The previous blog focused on some of the core freight management processes that are part of a company’s supply chain. For many years, prior to the age of computers and tablets, these processes were performed with manual procedures, calculators and spreadsheets. Some companies still use spreadsheets to manage a few or all of these processes. The good news is that there are some excellent technology-based tools that shippers can acquire or outsource to manage freight transportation. They include:
Transportation Management Systems (TMS)
A good TMS system can perform many of the activities outlined in the previous blog (http://www.dantranscon.com/index.php/blog?view=entry&id=202). These include shipment planning, shipment consolidations, mode and carrier selection, carrier performance management, exception reporting and a host of other functions. When linked with a strong Warehouse Management System (WMS), they provide a powerful integrated system to perform “end to end” supply chain management.
Shipment Loading
Shippers can now save time and money on freight transportation by utilizing a software tool to manage the process for them. After entering all of the pallet dimensions and weights in the computer, the software has the algorithms to plan the loading of a container or rail car better than any human.
Dock Appointment Scheduling
With capacity tight, truckers need to be able to go online and book their pick-up time and dock door allocation. This saves the carrier and shipper money by reducing waiting times and improving asset utilization.
Route Planning & Optimization
For companies operating private fleets, route planning and optimization allows them to plan the most cost effective itineraries. The software can reorganize the trucks, drivers and routes based on the firm’s ever-changing shipment activity.
These are just some of the benefits that technology can offer. Each type of technology-based service shaves percentage points off the shipper’s freight bill. For companies that are not comfortable purchasing or renting these services, high quality logistics service providers can now deliver this functionality, permitting the shipper to limit their capital outlays and staff levels.
Unfortunately, when it comes to technology, we have observed some distressing things in our work with shippers. We have seen companies purchase a TMS system but not put it into use. We have found companies that buy the software and start using it but, over time, stop using it and go back to manual systems. This reflects a lack of management oversight.
There is not much point in making the investment in these technologies if they are not put to productive use. Best in Class shippers select the technologies and/or 3PLs that are the best fit for their company and use them to gain competitive advantage.
To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (http://paper.li/DanGoodwill/1342211466).