In this three-part series, we will be taking a closer look at how companies should manage a freight shipping network that spans the globe and the issues that arise with that complicated transportation lifecycle, and most importantly, what steps companies can take to see success in global freight management. Click here for part 1.
What tools are needed to achieve global transportation visibility?
Tools are needed in each step of the transportation management life cycle to build a consistent database of internal systems to gather clean and accurate data across divisions and locales. In planning, we’re looking at optimization engines in order to pull in all of the data that is necessary to plan all shipments instead of each individual shipment at a time. Once you have your plan built then you can move into execution. Whether it is a current day shipment or a future day shipment, to make sure that each movement happens when it is needed, it must be monitored throughout transportation all the way to the destination. This allows you to have comprehensive visibility and accurate rating of each movement and to bring that data back into the ERP and management system. Typically, settlement is driven through a freight audit and payment engine. Sometimes this may happen through the TMS that is used in execution; often times it is outsourced to a third party provider. The ability to bring in and orchestrate individual tools, often times with vendors and carriers with different data reporting methods and formats and building up a trading partner management platform (TPM) is essential for your transportation management to be successful.
Essentially, businesses have two options to gain visibility across their global transportation network. A business can either (1) integrate all of the disparate systems used by the company and its vendors/partners, which usually comes along with a large price tag and a long timeline for completion or (2) invest in a solution that delivers widespread supply chain visibility, such as a trading partner management (TPM) platform.
Gain insight into strategic vs. tactical sourcing and how placing transportation procurement into these categories can reduce the complexity.
What are the steps to achieve global freight process management success?
Start by taking very close introspection of your company and your systems. Ask yourself some of these questions:
- How many different divisions/corporations are underneath your umbrella?
- Are all these companies working off a standard ERP platform? Or are there various ERP platforms that are in place based upon the acquisition and synchronization of the divisions?
- Are internal resources, IT/systems capabilities, in place?
- Are the resources there to collaborate a program internally with all the various external partners that are in place with the supply chain?
- What are the actual systems being used to monitor and execute transportation movements? Are you using a TMS or multiple TMS? Is it manual? Is it tied to the WMS?
- What type of systems are actually being used with regards to transportation and how well do they communicate back to the ERP?
- How are you paying the bill once it is tendered? Internally vs. outsourcing to an audit payment company? If internally, what type of freight payment software, systems and processes are in place to make sure that each bill is being properly paid at the right contract rate at the right time?
After you have asked these questions, some of the red flags start automatically coming up and you notice where your shortcomings lie, and you’re able to start making your priority list for what needs to be done.
Next week, in the final edition of this three-part series, we will further discuss what benefits your company can see from a global freight processing management system as well as three final keys to making that system work for you.