Executive Briefings

Transportation Management: Trends and Advancements for the Next Decade

Analyst Insight: Today's transportation organizations are being affected on all sides by rising costs and demands. Top performers in this economy are extending beyond the basics of domestic and international systems and beginning to create and extend automated processes to address advanced capabilities like dynamic optimization and the daily use of analytic tools to monitor events and communicate and collaborate on a near real-time basis.

In the Aberdeen Report Mid-Year Insights 2009, we noted that transportation costs were found to have the highest impact on supply chain execution.  Indeed, in our latest study (October 2009, "Integrated Transportation Management: Improve Responsiveness with Real-Time Control of Execution") 77 percent of respondents listed a growing awareness of transportation cost and service to the overall supply chain as their top pressure.

With such focus, most of today's transportation executives are putting time and investment into automating all of their processes, from domestic and international TMS (tendering payment electronically, sharing shipping schedules, routing and scheduling) to fleet and parcel. Given that overall technology adoption is similar across industries and revenue categories, it is the process-side of the equation that differentiates high-performing companies from their peers.

Best-in-Class companies were those who delivered top performance in transportation spend while monitoring and delivering to on-time and complete requirements. The key differentiators are that Best-in-Class companies are more heavily embracing end-to-end process capabilities like more frequent and robust use of supply chain visibility, collaboration both internally and externally, and more advanced and near-real-time deployment of dynamic transportation optimization in execution:

• Advanced supply chain visibility capabilities. Best-in-Class companies are 2.3 times as likely to measure external group (suppliers/carriers/3PL) performance weekly and they are 2.3 times as likely to use supply chain visibility software.

• Advanced dynamic optimization capabilities. Best-in-Class companies are 2.27 times as likely as all others to use software to automate dynamic shipment routing instructions, and they are 29 percent more likely to use dynamic shipment optimization software.

In the new decade, companies will continue placing heavy emphasis on improving transportation capabilities to sustain and improve supply chain performance. In order to move toward Best-in-Class status, companies should:

1. Acquire supply chain visibility to the item/inventory and landed-cost level
2. Employ near real-time dynamic optimization to enhance cost/service
3. Enhance collaboration with internal groups and external customers and trading partners

In the Aberdeen Report Mid-Year Insights 2009, we noted that transportation costs were found to have the highest impact on supply chain execution.  Indeed, in our latest study (October 2009, "Integrated Transportation Management: Improve Responsiveness with Real-Time Control of Execution") 77 percent of respondents listed a growing awareness of transportation cost and service to the overall supply chain as their top pressure.

With such focus, most of today's transportation executives are putting time and investment into automating all of their processes, from domestic and international TMS (tendering payment electronically, sharing shipping schedules, routing and scheduling) to fleet and parcel. Given that overall technology adoption is similar across industries and revenue categories, it is the process-side of the equation that differentiates high-performing companies from their peers.

Best-in-Class companies were those who delivered top performance in transportation spend while monitoring and delivering to on-time and complete requirements. The key differentiators are that Best-in-Class companies are more heavily embracing end-to-end process capabilities like more frequent and robust use of supply chain visibility, collaboration both internally and externally, and more advanced and near-real-time deployment of dynamic transportation optimization in execution:

• Advanced supply chain visibility capabilities. Best-in-Class companies are 2.3 times as likely to measure external group (suppliers/carriers/3PL) performance weekly and they are 2.3 times as likely to use supply chain visibility software.

• Advanced dynamic optimization capabilities. Best-in-Class companies are 2.27 times as likely as all others to use software to automate dynamic shipment routing instructions, and they are 29 percent more likely to use dynamic shipment optimization software.

In the new decade, companies will continue placing heavy emphasis on improving transportation capabilities to sustain and improve supply chain performance. In order to move toward Best-in-Class status, companies should:

1. Acquire supply chain visibility to the item/inventory and landed-cost level
2. Employ near real-time dynamic optimization to enhance cost/service
3. Enhance collaboration with internal groups and external customers and trading partners