steps
to TMS
4
success
Installing a transportation management system can yield big savings
and boost your customer service—but you have to do it right.
In a recent posting in “Logistics Viewpoints,” an online newsletter published by ARC Advisory Group, analyst Steve Banker reflected on two companies that had
recently implemented transportation management systems
(TMS) with an eye to reducing costs and improving service.
In one case, the company achieved its goals, wrote Banker, a
member of ARC’s supply chain and logistics consulting team.
But in the second case, the firm had only limited success.
What made the difference, Banker concluded, was not
the software, but how the customer managed the implementation. The first company had strong executive support. The second had a sales team that ignored the TMS’s
forecasts for delivery times, promising faster service to win
business—a move that ultimately led to complaints about
“late” deliveries.
He wrote, “When I have talked to companies with failed
supply chain implementations, they typically do not blame
the software company. Rather, they admit that the fault was
their own, usually because they couldn’t change their inter-
nal culture, especially if a project requires the sales force to
change the way it wants to do business.”
In an interview with DC VELOCITY, Banker expanded on
that theme. “When I talk to end users who have had bad
implementations, they often say that while they would like
to blame the TMS vendor, they have to admit that they have
to take a lot of the blame,” he said. “They did not have
enough buy-in, they did not have enough training, they did
not have good project management skills.”
So how can companies avoid these pitfalls and ensure a suc-
cessful implementation? We asked several experts for their
advice. What follows are their four steps to TMS success:
1Build the case. “It starts with the business case,” Banker says. “You need to understand that clearly.” He explains
that the potential returns from a TMS implementation will
vary by the type of organization and that it’s important to
be realistic about what you can expect. “A TMS in some
industries is just going to have a higher ROI than in others,”
he says.
Banker cites the food and beverage and consumer packaged goods industries as two sectors where companies can
expect a big payback from a TMS—typically through consolidation and backhaul opportunities. “There are just a lot
more optimization opportunities in that sort of supply
chain than, say, a chemical company, where an order goes
out in a full truck that comes back empty. No one wants to
