Global Logistics and Supply Chain Strategies - October 2008 - (Page 40)

both the inbound shipment and the order waiting to be built, so it can be created as soon as the stock arrives.” Blended Solutions While LeanLogistics entered the managed services market as an expansion of its technology offering, some 3PLs that have always provided managed services have also made technology an important component of their offerings. For example, Transplace is a blend of technology and 3PL services. It fills an increasingly common void in the TMS marketplace, according to George A. Abernathy, executive vice president and chief operating officer for Transplace. “While most firms can fund a TMS investment, fewer firms have the ability to hire, train and retain the right talent to fully utilize and realize the potential value of the solution,” says Abernathy. Without the proper personnel to use the TMS, the promise of the functionality can fail to materialize. With a managed service like Transplace a shipper doesn’t merely acquire a TMS, but also receives the professional staffing to apply the technology already offers best-in-class technology to our large-scale customers, and now we’re going to make these products and services available to SMBs in a user-friendly way, tailored to meet their specific needs.” Complex Supply Chains For companies with more complex supply chains, multiple divisions and many locations, selecting the right TMS requires a great deal of advanced analysis of its information needs and processes. For example, a corporate staff may decide it wants to measure on-time delivery performance across the network, but what does that mean? The company might find out that some facilities want deliveries within one hour, plus or minus, of a set appointment while others consider loads on time as long as the freight shows up during the correct shift. Appointment-setting procedures are another area that notoriously vary from facility to facility, and certainly between business units. Complex transportation networks also get very unwieldy in the area of rate and accessorial charge management. For example, rate-per-mile reports can be skewed if to serve and supply chain trade-offs,” says Abernathy. “Transplace Consulting helps quantify our full suite of value opportunities for new and prospective customers. Our supply chain analysis ultimately leads to TMS configuration that drives daily value. Since we are a 3PL, service and cost-based auditing are a given in our business. Often, value comes simply from the process of working through a TMS implementation.” International TMS While adoption of TMS for domestic operations is low, adoption of transportation solutions for international operations lags even more. With international transportation costs often exceeding 10 percent of sales revenue as compared with two or three percent for domestic transportation, the need for better global transportation control should be a high priority. “There is a misconception in the marketplace that the functionality and flexibility is not there,” says Brad Wyland. He adds that there are many good international TMS systems, and many are also tied in with visibility, collaborative tools and regulatory compliance that is important for importing and exporting. According to Nathan Pieri, senior vice president of marketing and product management for Management Dynamics, companies have restructured their businesses to take advantage of low-cost manufacturing and supply around the world, but they have failed to pay enough attention to the logistics costs of these extended supply chains. “Companies have been caught off guard,” says Pieri. “Transportation has become a major cost area, and they do not have systems to manage it.” According to Pieri, many importers and exports have their ocean contracts in paper or spreadsheet form. They are almost always out of date, so the wrong rates are often applied. Since international moves can be complicated, many companies get lazy and tend to use the same provider over and over again, regardless of the possible alternatives. “These companies do not use the full range of options that they have, so they are unlikely to use the best combination of service, transit time and cost,” he says. The Management Dynamics Global Trade Management suite includes four modules: TMS, visibility, trade compliance and trade content. Companies may have a “Few firms can hire, train and retain the right talent to fully utilize and realize the potential value of the TMS solution.” — George Abernathy of Transplace to the business on a 24/7 basis.” According to Abernathy, Transplace’s customer base includes many large companies, but it also leverages its technology and resources for creating services and products that are available to small to medium-sized businesses. These SMBs gain the same transportation visibility, access to a vast network of carriers and lower costs that largescale businesses receive. Including the SMBs in the network is also a good longterm strategy for Transplace. “Transplace gains a special opportunity to cultivate long-term relationships with customers while assisting them as they evolve from SMBs and develop into larger businesses,” says Abernathy. “Transplace fuel surcharge programs are not standardized. Additionally, negotiations with transportation service providers are more effective when companies can go to market with a network-wide view of their transportation spend. Before a company facing such complex issues makes a commitment to any TMS solution, Abernathy suggests that it engage a consultant with the expertise to do a thorough analysis of its current model and future needs. Transplace recently added a consulting division to provide such services. “We provide insights on complex supply chains in an evolving environment that has reached a new tipping point in terms of cost 40 OCTOBER 2008

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Global Logistics and Supply Chain Strategies - October 2008

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