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After more than 20 years in the logistics business, Mulqueen says he still sees shippers struggling with the problem of "ships passing in the night." This refers to an inbound truck passing an outbound truck, often with one of those trucks being empty, McQueen explains, adding that this is but one of the issues that results from inbound and outbound transportation being run in functional silos and on separate systems.
"There typically is a bifurcation, where companies have decentralized routing and scheduling on the outbound side and centralized planning with a transportation management system on the inbound side," says Mulqueen. A much better approach - and one now being taken by Manhattan Associates and other TMS providers, is to look at this as one single problem, "where we can run routing and scheduling simultaneously with TMS," he says. "This enables us to really reduce empty miles by tying inbound and outbound shipments into a continuous move." Similarly, private fleets can maximize backhauls in a way that reduces overall transportation spend or, in some cases, generates revenue by moving freight for third parties, he says. "When the TMS controls all transportation, it is possible to identify consolidation opportunities that improve efficiency. And in today's environment of tight capacity and high fuel costs, inefficiencies are being penalized to a greater extend that at any time in the last decade," he says.
Analogous problems arise where there are separate silos and separate applications for warehouse management and yard management, Mulqueen says. "In the logistics world, we see a proliferation of applications" from transportation management to routing and scheduling, yard management, warehouse management and global trade management. "But there is tremendous value in looking at supply chain execution holistically," he says. "By that, I don't just mean integration - though there certainly is value in integration, particularly if you have multiple point solutions. But I am referring to the real business value that can be created by tying distribution, yard and transportation management together on a single platform."
One example is the value created by trailer pools, a tactic that more shippers want to implement as capacity tightens, he says. "To build trailer pools, my TMS system needs to be cognizant of what trailers are in the yard, which requires that touch point with the yard management system," he says. Mulqueen also cites replenishment planning and the value that lies in understanding the impact of promotions or seasonal surges on transportation requirements. "Carriers need to have short-term forecast information that allows them to better plan their assets," he says. "A single platform approach that takes into account replenishment planning as well as transportation planning and enables carriers to get short-term forecasts is another way to add tremendous business value to the organization." He notes that every time a carrier declines a tender and the shipper has to go deeper into its routing guide, it costs about 2 percent more. "So if load acceptances can be increased from 90 percent to 98 percent by providing better information to carriers, there is a huge savings."
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Keywords: supply chain, supply chain management, global logistics, transportation management, logistics management, warehouse management, logistics & supply chain, warehouse management systems, transportation management systems
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