Transforming Transportation Management

Optimise supply chain execution (SCE) by adopting a cloud-native transportation management system
Transportation operations in today’s world are getting highly complex. They tend to be spread across geographies, operate in multiple modes and have to cater to an ever-increasing supply chain complexity. Volatility in fuel prices and unpredictable capacity requirements, mixed with changing customer demands, puts transportation operations in the crosshairs of CxO from cost management and customer serviceability points of view. The increased focus on customer serviceability to be competitive in the market makes it imperative to think of innovative ways to manage transportation costs, while building all the flexibility in execution to differentiate customer experience.
This fast changing scenario requires transportation managers today to build capability that is agile, robust and adaptable to change. A transportation management system becomes an imperative for improving an organisation’s ability to manage costs and service performance. There is a dire need in the market for advanced transportation optimisation solutions that have the capability to devise the most optimal transportation regimen for an organisation through optimised decision support for cost, carrier, mode, schedule, asset and route. With effective order management, execution monitoring and financial settlement, such systems can enable better operational and financial control leading to more reliability and predictability in operations. Mobility solutions combined with GPS tracking can create a clear line of sight into operations and improve visibility for all stakeholders.
Though transportation management products with varying degrees of maturity and geographical presence have been around for some time now, customers have struggled with adoption, especially in developing markets. The current breed of global solutions assumes certain level of maturity and readiness in the ecosystem for it to deliver projected benefits; this often leads these solutions to not effectively address the nuances of a developing market scenario. Implementation of the available solutions also requires advanced skills that are not easy to acquire and retain. In addition, in both developed and developing markets, adoption of such systems in the mid-market still continues to lag, due to cost considerations. It also hasn’t helped that typical implementation cycles of transportation management systems have rivalled that of ERP implementations – running into months and even years! On the other hand some localised transportation management systems tended to provide quick deployment and low cost of ownership, but lacked in functionality that restricted the value that can be derived from such implementations.
The need of the hour is a Transportation Management System (TMS) that is functionally rich, flexible, can be deployed quickly and offers a demonstrated return on investment. The cloud provides a powerful mechanism of delivering such a system.
A cloud native TMS offers a viable option to the pain areas of the transportation management process. Cloud native refers to software that is architected from the ground-up to leverage the benefits of cloud and is not just hosted on cloud. A cloud native TMS can offer advanced optimisation capability that is real time and is scalable to fluctuating business needs – daily, weekly, seasonally or annually, all at an affordable cost. A cloud native TMS also enables businesses to connect to mobile devices more easily, leverage the cloud to integrate to all the third parties in the ecosystem like carriers, portals, liners etc. and more importantly connect to internet enabled devices like Vehicle Telemetry or Engine Control Units (ECU) of the transportation fleet. This provides capability to customers to significantly improve their cost and service performance. The ability to iterate faster allows for addressing the changing requirements and cloud makes transportation solutions more accessible to a wider set of users; which potentially can make a wider impact on operational efficiencies in the ecosystem.
Rather than have to invest in computing hardware for maximum load that occurs perhaps once a day or once a month, the cloud provides a way to affordably scale for short durations as business volumes fluctuate by using computing power only when necessary. The customer can set scalability rules which ensure they do not exceed budgeted spends while leveraging the ‘Pay As You Go’ model. Cloud native architecture also enables streaming optimisation, where high velocity, high volume business can run planning near-real-time to be extremely agile and responsive in fulfilling demand. Such solutions can also leverage the native integration service bus capability to not only integrate to on-premise applications like ERP but also connect easily to external parties like carriers, suppliers, customers and other providers.
In summary, adopting a cloud native TMS allows transportation executives to move to an “OpEx” model while avoiding vendor lock-in. Businesses can clearly understand their spend vs. value equation as compared to the conventional model where there is significant upfront capital investment with little visibility in returns for years till the system is fully operational and business processes have matured. They get significantly easier integration with their customers, partners and vendors while keeping implementation times aggressive. A cloud native TMS can deliver the holy grail of reduced cost of transportation operations and significantly improved customer service at an affordable cost.
AuthorNiranjan Umarane, Director – Product Management, Icertis

8