Open Road For On-Demand TMS

As companies search for solutions that increase efficiencies-in the face of higher operational issues-on-demand TMS is meeting great expectations.


Or, second, a company can activate what Johns refers to as "tribal knowledge" that is based on the transportation planner's intimate understanding of the unique preferences of a shipper's customer. "We can help a customer make those little corrections for their customer so they can release a plan that includes these preferences right into the warehouse," Johns says.

Third, the warehouse makes any necessary adjustments to the transportation plan prior to shipping. The original parameters used to design the system's algorithms help identify anomalies-whether the TMS plan or the planner's plan is put into action. For instance, if a carrier's charges are outside a certain percentage, the system will issue an alert.

"Lastly, our system can assess these plans to see how orders were shipped from the warehouse and how customers were billed by the carrier," explains Johns. "This gives companies a tremendous amount of data they can use for rating carriers and helping negotiate carrier contracts. It also gives you justifiable cost metrics throughout your organization."

Transplace: Establishing Operational Economies

Menner at Transplace talks about the "meat and potatoes" of on-demand TMS this way: "The primary value proposition for investing in one of these systems includes moding up and establishing the operational economies that the TMS will work from day in and day out."

The first step of moding up includes using the most cost-effective and service appropriate mode of transportation. The second step is to define expected demand for transportation service by mode on an annual basis. "We help companies define those requirements so they can secure rates and capacity commitments from the appropriate carriers," explains Menner. "Those rates then become the everyday operational economies upon which the TMS works."

The TMS acts as a control device that ensures companies are trending to realize these operational economies, continues Menner. "It's all about making sure you are using the right carrier on the right lane at the right frequency in order to achieve your expected savings target from this sourcing event."

The third benefit is a bit more challenging to define, admits Menner. "This is the journey we are all still on, which is a wired network providing visibility from end to end from the moment a supplier places a purchase order-whether one time or one that spans multiple periods-all the way through the time the product is delivered at the consignee's dock."

So network-wide visibility is the significant focus for the industry, as vendors aim to achieve seamless integration to increase the quality of the data transacted between supply chain parties, Menner says.

"We are all striving to provide the relevant information in order to manage our customers' expectations. For example, we help them to maintain control and do something like modify their production scheduling because the shipment of raw materials they need is delayed in transit from one of their suppliers."

Probably the greatest selling feature on-demand TMS can offer, says Menner, is the "viral or network aspect of these solutions, as opposed to traditional, behind-the-firewall executable code loaded on a server that operates within a company's intranet or Ethernet environment. The application is so pervasive because all anyone needs in an on-demand universe is a standard desktop Web-based browser and a connection to the Internet."

As for specific functional enhancements, Menner notes Transplace introduces new software on a regular monthly basis. "Because we are exclusively an on-demand solutions provider, it is a lifestyle for us. Some traditional software developers usually talk in terms of one or two releases of significance over the course of a year. We, like other on-demand providers, are exceptionally nimble to our customers' ever-changing requirements. We have the ability to model those requirements, prototype the code, reduce that to production code, fully test that code and then promote it to production within a very accelerated time frame."

Some of these relevant customer requirements could be as small as capturing additional data elements that would be displayed through a screen from the interface from an ERP system-such as a sub-purchase order number coming across in a new field.

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