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A guide to selecting the right transportation management system

Joan Lim
Director, Product Marketing

Supply chains have experienced more disruption over the last year than any other line of business.  With evolving regulations on goods allowed in and out of different countries as well as the swift and dramatic shift to online purchasing, many companies realized glaring gaps in their ability to adapt to market changes.  Organizations lacked insight into deliveries of supplies and component parts coming into their manufacturing facilities, and at the same time, many companies did not have visibility into 3rd party shippers, freight forwarders, and delivery vendors transporting finished goods to customers.  This two-pronged situation is part of the challenge with logistics operations.

However, some companies were able to adapt to the massive disruption of 2020.  According to a Harvard Business Review article, “companies that invested in mapping their supply network before the pandemic emerged better prepared.  They have better visibility into the structure of their supply chains.  Instead of scrambling at the last minute, they have a lot of information at their fingertips within minutes of a potential disruption.  They know exactly which suppliers, sites, parts, and products are at risk, which allows them to put themselves first in line to secure constrained inventory and capacity at alternate sites.”

Unfortunately, we can’t turn back the clock to 2019 and put the pieces in place so your company is fully prepared to manage the upheaval.  However, you can use the experiences of 2020 as a lesson learned.  Once the world is “back to normal” so to speak, I can guarantee that at some point down the road, there will be more unexpected market turbulence.  There is no better time than now to prepare, and consider the transportation management technologies you need to manage through the next major disruption.

Follow Gartner’s roadmap to transportation management systems

Gartner “Key Considerations for Supply Chain Leaders Evaluating Transportation Management Systems” report provides an excellent roadmap to help you select the right transportation management solution. (See the Logistics Excellence with Oracle Fusion Cloud SCM Newsletter, featuring Gartner Research to read the full research.) This research points out that “transportation management solutions have become a key technology to manage the transportation function, especially in time of disruption.”  Gartner also mentions that “Supply chain and transportation are often among the first functions tasked with finding cost savings during a downturn.”

Since the scope of transportation management technologies has become much broader, Gartner outlines the different functions and can help you identify the areas on which your company needs to focus as you review the vendor landscape.

Figure 1: Transportation Technologies

Source: Gartner  (May 2020)

What are your pain points?

As you reflect back on the past year, figure out where you experienced the most pain and uncertainty.  Here are a few thoughts to consider as you conduct your review:

  • Were you dealing with cumbersome processes that automation could have streamlined?  
  • Did you require more visibility into the schedules and deliveries of goods and component parts coming into your facility?
  • If you have your own fleet of delivery drivers, did you need tools to optimize routes and schedules?
  • If you rely on 3rd party carriers, do you need visibility into availability and capacity?
  • Do you need more transparency into direct and indirect costs?

The answers to these questions will help you identify the gaps that you can address with transportation management technologies.  This information will be particularly helpful as you survey the vendor landscape to narrow down potential solution providers.

How complex are your transportation management needs?

Transportation operations run the gamut from regional and domestic sourcing and deliveries to multimodal international transportation with complicated customs clearances for imports and exports.  This image illustrates the breadth of transportation operations, and it can help you pinpoint how simplistic or complex your needs are.

Figure 2: Model for Holistic Multimodal TMS

Source: Gartner  (2020)

What’s your digital maturity?

Understanding your appetite for technology will play a major role in your solution and vendor selection.  According to Gartner research, “organizations lower on the maturity curve are much more conservative in their adoption of technologies.  However, as they mature and enhance their performance, they realize the advantage of these technologies can bring to their organization.”  Here, you need to consider the level of digital maturity across your entire organization and specifically with transportation operations.  For example, If your company uses enterprise solutions to manage your back-office operations, but you’re still managing deliveries with a spreadsheet, your transportation digital maturity is on the low end.  Therefore, you may want to select a comprehensive, but modular, transportation management solution, that will allow you to address your highest priority pain points now and add capabilities in steps as your organization evolves.

Consider a cloud-based TMS solution

As you survey the transportation management vendor landscape, you should select a modern cloud solution.  According to Gartner, “Companies who are looking to invest in technologies give preference to solutions that are cloud-based and can be implemented quickly. They should also allow the companies to achieve value in a short amount of time.”  Since cloud applications are becoming ubiquitous, I won’t dive too deeply into the benefits of software-as-a-service (SaaS) applications over on-premises options.  But at a high level, your company can save money with a predictable monthly fee instead of an expensive up-front cash outlay.  You can streamline your IT management efforts and always be on the latest update.  There are many other benefits and considerations when evaluating which technology path to follow, like whether to deploy a cloud-native solution or a hybrid model that’s integrated with an existing on-premises supply chain solution.  Your level of digital maturity will be a factor here as you evaluate the transportation management vendor landscape.

Drive resilient and growth with Oracle

As part of our supply chain and logistics cloud application suite, Oracle offers a complete transportation management solution to help you manage every facet of your operations on a single platform.  Built-in algorithms allow you streamline processes by identifying optimal routes to manage the flow of goods, intelligently award bids to carriers and logistics service providers, and configure loads for maximum capacity and efficient delivery.  You can also automate specific tasks, including booking and tendering processes with partner vendors.  Oracle Transportation Management (OTM) offers end-to-end visibility into both inbound orders and outbound shipments so your logistics team understands the status of goods in transit.  You can also easily integrate OTM with virtually any ERP system to ensure a rapid time to value.

To learn more, download a complimentary copy of the Logistics Excellence with Oracle Fusion Cloud SCM Newsletter, featuring Gartner Research which includes the article “Key Considerations for Supply Chain Leaders Evaluating Transportation Management Systems.”

Source: Gartner,“ Key Considerations for Supply Chain Leaders Evaluating Transportation Management Systems”, B Bart De Muynck, Published: 11 May 2020

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

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