An article by similar name was published this week in Logistics Management magazine by the inimitable Bridget McCrea who is a leading voice in the media serving the logistics industry. We highly recommend you visit the article on the LM website, but for our busy readers, here’s a synopsis of the 8 reasons every retail shipper needs a TMS.
Proven Return on Investment – an argument we’ve been making for years. McCrea’s article cites ARC Consulting’s Chris Cunnane who recently performed a survey of TMS users revealing an average of 6% cost savings on freight costs alone among users of TMS software. Cunnane noted that nearly 60% of TMS users reported less than 25% of their net savings being absorbed by TMS costs. Using TMS for inbound logistics for retailers adds additional cost savings to the bottom line.
TMS Excels in Supporting Omni-Channel – Retailers using TMS solutions will happily confirm the benefits these solutions yield when it comes to executing omni-channel retail strategies marrying brick and mortar sales with e-commerce and so-called “click-and-mortar” sales. Cunnane again, “TMS reduces a number of the headaches of moving freight from origin to destination, by matching carriers and optimizing modes.”
Cloud Solutions for Lower Capital Investment – Cloud solutions require no costly hardware purchases. Subscription pricing and ongoing maintenance have lowered the barrier to entry for enterprise-grade supply chain software like TMS, leveling the playing field for shippers of all sizes.
TMS Helps Mitigate Driver Shortages – TMS systems deliver improved scheduling and planning to shippers helping maximize the efficiency of routes. More effective planning and scheduling makes for more efficient routes. This translates into happier drivers and lifts the profile of driving as a career option. Plus, the savings captured can be partially allocated to increased pay for drivers.
Because Data is the Lifeblood of Modern Business – McCrea notes that companies still reliant on Excel spreadsheets, paper faxes and phone are doing themselves a significant disservice in an age where analytics tools are so powerful. Analytics feed on data and the data capture and reporting features of a modern TMS provide all the data you need to effect better decision making.
TMS Helps Devise and Enforce Better Supply Chain Processes – McCrea nails it saying, “Companies that rely on a mix of spreadsheets and manual interactions with their suppliers are more likely to run “reactive” transportation departments.” Implementing TMS forces a company to examine and repair/replace less-than-optimal logistics processes. Once in place, TMS provides visibility essential to making course corrections over time and as the data directs. The upshot? Stronger supply chain management.
Customers Benefit Too – The control and visibility into shipment schedules, delivery times and other information enables a shipper to be more proactive and service oriented for their retail customers. Customer service always improves in the wake of TMS implementations.
Retail is Firmly in the Digital Era – More and more pieces of the modern business structure have gone (or are going) online. ERP systems, financial systems, sales/marketing systems. TMS is the digital mooring point for the transportation logistics portion of any operation. The sooner you tie this function into the rest of your digital business operations, the quicker you’ll benefit.
While TMS adoption remains less than 50% among those polled by Logistics Management, ARC’s Cunnane says his research confirms adoption rates will break that barrier soon with 39% of polled companies saying they intend to either purchase or upgrade TMS this year. Are you ready to take this important step on the roadway to success?