Executive Briefings

The ROI Advantages of a Networked TMS Service

A networked transportation management service, in which key supply chain participants share information and visibility through a central hub, is more cost efficient and more effective than traditional transportation management applications, says Alan Dunkerley, vice president of product management at Descartes Systems Group.

In a networked model, such as the one offered by Descartes, not only is the software provided as a service - its value is enhanced by having all participants connected and able to easily communicate using standard messaging formats, he says.

Supply chain information often changes on a daily basis, Dunkerley notes. For example, he says, on a given day a vendor may be able to ship only 400 of a 500-widget order. "Everyone in the supply chain will have visibility to the fact that this will be a partial shipment. The distribution center operator can adjust the labor and load time, the carrier can be updated and an appointment confirmed and everyone will be on the same page. There will be no confusion or charges later on because of this order coming in short."

Another advantage - and an opportunity for quick return - is the ability for a shipper to see a carrier's capacity on a daily basis, Dunkerley says. "This lets a company make the most economical decisions about tendering its freight." If a company has a fleet, the use of route planning and optimization could improve vehicle efficiency and possibly lower the number of trucks required.

More functionality and services will be offered to participants in a network as this model evolves, Dunkerley says. And carriers and vendors will make better use of network data for analysis and decision making. For example, he says, data on volume moving through the network might inform decisions on such issues as where and when to open distribution centers.

To view this video in its entirety, click here.

In a networked model, such as the one offered by Descartes, not only is the software provided as a service - its value is enhanced by having all participants connected and able to easily communicate using standard messaging formats, he says.

Supply chain information often changes on a daily basis, Dunkerley notes. For example, he says, on a given day a vendor may be able to ship only 400 of a 500-widget order. "Everyone in the supply chain will have visibility to the fact that this will be a partial shipment. The distribution center operator can adjust the labor and load time, the carrier can be updated and an appointment confirmed and everyone will be on the same page. There will be no confusion or charges later on because of this order coming in short."

Another advantage - and an opportunity for quick return - is the ability for a shipper to see a carrier's capacity on a daily basis, Dunkerley says. "This lets a company make the most economical decisions about tendering its freight." If a company has a fleet, the use of route planning and optimization could improve vehicle efficiency and possibly lower the number of trucks required.

More functionality and services will be offered to participants in a network as this model evolves, Dunkerley says. And carriers and vendors will make better use of network data for analysis and decision making. For example, he says, data on volume moving through the network might inform decisions on such issues as where and when to open distribution centers.

To view this video in its entirety, click here.