TRANSPORTATION MANAGEMENT
TM Business Intelligence &
Cross-Functional Integration
Shippers have made great
advances in transportation
management in the last
decade by centralizing procurement and transportation
planning organizations, as
well as investing in TMS. The
question now is: What’s the
next big thing? As the use of
supply chain technology and
information sharing grows,
there is an increase in the
meaningful use of information
and integrating transportation
with other functions. These
areas have already demonstrated significant benefits for
pioneering shippers and are
clearly breakthroughs in transportation management.
—Bill Loftis, principal, Tompkins
Associates
ransportation excellence has traditionally been limited due to lack of
visibility, both upstream (before planning) and downstream (after execution). Forward planning is characterized by traditional over-the-wall
silo processes and systems interfaces, in which requirements are not
visible until after orders are placed. The result is that transportation has an extremely limited planning horizon from which to optimize.
Post-execution visibility has also been limited, but this is not due to lack of information. TMS offers tremendous information detail; however, the transactional information
provided is so extremely large, it is nearly impossible to identify meaningful trends and
variances. To overcome these challenges, new solutions—integrated planning and
transportation business intelligence—are being utilized and adding tremendous value.
Integrated Planning breaks down the wall between replenishment buying and transportation. The solution looks at order patterns—either historical or project demand—at
a lane basis and determines the optimal transportation plan and the ordering pattern to
accomplish it. It reports on the inventory impact of this optimal plan. Case studies reveal
the typical benefit of an optimal plan is 7-percent improvement over a traditional robust
TMS solution. The challenge will be change management—the beneficiary is primarily
transportation, but the users are inventory managers.
Transportation Business Intelligence—BI software applications are becoming more
common across the corporation and have excellent utility for transportation users. They
are always hungry for information, but traditional metrics are aggregated in such a way
that the information cannot be executed. For example, a report might show that a facility’s cost per unit has increased, but at the aggregated level, a user cannot identify where
it occurred, so it lacks information on what to do about it.
Disaggregating to the lane or carrier level is possible—but not manageable—with
spreadsheet reporting. This is due to the vast number of lanes in the shippers’ networks.
BI applications reveal this information quickly and precisely, identifying issues that
need to be corrected. With the proper targets and variance reporting, transportation BI
can be created as an exception management process, in which a user, on a systematic
basis (preferably weekly), can be informed when lanes, carriers, facilities and so on do
not meet a target. Business changes that may have gone undiscovered for six months or
a year can now be found immediately.
T
The Outlook
Large shippers are beginning to implement these systems, and data service providers are
incorporating them in their service bundles. The biggest challenge is affordability. At the
same time, companies do not like to invest in measurements, and most packaged systems on the market are expensive. But this will be changing as custom-designed, affordable micro BI applications that fit the transportation budget hit the market.
