Before our recent webinar, "Transportation Management: Driving improvements in cost, quality, sales, and delivery," we conducted a transportation bench-marking assessment to discover industry trends and areas of opportunity in transportation management. Participants rated themselves on a scale of 1-3-5 on 26 statements based on their current operational condition.
Participants were then grouped into specific performance levels depending on their total points for the categories of People, Process, and Technology. The performance levels included:
NOT STABLE – no formal process or expectation in place
FUNCTIONAL – a process exists, but it is managed mostly internally, with little supplier / carrier collaboration.
HIGH PERFORMANCE - there is Plan-Do-Check-Act (PDCA) rigor that extends throughout all transportation partners (carriers and suppliers). All partners are engaged in this formal approach.
We shared the aggregate assessment results in the webinar and included some interesting findings around transportation management systems:
Opportunity 1: “Our transportation management system facilitates real-time, exceptions-based communication.”
For this assessment question, 57% of participants scored at the "unstable" level. A transportation management system should support a lean delivery management system, providing the appropriate level of visibility for each shipment for real-time decision making. By understanding trends over time, shippers or their third party logistics providers can predict and manage delays before they become problems.
Opportunity 2: “Our transportation management system easily integrates with our other systems.”
For this assessment question, 62% of participants scored at the "unstable" level. An effective transportation management system should enable the shipper to find value in its transportation, ensuring optimal routing in terms of customer business rules and service (i.e. transportation cost). Equally important is connecting transportation to manufacturing and inventory strategy to drive lean supply chain operations. In order to do so, you need seamless data transfer and integration.
Opportunity 3: “Our transportation management system can notify us of an incomplete shipment and available recovery options before delivery.”
An overwhelming 73% of participants scored at the "unstable" level. Time to react is critical to reducing and avoiding cost. Systems like LeanCor’s Orloe Toolkit can proactively notify you and your stakeholders when events within the supply chain happen. Such situations can include:
- An order quantity has been revised
- Route instructions have been released
- A discrepancy between your order quantity and the supplier's ship quantity has occurred
- The supplier has failed to enter a ship quantity or the quantity recorded was zero
Transportation Management Systems (TMS) continue to offer a strong ROI for shippers, and that trend shows no signs of slowing down any time soon. From designing routes to changing the way a business handles its freight auditing, a transportation management system can be a solution to many transportation problems. Rather than define a process (off-the-shelf product), a transportation management system should serve to support process discipline – in other words, create the optimal process, then automate it with technology. When leveraged strategically, an effective transportation management system can drive lean principles such as standard work, stability, visual management, and waste reduction through transportation functions.
Technology should also provide increased, actionable data access. Event data (or real-time data) are the voice of the process as the process is in operation. In other words, event data are the feedback from our processes at the exact time they are being executed. These data are powerful, but hard to gather. Without event data, we continue to manage with information derived from historical data and consequently cannot manage in a timely manner. When we do capture event data, they enable us to make sound business decisions in real time. The ability to make real-time decisions is crucial to waste elimination and lean implementation.
How does your transportation management system stack up?
Posted by LeanCor Supply Chain Group
LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.Facebook LinkedIn Twitter Google+