DC Velocity - March 2009

and other types of shipments.)

For the next eight years, the 3PL managed its client’s base of some 400 truckload carriers using its own TMS. During that period, it made significant progress toward CNH’s objectives. Among other accomplishments, it saw to it that plants

tendered shipments to the lowest-cost carrier, and it automated the freight tendering process by linking its own computer systems to CNH’s order management systems.

There was one downside, however. CNH found that having to go through a third party whenever it

needed rate quotes or cost data was something of a hassle. With the LTL shipments the company managed in house, getting a quote for moving a load from, say, Racine, Wis., to Tulsa, Okla., was a simple matter. But if CNH needed that same data for a truckload shipment, it was a much more involved process. “For some movements, you’d have the data available,” says Czerniejewski, “and for the other half, you would have to dig for it.”

The rental option

For a long time, CNH accepted that inconvenience as the trade-off for better cost management. But the emergence of transportation management systems offered on a “software as a service” or “on demand” basis changed the situation. Under this model, users essentially “rent” an application from the vendor, obtaining access via a standard Web browser. This option has several attractions for users. For one, it eliminates the need to install and maintain the software or to integrate it with other applications the company is using. For another, it lets users avoid the hefty upfront costs of buying a software license. Instead, they typically pay a relatively modest monthly fee.

The effect has been to make software that was once available only to big corporations accessible to their small and medium-sized counterparts. “When the Internet technology came along for an online TMS, this approach became affordable to a company the size of CNH,” says Czerniejewski. Not only was it affordable, but it would also give CNH the option of taking back control of its truckload shipments. And in the end, that’s exactly what the company decided to do.

After evaluating 42 software vendors, CNH chose a TMS from Oracle Corp. in February 2006. Given that the company was using an enterprise resource planning system from Oracle’s arch-rival, SAP, as its information technology backbone, that choice might seem somewhat surprising. But because software delivered via the Internet eliminates the need for integration, CNH was able to choose the package that best fit its needs without worries about compatibility.