What are some of the factors that are driving the need for innovation in transportation management systems (TMS)? “It’s all about customer satisfaction,” said Mike Dieter, Chief Technology Officer at Transplace in a recent episode of Talking Logistics. “Making sure, for example, that a truckload of sugar gets to the factory on time…We have to satisfy our customers and they have to satisfy their customers, and a transportation management system (TMS) is at the heart of accomplishing that goal.”
The fact that many shippers today are leveraging more modes in their transportation operations, including parcel and ocean, is another contributing factor. So too is the ever-more-challenging need to have timely and accurate visibility to shipments, orders, and inventory, which is giving rise to “control tower” platforms and services. And of course, cost reduction and control is always a driving force.
In light of these factors, what are some of the most important attributes of a next-generation TMS?
“Visibility is on top of the list” said Dieter. “It’s about making it easier and faster for shippers to see what’s happening across their network, which is leading to more graphical user interfaces with drill-down capabilities. Then you have optimization. We’ve all done the travelling salesman problem, but now we’re getting into more sophisticated optimization problems and strategies, which requires more sophisticated algorithms and approaches to optimization. [Business Intelligence] capabilities are also becoming more important. Years ago I could get away with providing a few reports to clients, but shippers today want access to a lot more data and ways to analyze it. So the innovation here is giving customers direct access to the data and enabling them to conduct their own analysis and create their own reports.”
Dieter summed it up this way: “Transportation management systems need to become more proactive instead of reactive,” which is why TMS providers are starting to add predictive capabilities to their solutions. “We’re taking initial steps incorporating weather and traffic data into the TMS and we’re working with our users to determine the next steps in predictive analytics, but it’s here, the data is available, and people are saying let’s use that data to make better decisions.”
Like all software, a TMS is just a tool; you also need knowledgeable people who know how to use it effectively. As these solutions continue to evolve, will the role and skills of TMS users need to change too? Watch the short clip below for Dieter’s response:
“I was at a client recently and they were looking to hire a person who would be able to sift through all the data and tell a story about it to all levels of management,” said Dieter. “That’s a pretty special skill, being able to analyze data, create a report, and communicate the findings effectively up the tiers of management. Logistics groups are not looking for people who will just pick up the phone to find out where a truck is; they want people who can do analysis and forecasting, and they’re going to need more people with those skills as TMS solutions continue to evolve.”
I encourage you to watch the rest of my conversation with Mike (embedded below) for additional insights and advice on this topic, including the growing use of APIs and how next-generation TMS are helping 3PLs provide better service and benefits to clients. Then post a comment and share your perspective: How would you define the future of transportation management systems and its users?