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With transportation networks becoming increasingly global and complex in nature, more shippers and 3PLs are investing in transportation management systems.If you’re not using a TMS and the last time you shopped for one was five or more years ago, take a second look today. The same is true if you developed your own solution because you couldn’t find what you needed in the past. What you’ll find today might surprise you.
Many shippers and 3PLs are aware of the ongoing digital transformation and aspire to use TMS data to form business strategies and competitive advantage. But how should you approach the selection of a transport management system?
In this blog post we'll explore 5 steps you should consider before selecting a logistics control tower or transport management system.
Step 1: Document your current processes (how do you do it now?)
If you haven’t done so before: describe the processes and activities, systems, people, and data flows within your own organization as well as your suppliers and customers that touch your transportation flows. To do this, you should involve more than just your Logistics or IT departments. Your Supply Chain and Transport departments touch all aspects of your business in some way, so be sure to involve all of them to ensure all linked processes and touching points are covered. Don’t forget to identify a project member that can represent the views and needs of your customers and suppliers to take the impact on your external partners into account.
Create flow charts to provide a clear view of the current processes, the bottle necks and interactions between departments and external parties.
Note the elements of your current way of working that requires improvement because they’re too costly, too labour intensive, too slow, not meeting your customer’s expectations, are prone to errors, etc. Identify what processes need to be fixed or improved. Identify the bottle necks. What is the impact of these bottlenecks, on who does it affect?
Step 2: Describe the required solution (How do you wish things were done?)
Describe your ideal situation: How would you ideally manage transportation, what activities aren’t adding real value to your organization or your customers, what services do you want to provide that you currently can’t? In short, what would a perfect setup to manage your transportation look like?
Describe the desired results of your ideal set up and prioritize your requirements. What functionality is essential, and what is just nice to have?
Make sure to clearly identify and describe the advantages of your ideal setup versus your current setup: Provide better service to your customer by providing visibility and transparency, get a better view of the quality of your suppliers, reduce staffing costs, be more agile, reduce manual activities, get insight on hidden costs, reduce errors, improve delivery performance, communicate in a structured and efficient way, etc. This list of benefits will be used in your business case.
Step 3: Select potential suppliers
You have listed your requirements, now it’s time to select potential systems and suppliers. Ask the suppliers how they would solve your issues – which elements of their offered solution solve your problems without the need for custom development or additional systems. How do they connect with other systems within your organization or within your suppliers’ and customers’ organizations? Do they provide cloud-based web solutions? Do they provide mobile solutions? Does their solution solve all of the “must have” elements of your requirements, or do you need to combine elements of different solutions?
Important points to get clarity on are continuity and future developments. What is the supplier’s vision on future developments? Will you automatically benefit from enhancements in future releases? Do you have any influence on defining the development road map?
Make sure you understand their costs structure to complete your business case: What are your fixed and variable costs, what are the costs for support? Do you get free updates and improvements? What are the possibilities for customization and how would the costs for these be calculated?
During this initial selection, it is recommended to indicate your planned timelines and request the implementation timelines and approach of the selected vendors. Based on the information you received, you select a limited number of suppliers. Be transparent with these suppliers; provide full details on your current processes, your bottlenecks and the problems you want to see solved. Ask the selected providers to demonstrate how their solution would solve your problem, not only on paper or Powerpoint slides but in reality, with a simulation using their software.
Step 4: Create your business case
You create a business case to determine whether it make sense to invest in a Control Tower or Transport Management. Although it is mentioned as step 4 in this process, the creation of the business already started before or during step 1 by describing the problems you want to have solved. During step 2 is where you start to describe potential solutions (your ideal situation), and you update this based on the received information.
In this phase you will be able to identify the impact of doing nothing and compare it with the impact of implementing the proposed solutions. Now you will be able to determine costs versus benefits; make sure you don’t only focus on financial benefits (reduce required staff, time required per order/report/invoice/POD, etc.) but also the qualitative benefits (providing a better service to your customers, attracting more business, efficient communication, improved relations with your suppliers, connectivity with other internal and external systems). Using a collaborative system that provides real time information and communication in a structured way — “a single version of the truth” for all business partners and departments provides numerous qualitative improvements.
Step 5: Select, Scope and implement!
Based on the previous steps you should be able to know what you want, the possibilities that you have to solve your problems, what your benefits and ROI are and which supplier provides you with the best solution.
Now it is important to properly scope the project. Be specific: What needs to be delivered, who needs to be involved, what will be the costs and what will be the timelines. Proper scoping benefits both your organization and your suppliers.
Analyze the scope together with your supplier – get confirmation from all stakeholders that your scoping document contains all your must-have requirements and determine your acceptance criteria.Let your supplier be clear on what is expected from your organization in terms of resources and time.
Work out an implementation plan with clear timelines and expectations; include regular progress reviews and a testing period in which you test the solution against your User Acceptance Criteria.
You’re set to go
Once you feel confident you can place your order, kick off the project, implement, and enjoy the benefits. Make sure to check out this page to explore some possibilities.