A Transportation Management System implementation project involves a tremendous amount of work before the solution achieves the “steady state”. The selection process alone is a heavy lift. That’s why many are inclined to heave a sigh of relief and kick their feet up after the new transportation management software is selected, configured and implemented. But this is a mistake. A TMS solution is not like Ron Popeil’s famous home rotisserie. It is not a “set it and forget it” piece of machinery. To really capture the maximum value from transportation management software, users have to leverage the expanded visibility and control a transportation management system delivers to continuously improve transportation processes.
Here are 3 ways “best in class” TMS users strive for continuous improvement within their Transportation Management System.
- Routing Guide Analysis – Post-execution analysis of routing guides informs necessary adjustments ensuring primary carriers are taking the majority of the freight. This increases lead time to carriers by reducing the number of tender offers required to cover a shipment.
· Look to make adjustments in lanes where the primary carrier is not living up to their commitments.
· Get capacity commitments from carriers when they submit rates; and don’t hesitate to hold them to those commitments. Any lane that sees more than 20% of its volume moved by a secondary (or tertiary) carrier is a prime candidate for re-engineering.
- Eliminate Repetitive Spot Quote Lanes – Using spot quoting to get through month/quarter end or other seasonal capacity crunches is one thing. Sending the same lane to spot quote week after week is another; and something to be avoided at all costs. Shippers almost always pay a premium on the spot market. Analyze spot quote activity on a weekly basis to identify under-performing lanes and work to rectify them via changes to the Routing Guide. In a worst case scenario, look to convert the carriers taking freight on the spot market to committed lanes. You should still be able to save money based on the fact the carrier can count on getting those shipments on a repetitive basis.
- Recognize “Best Carriers”, Eliminate “Under-Performers” – Identify the best, and worst carriers and take appropriate actions. Reward top carriers with public recognition and more volume. Eliminate the worst offenders as they generally cause more headaches than they are worth. It also pays to remain open-minded when it comes to new carriers. Just because you are happy with your current carrier-base doesn’t mean that it can’t be improved. In the current transportation climate, any chance to save money without sacrificing service must be considered.
Follow these 3 simple guidelines to ensure your TMS solution stays on the road to continuous improvement, and the time and effort spent selecting and implementing won’t be wasted.