Transportation management system (TMS) software has evolved in line with current market forces and customer demands for service in the age of the omnichannel, says Mark Nix, founder of Cloud Logistics.
SCB: What is the current state of the transportation management system (TMS) software market?
Nix: Companies today are looking for improved, real-time visibility, so that they can better predict when inbound shipments are going to arrive, and let customers know if there’s anything that could possibly go wrong on the outbound side. That feeds upstream planning and inventory levels, and other parts of the supply chain.
SCB: So this need is driving more companies to adopt TMS software?
Nix: It is. Around 2012, probably 35 percent of U.S. companies had a TMS. Today it's rapidly approaching 50 percent. Outside the U.S., it's probably less than 20 percent.
SCB: What are some of the biggest pain points that shippers are facing right now?
Nix: When I encounter a prospect who’s looking for a TMS for the first time, I find they're looking for reporting and dashboards for achieving visibility, to move inventory and lower their freight costs. They also want to become more productive as their shipment volumes and prices go up. Last year, we saw a huge capacity crunch. A TMS automates the process of sending out requests for spot quotes and evaluating the best response. You can do that in a matter of seconds versus taking hours before.
There’s a convergence of social and mobile technologies taking place. Companies today are looking for more granular information about each shipment, so instant messaging and the like become pretty important. In the past, a carrier would give you updates a couple times a day. Now shippers are looking for updates every hour, or even every 20 minutes.
SCB: How have TMS systems evolved? What’s the state of the art today?
Nix: Modern TMS systems have to be able to rate a shipment, track it, and handle auto pay with carriers. You have to provide reporting on carrier performance with key performance indicators. You need vendor portals so that you can integrate to a purchase order. You have to set up an electronic routing guide and allow vendors to send you advance shipping notices to update inbound shipments.
Shippers today are working with multiple modes, including truckload, less-than-truckload, rail, parcel, ocean and air. That creates the need for global trade compliance. On top of all that, the system needs to be easy to use. Companies don’t want to send employees away for three weeks of training, then have them come back and forget how to use the TMS. They're looking for solutions that they can deploy and get 100-percent usage.
SCB: What are the key benefits of a modern TMS?
Nix: Ease of use, rapid deployment, instant messaging, mobile technology. The advantage of putting solutions in the cloud. Large companies that previously had stuff behind their firewalls have realized that during a catastrophic event, their employees don't have to sleep in cots in the hallways and work from the office. They can work from their iPads on the road. Newer technologies allow people to be more productive, and conduct tasks from places other than the office behind the firewall.
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