Unique Buying Reasons for implementing a TMS?
During my many interactions with companies that were either in the market for a TMS, or who were already working with us, I’ve heard numerous arguments of why they eventually decided to embrace the concept of having a TMS. In the context of sales and marketing, these arguments in favour of a buying decision, are referred to as ‘Unique Buying Reasons’. They are the specific factors or unique selling points that motivate a customer or organization to make a purchasing decision for a particular product or service.
In this article I will try to share the arguments I’ve heard the most, in an attempt to help you determine whether one (or some, or maybe even all) of the arguments might also apply to you.
Reduced Transport Spend
Managing transport rates manually is complex and above all: extremely time-consuming. This can easily take up to 10-15 minutes per shipment, if done correctly. Most of the times, the department in charge of carrier selection does not even bother checking the carrier tariff cards for each and every shipment. They feel comfortable with their educated guess based on experience, and save a lot of time due to that decision. The downside however is that the decision is made on the assumption that they are correct.
A TMS provides tools for comparing carrier rates, transit times, and service levels, enabling informed decision-making. By selecting the most appropriate carriers based on cost, service quality, and specific requirements, you can optimize your transportation operations and improve efficiency. This way the comparison is always done, without exception, structurally saving our customers up to 10% out-of-pocket on their transport spend as of the first year.
Cost Savings Due To Higher Efficiency
A TMS automates manual and repetitive tasks associated with transportation management, such as order entry, carrier selection, and documentation generation and can therefore streamline transportation processes. By reducing manual intervention, it saves time, minimizes errors and re-work, and increases operational efficiency. By embracing the benefits of a TMS, you can now grow your business without the necessity of hiring additional staff right away.
Another benefit here is that a good TMS can be used to apply all sorts of Business Rules to the shipment flow, creating something called Dynamic Routing. Dynamic Routing means that the ERP or WMS sends out a shipping request to the TMS without pre-defining the carrier in the initial request. The TMS will choose the carrier and service level based on pre-defined Business Rules.
Less Carrier Dependency
A TMS offers flexibility and scalability, allowing companies to adapt their transportation operations quickly when needed and accommodates changing business requirements. When a carrier is not performing well in a specific region, zone or country, you can easily set up Business Rules that exclude that carrier from the possible options when sending to that location. A similar situation can occur when, for example, a carrier temporarily has capacity issues or is dealing with a strike. By having the flexibility to work with a diverse set of carriers and scale operations as necessary in an agile way, companies can reduce reliance on any single carrier and maintain a resilient and adaptable transportation network.
In many occasions, the availability of resources in the IT department is a hot topic. Without a TMS, but with the wish to automate at least a part of the communication with the carriers, the IT department is needed to build and maintain carrier integrations. Integrating with carriers can be a complex and time-consuming task, especially when dealing with multiple carriers, each with their own systems and integration methods. If the integration requirements are relatively straightforward and involve only a few carriers, building custom integrations might be feasible. However, if the integration scope is broad, involving numerous carriers and complex data exchange requirements, a TMS with pre-built carrier integrations can save significant time and effort. Getting on the agenda of the IT department is always a difficult exercise.
A TMS provider already has all sorts of integrations in place, which they already use for other customers with similar business cases. Hopping on a moving train reduces the time to market drastically and removes the dependency on IT.
If you wish to apply Dynamic Routing in a proper way without a TMS, you usually need your IT department, or even the ERP/WMS partner to get involved. In a TMS, Business Rules can be easily applied by the Logistics team.
Single Source Of Truth For Your Shipment Data
During an interaction with a customer of us, I was told that once a month Management requested the shipping data from all (30!) shipping locations across Europe as all locations were acquired over the last 10 years and they were not (yet) on the same ERP and WMS. By the time the last location shared the requested information, the new month already ended and a fresh request was made. The overall overview was never complete, which leads to strategic decision making based on inaccurate and incomplete information. With a TMS, you can consolidate the information and data of all shipping locations. Accessing this combined data should be as easy as the click of a button, streamlining information retrieval and making it readily available for decision-making purposes.
Improving the Customer satisfaction and customer experience is an important argument as well. A TMS can play a significant role in enhancing customer satisfaction through various features and capabilities.
A TMS optimizes transportation operations, enabling companies to plan and execute shipments more efficiently. It helps determine the most efficient routes, consolidate loads, and select reliable carriers.
TMS platforms often offer shipment tracking features that provide real-time visibility into the status and location of shipments. Customers can access this information, enabling them to monitor their deliveries and have clear visibility into estimated delivery times. Real-time tracking reduces uncertainty, improves transparency, and enhances customer satisfaction.
A TMS can automatically generate alerts and notifications to customers in the event of shipment exceptions or delays. This proactive communication keeps customers informed about any issues that may impact their deliveries. By providing timely updates and managing exceptions efficiently, a TMS helps build trust and confidence with customers.