Strategic vs Tactical Transportation Management System (TMS): Which is Right For Your Business?

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In logistics, managing transportation is a series of day-to-day, tactical activities performed to move goods and information. But when put together strategically, these activities can have a significant impact to business cost and performance.

At LeanCor, we took this core principle into consideration when deciding whether to "make or buy" our transportation management system at the company's inception. Since then, our relentless commitment to continuously improve our proprietary software has been validated by "out-of-the-box" thinking and several lessons learned along the way.

5 Questions to Ask Before Investing in a Transportation Management System (TMS)

When deciding to invest in a transportation management system (TMS), here are five questions to ask based on where your business needs to be for the long term.

1. Do we have a transportation management strategy?

Many businesses struggle with having transportation processes that are simultaneously stable both operationally and financially. This conflict often results from not viewing transportation as a core function or priority. In these cases, transportation is a "necessary evil" in order to move goods to the customer. But what if that necessary evil could be connected to your overall business strategy and move from a cost center to a profit center?

2. What level of visibility and control do we need?  

To move transportation from a cost center to a profit center, businesses need adequate control and visibility of transportation - sometimes all the way to the SKU level.

Strategic TMS solutions with logistics control tower-connected systems in order management, routing, load tendering and tracking can provide the right level of supply chain information and drive effective decision making. The transportation function moves from simply moving a truck to asking, "What parts are on the truck? How much space on the truck are those parts occupying? What's the Plan For Every Part (PFEP)? When and at what standard cadence can the truck be scheduled?"

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"The buyer/planner role has been improved by your tools, which have given us greater visibility of our supply chain than we have ever experienced before. Your ongoing effort to improve your tools is constantly making our employees more efficient.” – VP, Materials & Logistics

3. What's the best "tool" for the job?

As your strategy evolves with changing business conditions, existing off-the-shelf software can quickly become outdated or expensive with custom code updates. That's why businesses that are implementing strategic TMS solutions realize that transportation management systems are not a "one-tool-fits-all" or silver bullet approach.

Bolting together an ecosystem of modular, integrated partners (even with potential overlap) can often be a faster way to leverage the best of today's available technology for different functions that ensure competitive rates and service.

4. What areas of cost do we want to minimize?

Polaris Routing Improvement Post JUL 2020

 

Tactical TMS software is typically laser-focused on decreasing transportation rates alone. This silo-ed approach disregards significant areas of savings opportunities in Total Logistics Cost: dock performance, buyer-planner productivity, and costs in warehousing, ordering and inventory-carrying.

Both parties often lose when shippers beat down carriers on rates to the point that they are running down the road unprofitably. A strategic TMS solution will focus on things like trailer utilization, total miles ran, equipment waiting time, and adherence to routing guides.

5. Do we need "Software AS a Service (Saas)" or "Software AND a Service?"

Today's shipping departments are changing. In many cases they're small teams - who wear many hats - without knowledge of how to fully implement or leverage an SaaS TMS (let alone keep up with industry knowledge and market trends).

With software "and" a service solutions, managed transportation service providers like LeanCor provide quality relationships and processes to plan, execute, and improve upon the right strategy for your business. This includes efficiently designing your network, cleansing data, driving daily continuous improvement and mitigating market disruptions to cost and service.transportation-management-load-board

In tight markets, these partners can prove invaluable by ensuring a solid baseline of coverage and performance with the right asset carrier-to-broker mix. Non-asset based partners like LeanCor can also offer performance-based pricing models without hidden fees and rate markups. These flexible models focus on realized results that are driven by customer-centric cost and service decisions.

Whether you need simple plug-and-play software or a full-service partner, consider a solution that goes beyond "good enough for now" to truly advancing your supply chain -- and ultimately, your business.


 

TMS Done Differently

Not all transportation management systems on the market are equal in capability. In fact, many lack what we see as critical features. Many of these "good enough" providers have gone unchecked by lowering their clients' standards.

That’s why we chose to develop our own technology that does what today’s shippers need to mitigate industry disruption. Our strategic TMS solution breaks down supply chain silos, drives unmatched accountability with suppliers and carriers, and provides real-time data and visibility.

Learn More and Schedule Demo

 

Posted by LeanCor Logistics

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