The prospect of leveraging a transportation management system (TMS) to optimize and automate transportation activities is an exciting one. Few enterprise applications have the potential to deliver both an attractive ROI and significant operational improvements. With that said, significant TMS optimization and automation can be challenging. Purchase orders, sales orders and intra-network moves have nuances among them that make 100 percent optimization a lofty and sometimes unrealistic ambition. It’s then important to prevent perfection from being the enemy of improvement when it comes to TMS optimization and automation. Focus on what can be predictably optimized and automated rather than attempting to develop an infinitely complicated set of business rules to account for all wrinkles that could occur in the operation.
What Should a TMS Optimize and Automate?
A better first question might ask what the difference between optimization and automation is in this context. Opinions may differ, but optimization can be thought as the computations that drive a desired output. Cost, equipment capacity and transit time are common optimization goals of TMS. Automation is the set of criteria that drives the execution of a task repeatedly. A TMS optimizing without automating may solve a complex planning problem, but only do so once. The inverse situation, a TMS repeating and automating sub-optimal tasks, may provide the wrong results quickly. Both are needed to create value for a transportation organization.
The degree in which a TMS can optimize may differ by industry and certainly at the individual business level. Each organization is different, with different dynamics between suppliers, customers and other internal stakeholders. However, regardless of the organization, a TMS should “own” the transportation decisions. Commercially available software may have hundreds of attributes that drive planning decisions, but common ones are:
- Mode
- Service level
- Carrier
- Equipment
- Cost
- Pickup window
- Delivery window
The quality of the outputs that TMS can provide is only as useful as the input information. Actual and timely details from upstream systems such as ready dates, requested deliver dates, commodity details and packing weights/dimensions allow the optimization engine of TMS to provide an executable plan for the operation.
Many shippers and 3PLs are fortunate to have subject matter experts that could associate the order characteristics to a corresponding transportation requirement to optimize the shipment. Equally as likely is that process would take entirely too much time given the volume of transactions that need actioning. Enter automation.
The Key to Automation
The key to automation is to determine what should be automated. Each organization may automate based on different criteria if that criterion occurs repeatedly. Shippers and 3PLs should look at attributes such as business units, standing customer orders and high-volume commodities/items for automation. The effort of determining how transportation planning can be optimized and automated is just that: effort. But that effort provides an answer to the question, “Is our organization in a position to update or implement a TMS for shipment optimization and automation?” For many, the answer is yes.
enVista is well-experienced to help guide or directly execute the analysis on what to optimize and automate, and when. We have the analytical skills and the industry knowledge to identify which optimization opportunities are feasible in the real world. Let us help you find the right balance of optimization and automation. Let’s have a conversation.®
