TMS: The Missed Golden Goose Of ERP

In the last decade, ERP has become the new normal of the business world and supply chain management the most proprietary offering it brings to the table. One of the pillars of supply chain management is what we call Transport Management System (TMS). This logistic platform helps to plan, implement and optimise transportation of goods with the help of technology. By taking charge of every incoming and outgoing shipment, it not only ensures compliance but also is the epitome of efficiency.

The primary target segment for TMS solutions are small to mid-sized companies. The rationale behind this is the lack of global reach and resources these companies have at their disposal. It is no secret that ERP though invaluable does come at a cost, one which this segment cannot afford. Not to mention the lack of infrastructure, supply chain visibility and organisational depth they go through. With all these factors, the only way out for small to mid-sized companies is hiring

a TMS service provider. One with the expertise and infrastructure to close these gaps.

TMS brings a whole host of benefits to the table for small to mid-sized companies. From an established supplier network to strong processes, the target segment would scale up and attain operational efficiency, killing two birds with one stone.

To speak volumes, let’s take a case of a supply chain service provider. One of the primary services in the supply chain business is Freight Management service. If a business hires a TMS provider, the cost savings on freight rates is 5-15% on an average. If that is not enough, one could also link it to their order management and distribution management systems. With access to a greater number of name brand carriers and TMS capability via a mobile device, the customer could instantaneously arrange for freight, optimizing cost and service parameters in real-time, and give real-time visibility to their shipments anywhere in the world, 24/7/365. For small to mid-sized companies, operational efficiency is the need of the hour making TMS’s worth weight in gold. In which case, the million-dollar question is why the business world has not grabbed this opportunity with both hands?

Just like every coin TMS has two sides to it. Though the benefits are invaluable, there are certain obstacles hindering the adaptation of TMS solutions across businesses globally. The first and foremost obstacle is pride. For, every company has a supply chain and an existing supplier network hence an external service provider coming in and telling the company what can be done to improve. That is bound to hit a few nerves and rattle up the existing suppliers.

The next obstacle for a company is the loss of control. Companies seek to have a firm grip on their supplier network and stay in charge of the supplier relationships. Outsourcing that to a TMS service provider will result in not having direct control as the provider brings to the table hundreds if not thousands of new carriers to bear. The risk of losing out on supplier relationships can pose a grave hindrance towards hiring a TMS solution.

The next challenge in this regard is the do-it yourself approach. Often procurement employees are of the opinion that a company can afford and maintain a TMS solution of its own and convince the upper management of self-installation as an investment with long term returns.

Next and probably the biggest hurdle companies need to cross is the resistance to change. The ideology of my way or the highway is more common than one would like to admit. The followers of this ideology till date are only familiar with direct phone contact, sending faxes, manually scheduling and tracking shipments, and manually handling invoices and order reconciliation. The opportunity cost for this ideology is operational efficiency and is detrimental to growth.

The last obstacle towards hiring a TMS solution is lack of resources. A TMS solution from a service provider will need investment of manpower especially from IT, finance, supply chain and operations domain. In some companies, employees may not have the luxury of time to work on this project.

How to overcome these obstacles?

The key to overcoming these obstacles is a Cloud-Based TMS solution. A partner with a cloud based TMS solution already has in store the software development, management, maintenance, and supplier relationships. Hence instead of blocking funds, hiring a provider with the expertise and infrastructure is a smarter way especially for small to mid-sized companies that do not have funds at their disposal. An automated TMS solution will also improve productivity, speed, service levels and visibility. A change management program educating on the benefits and making employees comfortable with the TMS solution by the service provider will get the reluctant employees onboard. While some companies may think TMS is not worth their time, a growing company with higher customer service standards cannot afford to wait for an in-house solution if not it will end up biting a bullet. At the end of the day it all boils down to a company’s leadership. Smart leaders seek results be it in-house or outsourced. For if a service provider is able to negotiate and give better terms, a good leader would not call it lack of control but delegation as the service provider works on the targets given by the leader himself.

To speak volumes of the usefulness of cloud based TMS solutions let’s take the example of food ERP. ERP for food is now a prerequisite and with TMS food manufacturers and distributors have just upped their game.

By consolidating the manufacturing and transportation of food products in an integrated management system like TMS, food ERP has ensured the following:

1. The maintenance department can identify time and downtime to deliver proper preventive maintenance.

2. The warehouse department has proper levels of inventory, such as raw material, semi-finished goods and finished goods.

3. The logistics department affirms delivery schedules are maintained and compliant

In addition, ERP for food with cloud based TMS brings to the table real time updates by tracking business variables like manufacturing times, delivery cost and delivery times. The icing on the cake being with food ERP, food manufacturers can manage recipes, quality control, compliance and traceability simultaneously. This knowledge and efficiency paves the way for planning and implementing a business strategy that can tip the scales in favor of food manufacturers.

ERP for food with cloud based TMS solution helps food businesses reduce manufacturing waste, improve communications, allows for better planning and, ultimately, increase profitability. On the other hand, for customers, it means they receive the right product with the right quality at the right place and time. A win-win for all courtesy food ERP.

In today’s dynamic business environment, change is the only constant. As human resource continues to be the most valuable resource in an organization, change management has become the need of the hour. With ERP selling like hot cakes, Cloud based TMS has announced itself as that change. Wherein, the best will adapt and have a bite of the cherry and the rest will stay reluctant, eventually perish and bite the dust.