Critical Considerations When Selecting a Transportation Management System

Even though transportation management systems (TMS) have been around for decades, there are still many companies that haven’t implemented one and are just starting to evaluate the different solutions and providers in the marketplace. What are some important considerations companies should take into account? How should they factor in pricing and deployment options? Are there important capabilities companies should look for beyond the basics? Those are some of the key questions I discussed with Anthony Vitiello, VP of Sales and Marketing at UltraShipTMS, during a recent episode of Talking Logistics.

How to start the selection process

Whether companies are looking for their first TMS or are interested in replacing an existing older system, the first question that usually comes up is how to get started with this process. I began our discussion with that question.

Anthony says, “While there are a lot of key questions such as functionality, data security, usability, integration readiness, price and many others, there is one consideration that supersedes all of these, and which if not considered invariably leads to lackluster results at best. It is critical companies look internally first to the business problems and challenges they are trying to solve. No matter how powerful the system they select is, if it doesn’t align with their challenges, it’s not going to be very effective.”

Another important consideration Anthony points out is the amount of control an organization wants over its logistics operations and data, and the bandwidth they have to address this. He says that for companies to have complete control and be able to leverage their data, they need logistics analysts with both a broad understanding of their logistics operations and an understanding of how to use the technology to mine the data for improvement opportunities. Companies that lack these capabilities often elect to outsource these functions to third parties with the knowledge they are giving up some control by doing so.

Control vs. Convenience

Anthony notes that the impact of the control vs. convenience deployment options mentioned above go deeper than the availability of internal resources. He says internal control gives companies much more visibility and potential for savings. For example, companies with visibility and analytics can better understand rate compliance and reasons for variances, perform root cause analysis on shipment and carrier problems, and evaluate corrective options. Anthony suggests that the savings potential under the control model outweighs any upfront costs for deployment, including perhaps needing to hire or train logistics talent. Anthony also addressed the pricing issues associated with these deployment options in a recent guest commentary he wrote for Talking Logistics entitled Who Pays for Low/No-Cost TMS?

Functionality differentiators

Obviously, in any selection process the functionality to meet a company’s needs is important. But Anthony points out that there is relative parity in functionality among the major TMS providers. They all will handle the majority of companies’ requirements.

Where Anthony sees a difference is in how well they integrate to other systems in your technology stack. “The next step in the evolution of supply chain and logistics systems is connecting critical operational data captured by transportation systems to other systems in your logistics tech stack, both upstream and downstream,” he says. “Connecting to your ERP, WMS, yard management and other systems will lead to more effective and efficient operations and insights. When selecting any supply chain system today, the digitization of information across the enterprise should be a key consideration.”

I agreed with Anthony that integration capabilities are a key consideration in any selection process, and failure to adequately address this issue is often the reason implementations fail.

Selecting a partner

I asked Anthony what, beyond what we had just covered, are the key considerations in selecting a TMS vendor. He mentioned a number of topics, including the importance of forming a partnership with your provider, but I don’t have space here to share all of his insights. Therefore, I encourage you to watch the full video to get all the details. Then keep the conversation going by posting a comment and sharing your own thoughts and experiences.