Modern-day transportation management needs are not well served by traditional transportation management system (TMS) technology, says Martin Verwijmeren, co-founder and chief executive officer of MPO. Today's highly complex supply chain world requires a more sophisticated platform.
“Multi-multi” is a coinage that describes the dynamic and often volatile environment in which companies work today: multiple channels, stores, sites, warehouses, factories, suppliers, sourcing flows, countries, currencies and languages. “For those who operate in international business, all of that makes a very complex structure with unpredictable behavior in the market,” he says.
Those who operate as if the supply chain is a “static reality” get sub-par results, Verwijmeren says. “Typically, they receive orders through an ERP [enterprise resource planning] system, move it over to a warehouse system, then to a transport system as if the world is linear, and it is not. So, absurdity prevails, but companies are still working with their static solution. We need to look at different ways to address complexity and other issues coming up because if you don't do so, then you will miss out on full performance. You will not make use of the lowest-cost options available in the market. And in the end, you will have less quality.”
So does the traditional TMS still have a role to play? Verwijmeren says it’s good for booking consolidations, carrier selection and rate calculation, but it’s limited in regional functionality and might not have strength in all modes. A “quantum leap” is needed that from the start “hooks” the TMS to order management: sales orders, purchase orders, transfer orders and return orders.
“The starting point is with the orders,” he says. “So that all shipments and bookings will always relate to the order lines and the products and the customers.”
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