With significant strides over the past several years, transportation management system (TMS) technology is rapidly evolving in response to increasing competition and expectations. The problem is legacy systems don’t really address today’s supply chain problems such as late deliveries. So, how do you choose the right solution for your business needs — and what could you stand to gain?
Modern versus legacy systems
While some savvy supply chain executives are recognizing the many potential benefits leveraging an effective modern TMS can offer, others might be wondering whether upgrading their TMS technology is worth the time and costs. To better understand the capabilities of a newer system, consider key differentiators between a legacy and modern TMS:
- Legacy — Five to 10 years ago, logistics leaders were investing in expensive off-the-shelf add-ons that came with their own sets of challenges, including coding requirements necessary to integrate them with existing systems. These pain points often resulted in budget overages, implementation shortcuts, and, ultimately, incomplete systems.
- Modern — With cloud-based solutions, opting for a next-generation TMS is a reality for those not only in big corporations but also supply chain professionals within small and medium-sized companies. In turn, a competitive TMS market is reducing software costs even further. With web services integration, a modern TMS can store important data from an affordable and easily accessible interface.
- Legacy — Legacy systems are highly transactional: They take orders, handle carrier assignments, and tender loads to carriers. According to NGL President and CEO Ari Smith, “They were very good at taking orders from ERP systems … maybe even manipulating some of that information to determine who the carrier should be, so carrier assignment and then tendering the load to the carrier. Some may have even supported [electronic data interchange] EDI — and that’s basically it.”
- Modern — Modern systems go beyond the transactional, offering actionable intelligence: determining the most desirable transportation modes, providing workflows for carrier selections, consolidating orders with other orders, automating freight rate shopping, and employing adaptive routing optimization. For example, interfaces now can warn logistics managers that the weather pattern on a trucking route may prevent an on-time delivery or that there’s been an accident and the freeway is closed. Sig alerts can even analyze what time of day a carrier can go through a certain area at 50 miles per hour or 20 miles per hour.
- Legacy — Yesteryear’s systems were essentially Microsoft Access or Excel on steroids with rows upon rows and columns upon columns of data requiring manual manipulation to obtain usable information.
- Modern — According to NGL Vice President of Business Development John Riske, “What you see in the new systems is business intelligence, [key performance indicators] KPIs, graphs, and pie chart displays of big data. Millions of data points go into making a single chart, and it’s all automated.”
“Things are happening a lot quicker and faster. The name of the game is being able to integrate with other partners, consume the information you get, and then convert it into actionable events. Legacy systems traditionally can’t do that,” Smith said.
Top three reasons you should update your TMS
What are the top reasons for making the switch and leveraging modern-day TMS tech? The ability to:
- Consume and analyze big data. We live in the age of big data. A lot of information is out there and, simply put, legacy systems are not structured to be able to consume and analyze big data to make recommendations. “You can’t forecast and manage the business without visibility of good data, and a modern TMS captures data,” Riske said.
- Leverage technology for speed and agility. The business differentiator in today’s tight competitive market is process optimization. By using a newer system, it’s more feasible for a shipper to get a delivery 97% on time, whereas using an older system would likely put the shipper closer to 85-90% on time because the system isn’t adaptive. “The reality is your competitors who have implemented a modern TMS are more agile and will beat you to the punch,” Smith said.
- Improve gross margins. According to Riske, “People want things done quicker, better, faster, and cheaper than they used to be.” A modern TMS can take a strategy and not only implement it but also report against it and manage it, providing business leaders with the real-time data key to making optimal decisions and gaining market advantage. And smarter business decisions often result in greater return on investment (ROI).
In a highly competitive landscape with increasing regulations, tighter deadlines, and more expectations from supply chain partners, many logistics industry insiders are looking for new ways to reduce costs and improve operations. Implementing new TMS software and learning to leverage actionable information can require a little legwork, but the results are often well worth the effort. Success goes not to the biggest but to the fastest.
Looking to leverage new technology for streamlining processes and increasing your ROI? Next Generation Logistics Inc. offers DynamicsTMS® 365 software solutions as well as other services to enhance your processes and your bottom line. To learn more, visit us online or give us a call at 847-963-0007.