After all, if this project will help your company to grow and save money, it’s essential it is operating 100% of the time.
Rollout: Make sure you have training documentation and a project leader that understands how the system works and can train your staff. Consider a class — training if you have many employees that will be using the solution. I advise deployment based on a rollout schedule vs. all at once.
Support: Size matters. Only in the world of TMS, bigger is NOT better. Many larger companies foolishly believe buying TMS software from other large companies means they’ll automatically get good support. Larger companies tend to leverage their reputation, charge higher prices, and have impressive financial statements but usually don’t offer the quality support you can get from a boutique TMS solutions provider. Check references.
Summary:
The shipping industry is in a paradigm. Executives tiring from massive annual increases from UPS/FedEx are expanding the use of multiple carriers. There are choices that didn’t exist a few years ago. A multi-carrier shipping software solution can be an essential way to increase profits, cut labor costs and help your company grow. So if you are ready to take the plunge, please follow the Essential Best Practices Implementation above.
1 - Significant transportation cost reductions: up to 30%.
2 – Competitive advantages.
3 – Enterprise adherence to business rules.
4 - Increased customer satisfaction/loyalty
5 – Reduced labor.
Take it from me, implementing a TMS solution is easier said than done (I’m sure I’ll hear about this one from my colleagues). I’ve spent most of my adult life overseeing deployment of these systems and I assure you, those that don’t take this matter seriously will end up paying more than expected to implement, and they may miss critical project milestones. Those readers that have suffered through consistently delayed or failed TMS implementations know exactly what I mean. So are you ready to take the plunge?
The challenge begins with just getting approval to move forward. A consensus is required from a plethora of stakeholders who will be affected by the new system: Customer Service, Sales, Shipping/Warehouse, Finance, Purchasing, and IT personnel, to name a few. If you can muster up a consensus then you have to decide which TMS solution you will implement, a daunting task. Try Googling “TMS solutions,” and you’ll get numerous results. How do you educate yourself enough to be able to select which one is appropriate for your company?
Trying to become an expert is almost impossible due to the complex nature of TMS solutions. It takes years to understand, configure, design, build, and implement these systems. Companies that take this type of project on internally almost always fail or create a solution that doesn’t meet the dynamic needs of the shipping industry, forcing acceptance of less functionality than required – a disaster in project terms. Your solution should be carefully considered with clear-cut goals and objectives and an ever-important ROI.
Among other major roadblocks preventing a well-run company from investing in a good TMS system is the lure of “free shipping software” provided by UPS & FedEx and naïve executives that still believe there’s no cost associated with these income-producing products. Whenever I’m offered something free the first thing I ask is, “How much will it cost me?” You should do the same. The single biggest consequence of accepting free software is that your organization is held captive to the company that provided it. Here are five others:
1 – Inability to implement business rules, corporate policies, and ensure adherence to both.
2 – Larger annual increases and spiraling transportation costs.
3 – Disparate systems and data causing a lack of visibility, control, and accountability.
4 – Inability to adapt to industry changes.
5 – Competitive disadvantage.
There are some instances when accepting the free carrier gift makes sense. Executives need to decide what functionality they need to grow their businesses then measure the capabilities from the free options. If it meets your business needs, keep it. Conversely if it doesn’t, do something about it. More times than not, investing in a TMS solution pays your company dividends. Implementing free carrier provided software usually pays UPS & FedEx higher dividends. Which do you prefer?
If you decide to implement a multi-carrier shipping solution, do your research, get educated, and select a partner that utilizes best practices.
Discovery: Recently I met with a newly hired executive charged with tying several recently acquired companies together. Cultures and other circumstances created numerous challenges. Gary Gjertson, Director of Supply Chain at The Tyden Group, a leading provider of specialized security, identification, traceability, and utility products, has a motto: “In God We Trust, all others bring data.” Gary gets it: The critical importance of acquiring and analyzing data. If you can’t see it, you can’t measure it, and that means you can’t fix it.
First, gather all of your carrier invoices (please, electronic only) and get an intelligent data analysis of small package, LTL, TL, Ocean, Rail, International Air Freight, even couriers and regional carriers and be sure to include every location and account number. All of it! Skipping this step is akin to visiting your physician and not discussing what’s ailing you.
Scope: Here’s where you determine the high level benefits of a multi-carrier shipping system, discuss project cost estimates, implementation timelines, and potential ROI. If there’s a compelling reason(s) to move forward, get started expeditiously — schedule a workshop.
Define: Billy Crystal referred to grieving in Analyze This as “A Process”. The same goes for this stage. It starts with a workshop and then an on-going detailed discussion between the TMS provider’s implementation personnel and employees from various departments including: Customers Service, Purchasing, Shipping/Warehouse, IT, and all others affected by the implementation. Have patience; this takes time.
Design: Ever build a home or addition on your house? Before the first truck/shovel breaks ground, an architect documents exactly what it will look like and how it will be built. Building a TMS is no different. We create a SRS (System Requirement Specifications) document, and I highly recommend you do the same. This report needs to be circulated among the stakeholders and, when all are in agreement, it’s time to get the sign off and start to build your solution.
Build: A proper TMS should be a “wrap around” of your business processes, people, and requirements, not the other way around! The solution should have an inherent ability to adapt to rapidly changing dynamics of the shipping industry. During this phase, you will begin to see your customized solution take form. Make sure you create a test plan that includes every type of order your company can process, and test, and test and test. Many bypass testing and regret it later. Make sure the solution is scalable and deploy as many backup resources as possible. After all, if this project will help your company to grow and save money, it’s essential it is operating 100% of the time.
Rollout: Make sure you have training documentation and a project leader that understands how the system works and can train your staff. Consider a class — training if you have many employees that will be using the solution. I advise deployment based on a rollout schedule vs. all at once.
Support: Size matters. Only in the world of TMS, bigger is NOT better. Many larger companies foolishly believe buying TMS software from other large companies means they’ll automatically get good support. Larger companies tend to leverage their reputation, charge higher prices, and have impressive financial statements but usually don’t offer the quality support you can get from a boutique TMS solutions provider. Check references.
Summary:
The shipping industry is in a paradigm. Executives tiring from massive annual increases from UPS/FedEx are expanding the use of multiple carriers. There are choices that didn’t exist a few years ago. A multi-carrier shipping software solution can be an essential way to increase profits, cut labor costs and help your company grow. So if you are ready to take the plunge, please follow the Essential Best Practices Implementation above.
