September 4, 2015

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Technology trends in Transport Management System

Transport Management System is any technology solution that helps companies efficiently, reliably, and cost effectively move freight from origin to destination, including both planning and execution solutions and fleet management solutions (for freight moves involving transportation assets owned by the company). Shippers are embracing both sides of TMS, mainly owing to the strong ROI offered up by such solutions.

As per a survey done by major companies, over 40 percent of respondents felt that if they were forced to give up their TMS and go back to more manual processes for planning and execution, their total freight costs would increase by 5 percent to 10 percent. In fact, 23 percent felt their total freight costs under the control of the TMS would increase by over 10 percent if they were to stop using it.

For logistics professionals charged with the movement of freight, TMS can also help create transportation efficiencies, provide real-time dashboards, enable better decision making, predictive maintence of the vehicle and driver’s efficiency, other tasks that can’t be adequately addressed with phones, faxes, and spreadsheets.

The fastest growing enterprise application market is on track to continue its double-digit growth trend over the next 12 months. Here are key trends that supply chain software analysts say are shaping the TMS landscape­—­and pushing more logistics managers to finally put it to work.

  • Support to omni-channel retailers :In today’s competitive and dynamic market conditions, retailers need to have seamless and effective omni-channel systems where TMS plays a major role. TMS needs to have capability of primary as well as secondary distribution for end to end visibility.
  • Transport management across countries :Since transport management is becoming more matured and growing beyond country borders (eg : cargo moved from China to Vietnam by road), visibility becomes all the more essential for tracking trucks as well as cargo to both inward and outward countries as well as delivery locations to ensure that the trucking turnaround is effective and optimal.
  • Strategic planning – in the Transport Management System :By adding tactical planning to the mix, shippers can figure out the impact of fuel changes, carriers going out of business, or how to manage around a strike at a major port. These features are already available in mature products like oracle and JDA. 3PL’s still cannot afford this module on strategic planning since their IT spend is less than $100 Million an year.
  • Embedded analytics – High demand:Bombarded daily by terabytes of digital information, shippers need a way to wade through the data, select its most useful components, and then use that information to make the best possible transportation decisions.
    A TMS that includes carrier score-carding, for example, should be able to cross-pollinate that rating information for application during the vendor-selection process. Embedded analytics allows shippers to come up with useful key performance indicators and actually consume and utilize the data as they go about their other activities.
  • Freight Forecasting : Till now freight forecasting is the biggest challenge faced by the 3PL’s and technology companies. But with the help of digital technology, demand sensing, inventory optimization, and transportation forecasting is now possible.
  • Big data :Big Data is the area where most of the 3PL are investing because most of the data’s are in the siloed manner since most of the 3PLs have legacy system which cannot be integrated.
    Most 3PL’s have legacy systems which cannot integrated resulting in siloed data across all the systems. 3PL’s are increasingly investing in Big Data to make sense of this information.
    Now with the help of technology companies, big data is integrated leading to report generation, operations excellence and revenue growth.
  • Conclusion :Most of the above mentioned points are emerging trends in logistics and distribution. Hi-tech solutions will radically help face the challenges faced by the 3PL’s in these segments.
    HCL is focusing on building new solutions and propositions to meet increasing customer expectations in the 3PL industry.