Posted On December 15, 2021
How do you manage transportation without a transportation management system?
It’s not impossible, but there’s a better way. Modern TMS solutions help streamline a company’s supply chain, both increasing efficiency and reducing transportation spend. A transportation management system is a game-changer, and can help with everything from freight booking and managing transportation spend to route optimization and being able to track freight throughout the supply chain.
However, implementing and integrating TMS solutions requires an investment, both in time and money. And the success (or lack thereof) of the implementation can influence the entire success of a business and its supply chain. We’ve led dozens of companies through the process and want to share our lessons learned to help you attain the most benefits.
It all starts with some upfront planning.
Define goals for the transportation management system.
Just like any big endeavor, successful implementation of a transportation management system starts with setting goals. Typically, that means determining your company’s exact needs, including the ability to integrate with an ERP (or enterprise resource planning) system, WMS (or warehouse management system) or e-commerce website. But the more specific you can be, the better. What operational processes are wasting the most time for your company? What is currently being done manually that could be automated? Should users be able to do everything from a single platform or multiple platforms?
Integrating a TMS into a company’s workflows is a big investment—and not something you’ll want to have to redo down the line, so looking at your company’s growth plan is important. Think about the potential key functions you may need one year or even five years from now and consider those business requirements when evaluating prospective transportation management systems.
Organizing the list of transportation management system goals into must-haves, want-to-haves and don’t-really-needs can help you prioritize capabilities and find the best solution. Many companies make the mistake of purchasing solutions that come with too many unnecessary bells and whistles, features they won’t need now or in the future. Make sure your company understands exactly what it needs and what it doesn’t early in the process to help save on total cost.
Most companies don’t realize that the implementation process doesn’t have to happen all at once—and smaller businesses especially don’t need to automate the entire shipping process to see an impressive return on investment. Your company might see a big impact from automating just a few unnecessary manual processes, and then be able to focus on more time-intensive integrations later on.
Evaluate various transportation management systems.
The TMS market has been booming. With so many transportation management software options available, the TMS selection process can be daunting. Here’s where an RFP or requirements document with some of the goals you outlined earlier comes into play. Most transportation management systems are implemented in one of a handful of ways: purchasing an off-the-shelf TMS solution and installing it with internal resources or with help from a consultant, partnering with logistics service providers to integrate and customize their TMS, or partnering with both logistics service providers and a third-party consultant to integrate the TMS.
There’s no one right solution for all companies, and what works best for your business depends on your specific supply chain needs. We suggest investigating several options and meeting with potential partners to get a feel for the best fit.
Assemble the team.
The people involved in integrating the transportation management system can be as important to success as the transportation management system itself. Utilizing an entirely internal team can lead to reduced costs, as long as the team has both the necessary bandwidth and expertise. Otherwise, you’ll want to partner with a third-party logistics provider or consultant that has experience integrating transportation management systems with businesses that are similar to yours.
A common mistake at this stage includes not asking third-party companies about the scope of the project. How long it will take, the total cost and everything involved at each step are important to know ahead of time, as is the partner’s ability to stay in scope. Any big setbacks can cost both time and money.
The internal project team can vary in size and responsibilities, but involving a few people from various roles (including those who will be primary users of the TMS) can ensure no major capabilities are overlooked.
Prepare for a successful TMS implementation.
Planners of the world, here’s your time to shine. The project team (either internal or external) needs to create a detailed project plan or implementation plan outlining the expected dates of each milestone. This is especially true for companies that are launching their new TMS alongside other new systems, such as a new ERP. Smaller companies and larger shippers alike might also want to consider any seasonality in their business. For example, a company that ships 75% of its orders in the spring might plan for a fall launch to ensure minimal disruption.
Training is a vital part of implementation success. Plan to lead (or have your partner lead) software training sessions for the various service levels of your company, customized to cover the specific processes each department or division has. Depending on your organization, that might include anyone in finance, accounting, customer service, sales and more—anyone who will actively participate in using the TMS or need to update customers on the location of their shipment.
Beyond the initial training, encourage employees to take time to explore the new TMS software and everything it can do, so they can take advantage of all its functions and benefits.
Continually optimize your supply chain.
To successfully implement a transportation management system is one thing. Using it to its full extent is another.
Beyond the baseline automation and savings, a TMS can help a business continually improve its operations and processes. Your logistics team (or outside logistics partner) can do monthly or quarterly reviews of the data captured by the TMS to improve transportation operations, incorporating industry best practices and evaluating any new functionality needs.
The historical data can help you bridge the gap between where your company stands and its future goals. That includes identifying trends in your supply chain and streamlining processes, from weight, cost and destination changes to carrier optimization and selection decisions. When continually monitored, the new TMS can support sustainable, company-wide growth.
Curious how a TMS can help your business streamline its supply chain? Our proprietary TMS, Pipeline, can be customized to fit your needs and integrate seamlessly with your existing software. Contact us to learn more!