Managing transportation in the Industrial Automation industry isn’t that straightforward. It’s characterized by an extensive transportation profile, ranging from parcel logistics for spare parts flows to project logistics for large turbochargers that need to be installed on site.
This diversity requires a flexible way of managing transportation. However, the degree of flexibility your people can operate in is often limited by the capabilities of underlying processes and systems. If you look at the established, traditional TMS vendors - they are all designed 10-20 years ago with the sole purpose of helping large organizations to save on freight spend. Back then, this gave companies who could afford it an advantage in the marketplace.
Fast forward to 2020, and many of the same companies are now adopting more flexible, cloud-based systems that include data analytics, transportation monitoring capabilities, and advanced collaboration capabilities (among other functionalities). Why?
Well, we’ve been talking to a lot of companies in the Industrial Automation industry; these are the five most common reasons why they’re abandoning their classic TMS in favor of a modern, cloud-based solution:
1/ traditional TMS isn’t capable of managing all your transportation variances
The companies we’ve spoken with often have a classic TMS in place. But when asking: “How do you manage your parcel flows? Or your ocean flows?” it suddenly becomes clear that the TMS is not covering all the different transportation flows, leading to a lack of transparency on operational and cost level.
Historically, classic TMSs have developed over the years, adding functionality on top. But their foundation hasn’t changed. They do a great job, as long as your operations match with the initial blueprint of their solution, designed decades ago.
It’s crucial for companies operating in the Industrial Automation space to unify the way they manage transportation. To move away from YOU adapting your operations to the limitations of your TMS.
Imagine that you have one unified TMS that offers the flexibility to manage all your transportation flows, from parcel to FTL/FCL and your project logistics. One centralized overview of global operations. You not only see your total freight spend, but can slice and dice the information in different ways, and drill down to the details to identify excessive spend.
2/ classic TMS is designed for data, not people
Supply Chains are run by people. Classic TMSs are designed for data.
This comment isn’t limited to just the Industrial Automation space, but is actually one of the the top frustrations we hear from operational teams using a classic TMS.
“I know the data is somewhere, but I just can’t find it.” - Employees are wasting nearly 20% of their workdays searching for information!
We’ve been participating in a TMS selection process recently, and one of the evaluation criteria was ‘user feedback’. The company understood that implementing a TMS isn’t just about selecting the right technology, but also getting the people on board. High user adoption is key in using the TMS to its full potential.
So after setting up a demo environment and inviting 50+ people users, they all could play around in the system. And guess what, they loved it.
Managing transportation is a game of exceptions. Your teams deserve the tools to effectively manage these incidents before they become serious events.
3/ Different Business lines, different requirements = new implementation of your classic TMS?
Industrial Automation is all about streamlining and automating production environments for different industries. Each industry and region has its own specificities, where the success of “the business” highly depends on the level of flexibility in your product and solutions.
When scaling the business to new regions or business lines, the last thing you want is having to launch a new IT CAPEX project for the implementation of your classic TMS in a different region.
A modern TMS is highly configurable, onboarding new regions or business lines in weeks, not months.
4/ Classic TMS goes dark once goods leave your warehouse
Classic TMSs are internally focussed, looking at internal processes and data. It’s only the last couple of years that execution monitoring and collaboration have been added to required TMS capabilities.
Visibility has become a trending topic in the industry. So a lot of companies are on a crossroad:
- do I invest in a visibility provider
and have it sit next to my classic TMS, adding just another silo
- Or do I look for a visibility enabled TMS
that adds monitoring and collaboration throughout the whole transportation process
Visibility as such, is just a bandaid if it’s not integrated.
5/ Good luck at managing inter-company shipments
Outbound from factory X, inbound to factory Y, should be simple
But the reality is: in a classic TMS, inbound and outbound flows are often entirely separated.
It’s not uncommon that one factory sends components to another, but the receiving factory has no clue when the goods will arrive. This is impacting not only the production process but possibly the customer delivery.
IF you’re able to successfully implement a classic, traditional TMS, eventually you’ll save on freight spend. But this investment will also maintain the status quo.
However, if you want to prepare for the future and transform your logistics into a competitive advantage, you need to redefine the way you manage transportation. Not just from a cost perspective, but through a human lens. Because in the end, supply chains are still run by people.