A recent study showed that 81% of shippers and logistics service providers viewed transportation management as a competitive advantage, with many of them planning to increase TMS spending. But what does that transportation advantage actually look like on the ground? In other words, how does smarter transportation play out across your actual logistics network, and how does that translate into a competitive advantage?
For some businesses, the answer can be a bit murky. A heavy-duty transportation management can be a huge help when it comes to comparing freight rates, selecting carriers, and gaining visibility into your transportation network—but what about when it comes time to actually execute?
The last mile of the supply chain, for instance, is notoriously the most expensive and complex segment, and it’s where many TMS platforms cut off. That means that there’s the potential for a gap in your processes where all the gains in efficiency you’ve gotten across your network are in danger of fizzling out on the last leg of the journey.
To really leverage transportation as a competitive advantage, delivery businesses need to find a way to optimize the final leg of the delivery journey within the context of your larger logistics network.
In this post, we’ll dive into whether you can make that happen with just a TMS.
The world of logistics software isn’t necessarily the most intuitive, so a quick dive into what we mean by TMS (and, subsequently, what we mean by delivery management software) seems warranted:
A TMS should give you a centralized platform from which to manage multi-modal transportation across your network. This means managing freight and rail carriers, comparing rates, and tracking the movement of goods throughout the supply chain.
The benefit of these solutions is typically that they give you visibility into an extremely complex, multi-faceted process. As such, they’re usually quite complicated themselves and can require in-depth connections and integrations with other logistics software systems.
Delivery management software, by contrast, specializes in the capabilities you need to specifically manage the last mile of the delivery process. This means getting orders from distribution centers into trucks and ultimately to their final destinations.
Like we mentioned, this is the most complex part of the process. When you start trying to get individual orders onto routes that meet your and your customers’ parameters, the complexity mounts exponentially. That’s why effective delivery management software solutions offer smart, scalable route optimization—in addition to other capabilities for customer experience management, driver management, delivery tracking, documentation, and more.
This is where the rubber meets the road for most logistics organizations. You’ve managed the supply chain effectively to the point where you can start to schedule deliveries directly to customers, and you need a way to get over the finish line.
Traditionally, these systems have been specialized but also necessarily limited. They weren’t able to provide visibility into the rest of the supply chain, and they didn’t empower users to ensure standardization and documentation across the entire logistics process.
As technology has improved and the delivery management market has evolved, however, that tide is beginning to turn.
If you have a TMS or are currently implementing, there’s huge potential value to adding a delivery management solution into your tech stack. By integrating closely with your TMS, a delivery management system can offer you the ability to break down functional silos and raise your last mile deliveries up to the level of optimization that your TMS provides for the rest of the transportation process.
In this way, the right delivery management system is the perfect complement to an effective TMS deployment. Once you’ve got a clear view of your entire logistics chain within your TMS solution, you can closely integrate a delivery management solution to take over the process once the first and middle miles of the process have been completed.
This enables you to see a handful of serious benefits:
All of this adds up to improved ROI for your overall technology spend, and a more effective TMS that yields results across your delivery and logistics workflow.
One of the things that we’ve taken for granted in this piece so far is that you’ll obviously be leveraging a TMS solution to gain an advantage in the transportation space. But does everyone who deals with logistics and transportation actually need a full-blown TMS?
For huge enterprises, the simple answer is often going to be “yes.” But as delivery management software gets more and more sophisticated, it’s getting easier for businesses to forego their TMS deployments entirely. SaaS software and smarter integration capabilities mean that even enterprise-sized businesses can gain logistics visibility across the board just by leveraging a highly-connected delivery management solution.
For businesses that need to manage carrier rates and bids, or need to deal with rail and air freight modalities, a TMS can add a lot of value. But if you’re just utilizing it to ensure visibility, tracking, and standardization across the board, even medium-sized enterprises can make that happen by implementing a delivery management solution that’s closely integrated with ERP, WMS, and other systems.
In this way, you can centralize your logistics visibility within the solution that deals with the most complex part of the process. From within the system that manages the last mile, you’re able to see first mile and middle mile transfers at a glance and optimize your deliveries accordingly. With everything integrated effectively, you put yourself in a position to gain
This means that when you invest in transportation as a competitive advantage, you’re focusing that investment on the area that’s most costly and complicated. By tackling the last mile of the supply chain head on, you’re putting yourself in a position to optimize costs significantly without losing out on visibility.
As a bonus, more of your technology investment will go towards improved customer experience (something that your average TMS doesn’t really help you with), meaning that you can boost CSAT scores and customer retention rates at the same time.
By all accounts, the TMS market is growing, and more and more logistics professionals see transportation as a key area to optimize. Any time businesses are putting real focus on logistics, that’s bound to be a good thing.
But even the most effective TMS deployments can be enhanced by integrating a dedicated delivery management solution into your technology stack. In this way, you make sure your technology investment is poised to pay off when you reach the most costly and expensive stage of the transportation process—otherwise, you risk losing all of the efficiency gains you achieved in the earlier stages.
Of course, this can come with thorny technological problems around integration and deployment. If you’re starting to think about what those might look like in practice, go ahead and drop us a line—our experts would love to walk you through it.