Are Some TMS Solutions Too Difficult & Too Costly To Work With? - Some Final Thoughts From The 2014 Atlanta Supply Chain and Transportation Expo

While attending the Supply Chain and Transportation MODEX show in Atlanta, GA a week ago, we had several senior supply chain professionals come to our booth asking to view our transportation management software, FreightMaster TMS in action.

During our exchange, what we found curious, is that many of these folks already had sophisticated enterprise ERP software in place! So the natural question we asked was "Why Aren't You Using The TMS You Already Have and Paid For?"  (see recently published study on this issue)

They included statements such as:

1) Too difficult to understand, we don't have PhDs

2) IT department wanted it, but our users don't like it and just put up with it

3) Looks like Excel or Access on Steroids, all rows and columns

4) Too many "clicks" to book a load

5) Costs too much too keep updated

6) It doesn't do what we were told it would

7) We are disappointed in the results

8) A year later, little or no ROI

9) I can't get basic enhancements in time, I need them now

10) We don't want to wait for the next release to get basic functionality

Conclusion: 

Making complex transportation software user friendly is difficult not easy, it takes time, it takes domain knowledge and continues to be a primary issue for even large "Magic Quadrant" companies.

Most software developers do not have specific domain expertise in every single discipline and therefore, are not aware of best practices. Consequently, in transportation software, we have found that corporate and independent developers have taken a "Tell Me What You Want and I'll Program It For You But We Have To Develop It Quick and Easy For IT" approach. (see recently published on IT and supply chain misalignment) 

 

Unfortunately, this approach is shortsighted because it will likely ignore several aspects of transportation management requirements beyond the current company's sphere of knowledge, current industry best practices, local and global regulatory requirements to name a few.



The Complexity of the Supply Chain Process

66% of 2013 ERP Implementations Are Only Receiving 50% or Less Promised Benefits !

In a recent survey of ERP implementations conducted by the Panorama Consulting Group, it was discovered that over 66% of those ERP implementations say that they are receiving 50% or less of the promised benefits. Additionally, the study revealed that it did not matter who the ERP vendor was, Oracle, SAP or Microsoft Dynamics. This revelation should come of no surprise to seasoned ERP professionals.

Many times the companies hire as a "General Software Contractor" the very same value added reseller who marketed and sold them the ERP solution. As companies and users become more sophisticated in their requirements, it has become unreasonable, not to mention expensive, for any one single entity to successfully implement all the various modules that exist in advanced ERP software let alone begin "enhancements" into areas that they have no deep domain expertise in. As a result, you have over commitment, under performance and customer dissatisfaction.

To be certain, the customers themselves are to be held accountable for some of their own disappointment. All too often we have seen that new software implementations are used as a club to facilitate "process re-engineering" in companies without fully understanding the organizational impact. Furthermore, user departments and communities have become subservient to misguided IT policies direction at the expense of the organization.

As it becomes increasingly difficult and expensive to implement "enterprise" ERP software, companies need to focus on removing "silos" in their decision process and making Benefits Realization an essential part of the overall initial implementation process and not as an after thought to be completed in Phase 3 or 4 ....


The Complexity of Supply Chain Management

Inbound Freight Opportunities - Still There!

32 years after the enactment of the Motor Carrier Act of 1980, many organizations are still not taking advantage of the transportation savings and bottom line opportunities that can be theirs for the taking. There are many reasons for this phenomenon, but the prevailing one is that many companies still do not understand how to go about creating, executing and monitoring an inbound freight project. Here’s a quick primer I have found useful.

Create a project team. Call on the expertise of your procurement and logistics representatives, and draw on each department's need for specific cost information to better manage the process. An IT member or advisor may also be a valuable addition.

Define the project goals. Decide what you expect to accomplish when this project is completed. Is it to simply reduce costs, improve vendor relations, gain better inventory control, create vendor managed inventory, attain control over inbound orders, or better utilize a dedicated fleet?

Determine key performance indicators (KPI). Create a baseline or benchmark of current performance, and determine KPI, which might include supplier performance (order acknowledge, order fill rate, ship on time), carrier performance (accept shipment tender, on-time pick-up, on-time delivery), exception summary reporting, and customer and supplier satisfaction metrics.

Classify and quantify current inbound operations. Evaluate your current inbound shipments and classify by who controls the freight (prepaid or collect), where the freight costs lie, and whether the carrier is selected via a routing guide.

Consider investing in TMS technology. Transportation management solutions and business-to-business connectivity can provide both a systematic approach to your inbound processes and financial controls. http://www.FreightMasterTMS.com

Evaluate best landed cost by supplier. To calculate best landed cost, you must be able to allocate freight charges plus fuel surcharges plus assessorial fees to get the true picture of your costs. Select a software tool to help you rate and re-rate shipments based on all available scenarios. Ask these questions: Does your organization really want to take on the freight? If a supplier is larger than you, it may have better freight rates, but what is being invoiced in the cost of goods? This is where the visibility to freight costs segregated from the costs of goods gives an organization the opportunity to control expenses.

Survey supplier technology capabilities. Make sure they have EDI capabilities, and a supplier portal with a web form to provide "ready to ship" information. Don't underestimate the amount of work required to "cleanse" the data from suppliers.

Prioritize suppliers for quick results. In any project, delivering quick wins or payback should be a goal. Prioritize your suppliers by ease of implementation and largest payback. Typically these are non-compliant collect suppliers or new suppliers where you can influence the freight terms.

Execute. Communicate the plan in advance to all involved parties, both internally and externally, to get their buy-in to the process. Then implement the targeted changes.

Measure/monitor compliance and performance. Share with your suppliers how their performance will be measured. Establish routing compliance reviews with each supplier and ensure data is available for analysis by both parties at any time.

EPA's SmartWay Initative Should Be Supported

Finally, as a 3rd party managed transportation services provider, Next Generation Logistics has found a way to make a positive impact on the environment by joining EPA's SmartWay Program.

SmartWay Transport is an innovative collaboration between EPA and the freight sector designed to improve energy efficiency, reduce greenhouse gas and air pollutant emissions, and improve energy security.www.epa.gov/smartway

Since our company does not own or operate transportation vehicles, we were a little puzzled as to how to make a direct environmental contribution. The SmartWay Program identifies and scores carriers that are subscribers to SmartWay and provides that list to our people so that, all things being equal, we can select transportation providers who have joined this intiative.

NGL is committed to promoting the environment and supporting our customers and those within our industry who embrace similar green initiatives. As a supporter of this initiative, NGL has launched a new 4.7 release of its FreightMaster TMS® Suite transportation management system, a best of breed solution for all major ERP systems including Microsoft Dynamics™.

This enhancement will allow NGL managed services customers and FreightMaster TMS® Suite users to track and report SmartWaySM required metrics and measure their environmental performance for their transportation movements. The added features and tools within the FreightMaster TMS® Suite can improve operating efficiencies by properly scheduling pick ups and deliveries reducing idle time and improve truckload consolidations and planning, and therefore further reducing emissions.

I would like to hear from other interested parties as to their opinion on the SmartWay Program and other environmental initiatives that have succeded in the transportation industry.