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Paul Trudgian Ltd | Supply Chain & Logistics Consultancy No Comments

As you have no doubt noticed, the last decade or so has seen the world shrink dramatically, with technology and free societies breaking down the barriers of culture, time, and language to create a world economy that is truly globalised.

The ease with which email and smart phones have made it for companies in Boise and Beijing to do business with each other cannot be overstated, as those kinds of transactions are happening each and every day in cities all over the world. In addition, transportation infrastructure and equipment availability has improved just as dramatically, with super tankers from Asia able to go Port-to-Port from Mainland China to the U.S. West coast in under two weeks, creating a quick turn-around and limiting the amount of time businesses have their cash tied up on the water during transport.

These factors have made choosing a transportation management system a key factor to deciding your business’s success, as the supply chain may have tightened, but so has the competition, and the better managed your transportation and logistics infrastructure, the better able you are to compete. The simple fact of the matter is that in this Internet commerce-driven world we live in, price is king, and one of the best ways to drive down price is by choosing a transportation management system that allows you to squeeze every ounce of efficiency out of your supply and delivery chains.

However, it is important to realise that not all transportation management systems are created equal, and you must weigh the pros and cons of potential systems against the strengths and weaknesses of your organisation when making this decision. Factors such as the size of your organisation, the number of locations, the modes of transport, the kind of customers you have, and the type(s) of delivery systems you use are all very important factors to consider when choosing a transportation management system.

One of the key questions to answer is how complex are your supply and distribution chains, as this will dictate whether you need something as simple as an Excel spreadsheet or as intricate as a custom-built solution from a specialty software firm. For instance, if you are a sole proprietor bringing low volumes in from China that you sell to the same customers’ year after year, fulfilling orders via USPS, then a spreadsheet will likely suffice.

However, perhaps you are a fast-growing MLM that is having products manufactured in facilities all over Asia to fill multiple U.K warehouses and ultimately sending those goods to your customers using a mixture of LTL, small parcel, and expedited services—you clearly need to focus on choosing a transportation management system that can serve a wide variety of purposes and clients.

For those companies that need a robust solution, it is important to remember that you get what you pay for, and that you will likely pay more in cash flow, lost opportunity, and time fixing problems if you make a decision based on price rather than business needs. A company that can accurately forecast demand and shop their production needs to find the most cost-efficient provider(s), and use the time that affords them to choose the most economical modes of transport possible, will have a leg up on their less-organised and efficient competitors when it comes time to actually compete.

It is also important to consider all the users when choosing a transportation management system, as it will likely be utilised by buyers, traffic managers, salespeople, production employees, IT professionals, and executives. This is a rather diverse group of users, and they will likely have a widely varying level of technological literacy, meaning even the most powerful system that would be perfect if everybody was perfectly trained on it will be all for naught if one primary user group is simply unable to use the system as intended.

The final factor to consider in choosing a transportation management system is reporting capabilities, as the more complex a supply and distribution changes gets, the more hidden trends there are lurking in it. The right data reporting capabilities can help you and your company see patterns that you were heretofore unaware of, and either avoid the negative cycles or harness the possibilities that are revealed.

The bottom line is that your organisation can develop a product in Toledo, source a manufacturer in Tianjin, catch a boat out of Ningbo to store it in warehouse in Birmingham, and have a salesperson in London that sells it to a customer in Bozeman, but if you aren’t choosing the a transportation management system that helps you navigate all those individual pathways, then the next guy can and will and beat you in the marketplace.  Take some time in making this decision and make sure you take into account all of the things you need it to do, and don’t be afraid to spend as much as you have to in order to buy the right system for your company—it’s very future may depend on it.

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