Analyst Insight: Small and medium-sized enterprises (SMEs) face many of the same supply chain issues as large companies: supply outages, labor shortages, tight transportation capacity, port congestion and more. Larger companies can deploy multimillion-dollar software applications to guide everything from sourcing to warehousing, while SMEs remain stuck with a myriad of disparate systems and archaic methods. They need tools to be competitive, even as they struggle to afford or even understand them.
Large companies mitigate the impact of unforeseen supply chain interruptions using applications such as enterprise resource planning (ERP), transportation management systems (TMS), sourcing management and analytics. To manage transportation operations, SMEs use manual processes with Excel spreadsheets, individual carrier and broker logins, PDFs and e-mail. SMEs contact carriers to find capacity at a rate shippers want to pay, then book the freight directly. If the SME uses a TMS, the shipper can receive multiple freight estimates, schedule shipments and track shipments, all from a single dashboard. Yet there’s no central repository for data, and no way to use the data to make tactical decisions. For years, even large companies have chased down a “big-data” solution with mixed success. Today, platforms are emerging to aid even the smallest of companies in this mission-critical quest, a game changer for any company.
Automating processes that involve paperwork and manual tasks like purchase orders, customer invoicing and document management frees logistics managers to focus on customers’ needs. Automation lets shippers perform their day-to-day tasks in less time, leaving more hours to focus on profit-making activities.
The TMS must be easy to use, so that small shippers can be up and running quickly without extensive training, IT support and customization. Many TMS systems run in the cloud and can use application programming interfaces (APIs) for easy integration with other systems such as load boards, accounting apps, internet of things (IoT) devices and business intelligence tools. Software-as-a-service-based TMS models are supported by the vendor, so users don’t have to worry about employing an IT staff for implementation and upgrades. Many emerging technologies contain a startup assistant to help the user customize and make intelligent choices.
TMSs help SMEs to compete against larger companies. Shippers can choose lanes with a preferred carrier that provides the best quality service for the best price. Technology is the key to making the customer experience the best it can be.
Many TMSs feature digital load tracking on trucks and load locations that are shareable with customers. Just as Amazon.com lets customers track orders, TMS users can alert customers to any delays. By tracking shipments, small businesses can also identify inefficiencies in their operations.
Previously, the decision to purchase a TMS was based largely on price. Many TMSs today are more affordable, easier to use and more flexible for smaller shippers. Some vendors offer “freemium” models, whereby a basic TMS can be deployed at no charge. These provide basic freight rate quotes; electronic carrier dispatches; access to carrier rates, spot-market or market load boards; bills of lading; shipment tracking and basic reporting. If the shipper wants more advanced features, such as analytics, freight bill audit and pay, parcel management or network mode optimization, they can upgrade to a paid model.
Outlook: Using TMS technology, SMEs can do more with less, improving productivity and realizing efficiencies that drive value and reliability throughout the supply chain. With a TMS, businesses can provide a better customer experience, reduce costs and streamline operations. This can level the playing field to help SMEs compete with bigger companies.
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