Executive Briefings

Transportation Management Tech Advances Create BI, Enable Cross-Functional Integration

Analyst Insight: Shippers have made great advances in transportation management in the last decade by centralizing procurement and transportation planning organizations, as well as investing in TMS. The question now is: What's the next big thing? As the use of supply chain technology and information sharing grows, there is an increase in the meaningful use of information and integrating transportation with other functions. These areas have already demonstrated significant benefits for pioneering shippers and are clearly breakthroughs in transportation management. - Bill Loftis, principal, Tompkins International

Transportation excellence has traditionally been limited due to lack of visibility, both upstream (before planning) and downstream (after execution). Forward planning is characterized by traditional over-the-wall silo processes and systems interfaces, in which requirements are not visible until after orders are placed. The result is that transportation has an extremely limited planning horizon from which to optimize.

Post-execution visibility has also been limited, but this is not due to lack of information. TMS offers tremendous information detail; however, the transactional information provided is so extremely large, it is nearly impossible to identify meaningful trends and variances. To overcome these challenges, new solutions - integrated planning and transportation business intelligence - are being utilized and adding tremendous value.

Integrated Planning -  Tompkins has partnered with a firm that has broken down the wall between replenishment buying and transportation. The solution looks at order patterns - either historical or project demand - at a lane basis and determines the optimal transportation plan and the ordering pattern to accomplish it. It reports on the inventory impact of this optimal plan. Intelligent decisions can be made that incorporate the entire inbound supply chain (both the inventory and transportation components) making this a groundbreaking achievement. Case studies reveal the typical benefit of an optimal plan is 7-percent improvement over a traditional robust TMS solution.

The challenge will be change management - the beneficiary is primarily transportation, but the users are inventory managers.

Transportation Business Intelligence - BI software applications are becoming more common across the corporation and have excellent utility for transportation users. They are always hungry for information, but traditional metrics are aggregated in such a way that the information cannot be executed. For example, a report might show that a facility's cost per unit has increased, but at the aggregated level, a user cannot identify where it occurred, so it lacks information on what to do about it.

Disaggregating to the lane or carrier level is possible - but not manageable - with spreadsheet reporting. This is due to the vast number of lanes in the shippers' networks.

BI applications reveal this information quickly and precisely, identifying issues that need to be corrected. With the proper targets and variance reporting, transportation BI can be created as an exception management process, in which a user, on a systematic basis (preferably weekly), can be informed when lanes, carriers, facilities and so on do not meet a target. Business changes that may have gone undiscovered for six months or a year can now be found immediately. Transportation BI is a strategic solution, enabling transportation users to make changes based on the reality of execution in an environment that is always changing.

                                          The Outlook

Large shippers are beginning to implement these systems, and data service providers are incorporating them in their service bundles. The biggest challenge is affordability. At the same time, companies do not like to invest in measurements, and most packaged systems on the market are expensive. But this will be changing as custom-designed, affordable micro BI applications that fit the transportation budget hit the market.

Transportation excellence has traditionally been limited due to lack of visibility, both upstream (before planning) and downstream (after execution). Forward planning is characterized by traditional over-the-wall silo processes and systems interfaces, in which requirements are not visible until after orders are placed. The result is that transportation has an extremely limited planning horizon from which to optimize.

Post-execution visibility has also been limited, but this is not due to lack of information. TMS offers tremendous information detail; however, the transactional information provided is so extremely large, it is nearly impossible to identify meaningful trends and variances. To overcome these challenges, new solutions - integrated planning and transportation business intelligence - are being utilized and adding tremendous value.

Integrated Planning -  Tompkins has partnered with a firm that has broken down the wall between replenishment buying and transportation. The solution looks at order patterns - either historical or project demand - at a lane basis and determines the optimal transportation plan and the ordering pattern to accomplish it. It reports on the inventory impact of this optimal plan. Intelligent decisions can be made that incorporate the entire inbound supply chain (both the inventory and transportation components) making this a groundbreaking achievement. Case studies reveal the typical benefit of an optimal plan is 7-percent improvement over a traditional robust TMS solution.

The challenge will be change management - the beneficiary is primarily transportation, but the users are inventory managers.

Transportation Business Intelligence - BI software applications are becoming more common across the corporation and have excellent utility for transportation users. They are always hungry for information, but traditional metrics are aggregated in such a way that the information cannot be executed. For example, a report might show that a facility's cost per unit has increased, but at the aggregated level, a user cannot identify where it occurred, so it lacks information on what to do about it.

Disaggregating to the lane or carrier level is possible - but not manageable - with spreadsheet reporting. This is due to the vast number of lanes in the shippers' networks.

BI applications reveal this information quickly and precisely, identifying issues that need to be corrected. With the proper targets and variance reporting, transportation BI can be created as an exception management process, in which a user, on a systematic basis (preferably weekly), can be informed when lanes, carriers, facilities and so on do not meet a target. Business changes that may have gone undiscovered for six months or a year can now be found immediately. Transportation BI is a strategic solution, enabling transportation users to make changes based on the reality of execution in an environment that is always changing.

                                          The Outlook

Large shippers are beginning to implement these systems, and data service providers are incorporating them in their service bundles. The biggest challenge is affordability. At the same time, companies do not like to invest in measurements, and most packaged systems on the market are expensive. But this will be changing as custom-designed, affordable micro BI applications that fit the transportation budget hit the market.