From Implementation to Adoption: The Road to TMS Success
The benefits of a leading transportation management system (TMS) are well known for driving transformative business results and providing a competitive advantage. Transportation executives that have invested in a TMS gained increased visibility and better execution and event management across their network, leading to improved service levels. They also optimized their operations to drive efficiency to reach a targeted ROI. Despite a history of successful transformation, some executives are still skeptical about implementing a TMS, and some that have implemented a new system, experienced results below expectations. So, what are the obstacles to a successful TMS project and how can you overcome them? There are three main focus areas:
- Change management: Getting buy-in from across departments – including executives as well as end users – and then training the organization on how to best use the technology
- Project management: Setting realistic budgets, timelines and business outcomes
- Data management: Identifying what information is needed to achieve the business goals, collecting it and making it actionable
As with any new technology, implementation does not equal adoption. It’s possible that many users believe the status quo to be adequate. Without a clear explanation of why change is happening and what the benefits will be, team members may be resistant to learning a new system. Success depends on setting specific goals, communicating those goals, collecting actionable data, and then training people how to use the system to generate positive business outcomes. Results matter because they act as proof of concept for your people.
Case Study: National DCP
National DCP (NDCP) is the sourcing and distribution arm behind brands like Dunkin’ and Baskin-Robbins. With a transportation network that covers more than 28 million miles a year and more than 8,100 locations, the company was looking to integrate its TMS and WMS on a single platform so it could operate more efficiently while still hitting critical delivery windows.
In just 10 months, NDCP was able to unify its TMS and WMS systems and gain unprecedented visibility across the supply chain. Access to real-time information provided flexibility for dynamic transport routing. Transportation modeling allowed the company to explore multiple scenarios, run more efficiently and capitalize on backhaul opportunities. The new technology enabled new mobile applications in delivery operations. And the value of NDCP’s vast road infrastructure was unlocked. The ROI of the project was a three to seven percent decrease in transportation costs, a 10-20 percent improvement in backhaul and a 10-20 percent reduction in waste and spoilage.
The successful end results were products of a clear initial plan, cross-organizational preparation and the right TMS solution. “Our vendor delivered the right mix of technology, training and ease and speed of implementation, as well as the ability to scale IT cost effectively,” said NDCP’s Chris LaFaire, senior vice president of IT.
Finding the ROI in TMS
More than 20 years of research definitively shows that TMS technology delivers value and ROI. In fact, companies implementing a TMS average a transportation savings of about eight percent. However, each operation has its own characteristics, dynamics and challenges, which affect the speed and level of return. Factors include:
- the level of capabilities implemented
- how the TMS is deployed (inbound/import, outbound/export, supplier enablement, etc.)
- whether the TMS is deployed across a multimodal network (TL, LTL, fleet, IM, parcel, etc.) or a more simplistic logistics network
- the level of technology in place prior to the new TMS being implemented
Today’s leading TMS solutions – especially those delivered in the cloud – are more powerful, scalable and affordable than ever. Once implemented, there are five key areas that drive ROI: transportation modeling; procurement; planning and optimization; execution, visibility and event management; and settlement.
Regardless of how a TMS is ultimately used, all projects should start with developing a shared organizational vision. Key stakeholders and decision makers need to have alignment on corporate objectives and a plan for reaching them. End user training and adoption are also crucial to success and must be well planned and monitored. It’s not hyperbole to say that change management can make or break a TMS project.
Case Study: Giant Eagle
Giant Eagle is one of America’s largest grocery retailers and distributors, with approximately $8.9 billion in annual sales and more than 460 stores. Their main driver for a change of systems, was the fragmentation in transportation technologies – the three disconnected systems in use, led to disarray in its transportation strategy. Varying delivery times for stores resulted in decentralized routing, ongoing delivery pressures, inefficiency and wasted miles.
Giant Eagle consolidated its technology platforms to Manhattan’s TMS. Combined with changes in organizational structure and processes, the new technology enabled the company to focus on cube and routing, resulting in a reduction of overall miles driven. From an inbound perspective, connecting procurement with the TMS improved how carrier rates were evaluated and loaded into the system. Using the TMS optimization engine and labor management capabilities, Giant Eagle revamped routes to activate both daily and every-other-day deliveries, as well as align associates’ schedules with delivery windows. All told, the company was able to reduce empty miles by 8% and total miles by 7.7%, improve cube by 7% and fill available capacity with backhauls, which boosted load utilization and lowered inbound costs.
“The new TMS gave us the capability to move to a much more efficient, sustainable, holistic transportation model, which allowed us to gain greater efficiencies across our entire supply chain,” said Ann-Marie Daugherty, Giant Eagle’s vice president of logistics.
Chart Your Course to TMS
TMS represents an enormous opportunity to increase performance and cut costs across your supply chain. However, successfully implementing the technology requires collaboration, employee buy-in and continuous planning before, during and after the technology goes live. Manhattan Associates has the expertise to be your guide on a successful TMS journey. For in-depth information about the overall process, listen to our podcast Transportation Disruption.
To learn more about Manhattan TMS, visit manh.com/tms.