7.10 Tools: Transportation Management Systems
As you can imagine, making all of the transportation decisions to manage inbound and outbound flows—i.e., to bring materials into your company and deliver finished products to customers—is a nightmare of complexity. You not only need to pick the right carriers but you also need to make sure the right equipment is where you need it when you need it. To minimize costs, you need to optimize your loads—and your routes. More mind boggling, you have to do this for a global network and in a sustainable way. And, don't forget, you've got to get the right documents filled out correctly.
How can you do all of the analysis and then keep track of everything—even when freight is in transit? Answer: Implement a A TMS is a sophisticated information system used to plan, optimize, and execute transportation operations. If you've ever tracked a package you ordered online, you have tapped into the retailer's TMS. . A TMS is a sophisticated information system used to plan, optimize, and execute transportation operations. If you've ever tracked a package you ordered online, you have tapped into the retailer's TMS. Figure 7-14 illustrates some of the strategic and operational decisions supported with a TMS. Today, it is almost impossible to compete without adopting TMS technology. Importantly, you don't have to buy all of the hardware and software anymore. You buy TMS capabilities on a software-as-a-solution (SaaS) basis.
Using TMS technology can also help you improve collaboration with transportation service providers. With improved communication and planning, you can better manage constrained capacity and enhance service levels—all at lower costs. A process that gets supply chain members and third-party service providers to work together to eliminate transportation inefficiencies. It is an extension of the collaborative planning, forecasting, and replenishment (CPFR) process established by the VICS organization. extends relationships between you and trading partners to one or more carriers and/or 3PLs. AsTable 7-6 shows, CTM initiatives can deliver impressive benefits to both you and your carriers. 1
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