Selecting a TMS
For those involved in managing freight movement, selecting the best transportation management system (TMS) is a crucial decision. Here’s how to evaluate a solution.
1. Form a diverse selection committee. Select young and old, men and women, team members. Include finance, operations, and safety in the decision-making, not only for buy-in, but to make sure your huge investment works for the entire organization.
2. Select a forward-thinking and connected TMS partner. EDI is essential, but that’s the past. APIs and blockchain are the future. Can your provider adapt quickly and embrace change? Your partner must connect with third-party providers and their critical tools. If your provider is slow or reluctant to integrate, you will lose ground to competitors as new technologies emerge.
3. Think about all your modes. Consider truckload, LTL, drayage, air, multinational, and intermodal. Many TMS solutions work well in some modes; few work well in all modes. Make sure that the system you choose meets your core competencies and does not hamper future expansion.
4. Invest liberally in your new system. In 2010, when it was a $7.5-million company, Atlantic Logistics invested $125,000 in a new TMS. It was a big investment, but it paid dividends as we came out of the Great Recession. Since then, Atlantic Logistics has scaled and grown. Its TMS is the lifeblood for productivity and essential for employee, customer, and carrier satisfaction.
5. Measure ROI on modules. Most systems offer a base package and a plethora of add-on modules. Start small then expand when you can fully utilize the extra power. Price the add-ons initially so you know what your future expenditures will be. Ask for discounts if you purchase multiple packages; prices are not set in stone.
6. Avoid modifying your system. Few systems do exactly what you want, but modifications are expensive and you typically must pay to port them to each new upgrade. Purchase a TMS that you can use as is or modify your process to work with the TMS.
7. Check SUPPLIER references. Suppliers provide favorable references but you will get deeper insights from users than from the salesperson. Ask about pain points, missing features, and bugs or quirks. Talk to a couple of different areas at the company, not just IT.
8. Don’t (necessarily) purchase the helpdesk. Consider purchasing the helpdesk for the first year, but it may be less expensive to pay hourly. Price it out. In your organization, have one or two super-users who can be the last line of defense before contacting your TMS provider and incurring billable hours.
9. Plan to upgrade and expand regularly. Invest in your TMS as you would an employee. Budget annual recurring costs for upgrades and new modules. If you don’t upgrade, you are falling behind your competition. Before you commit to a TMS provider, determine the typical upgrade and migration costs, and how long it takes to implement.
10. Invest in training FOR YOUR TEAM. You can have the best tool, but unless your team knows how to operate and utilize all the features, you are squandering your investment. Be curious, explore, and learn the system well.
SOURCE: Robert Hooper, CEO, Atlantic Logistics