To date, we’ve shared the perspectives of a transportation management executive (part 1) and a transportation/carrier relations manager (part 2) to the question: “What are the most important transportation management questions a TMS should be able to answer?”
This third installment delivers the answers provided by Mike Sadowski, the principal consultant at CamiApp, a firm that provides consulting on logistics and supply-chain IT issues to 3PLs, shippers, and software companies. Mike spent years as a CIO in the 3PL industry where he led the creation and implementation of several TMS and freight audit and payment systems. Installment 3 of 4: The Enterprise Software Consultant
1) What carriers drive shipper inefficiency, and why? For example, which carriers do not reply to tenders on a timely basis? Which ones have service failures, and what’s the root cause of these? When these things happen, they drive manual efforts on the part of shippers to resolve the situation. So if I know which carriers are driving manual efforts, I can work with the carrier to reduce those manual efforts, or give my loads to carriers that don’t increase my manual workload.
2) What customers are difficult to service, and why? How much more do they cost to service than average customers? We all know that some customers are more difficult than others. I remember one shipper who sold their products through a major US big box store. They found that individual stores required delivery appointments, which often resulted in trucks waiting around the stores for an empty loading dock. This, despite the fact that the corporate logistics team insisted that no stores should require appointments. Well, if the TMS can capture this information through status messages, and prove what’s going on with real data, then in this situation (or similar situations) you can go back to corporate logistics and explain why you’re going to need to increase your rates next year. You can prove to them that they are more difficult to service than they think.
3) Why did the TMS plan this load as it did? Modern TMS solutions have a lot of sophistication in the area of business rules. Shippers will (of course) have preferred carriers and this is loaded into the TMS as a set of business rules. But some of their customers may also have prohibited carriers resulting in additional business rules. And the shipper may be allocating shipments based on capacity constraints that the carriers have. If the shipper is using the TMS for optimizations, there are many business rules that get applied, such as how far out of route you might allow a truck to go, the maximum time you might make a driver wait to make a pick-up en-route, equipment requirements, etc. All of these business rules can make it difficult for transportation planners to understand why they’re getting the results they are seeing from the TMS. If a TMS can offer some insight into why it’s making the decisions it’s making, this provides comfort to the planners and transportation managers that the TMS is doing the right thing, and the planner should go with the plan provided by the TMS. Without this capability, I find that planners will often question why the TMS is making the decisions it’s making, and they begin to lose confidence in the system’s decision making, when in reality the TMS is making the correct decisions, or it would do so with some simple changes to the business rules.