Module 5 – Case

Transportation Excellence

Read the Required articles on transportation in the Background page.

Then in a 3-4 page paper answer the following:

1.    Why are organizations showing more interest in TMS (Transportation Management Systems) today compared to the past?

2.    Describe the major types of tasks a TMS can offer in helping to achieve transportation excellence.

3.    How does a modern TMS system enhance customer service while at the same time generate cost savings for transportation?

4.    Why have some critics (based on background materials) suggested that many organizations that have adopted TMS systems at this time have not fully utilized the full capabilities of these sophisticated systems? Explain!

Submit your assignment for grading by the end of this module. Use the same format as your module one paper.

Assignment Expectations

Expectations for the assignment are focused on the work demonstrating why there is increased interest in adopting Transportation Management System (TMS) technology. It is expected that the paper will display an understanding of the elements needed for achieving transportation excellence, synthesis skills in showing the relationship of TMS to other advanced technologies related to automation and process improvement initiatives, and critical thought in assessing the customer service, productivity, and profitability benefits of implementing an advanced TMS for optimizing management of the transportation component of the supply chain.

LOG 302 Module 5 – Background

The following information is intended to give you a good background on the importance of achieving excellence in transportation.

Use the following process to find and review the articles below in ProQuest:

Required Materials

McCrea, Bridget, (2010 Feb) TMS: Your key to the new economy, Logistics Management (2002) Highland Ranch, Vol. 49, Iss. 2 Pg. 38, 1pgs.

Abstract:

Research shows that shippers that have invested in TMS are seeing cost reductions, improved delivery reliability, and inventory reduction. This article discusses why TMS can no longer be ignored.

McCrea, Bridget (2009 Aug) Pitching TMS, Logistics Management (2002) Highland Ranch: Vol. 48, Iss. 8, pg 66.

Abstract:

For shippers, transportation comprises a significant portion of total logistics costs as a percentage of sales, and those fees aren’t getting any lower. To offset those costs, the Aberdeen Group reports that more companies are making resources available to find tools that bring better visibility and control to the transportation component. Nearly 70 percent of companies surveyed by Aberdeen for the firm’s second quarter 2009 AXIS report on TMS say that they currently have a mandate from management to make technology recommendations for transportation-related solutions. According to Aberdeen, 54 percent of respondents plan to adopt a related solution in the next 18 to 24 months. As the number of TMS-related success stories continues to grow, so too does shipper interest in using the technology to streamline the transportation component while saving both time and money. The process of selecting a new TMS to handle Saint-Gobain’s complex transportation system kicked off in late 2007.

Gonzales, Adrian (2007, Jan) Surveying the TMS Landscape, Supply Chain Management Review. New York Vol. 11, Iss. 1; pg. 36

Abstract:

In the late 1990s, the transportation management system (TMS) market was still in the “toddler” stage. What was a $487 million market in 1998 is now an almost $1 billion market, and it is projected to continue growing. The scope, functionality, and architecture of TMS applications have changed significantly over these years and so has the vendor landscape. TMS users are no longer just a handful of employees in the transportation department but hundreds or even thousands of people across the enterprise and value chain, executing a wide range of business processes. But despite all of these changes, the primary objective for implementing a TMS remains the same: to meet customer-service-level requirements at the lowest cost. Achieving this objective, however, is more challenging than ever. Transportation costs are increasing, driven in part by fuel surcharges; order-to-delivery cycle times are shrinking; order sizes are decreasing, leading to smaller and more frequent shipments; globalization is introducing new complexities and constraints; and exceptions, such as order changes and transit delays, are now the norm. The future looks bright for TMS.

Gilmore, D., (2002). Achieving transportation excellence. World Trade, Troy, Vol. 15, Iss. 11, p. 36, 3pgs.

Abstract:

Companies across every industry segment are striving to become supply chain management (SCM) leaders. SCM leaders achieve this status by reducing cycle times and operating costs, increasing supply chain velocity, and enhancing top line revenue growth through improved customer satisfaction. There is a growing recognition of the role that transportation and logistics excellence plays in achieving a world-class supply chain. Transportation costs represent a substantial component of overall supply chain and corporate spend for many companies. Transportation management solutions (TMS) can enable companies to take back control of their transportation processes and drive out transportation related costs. TMS can deliver these savings through: 1. process improvement, 2. shipment optimization, 3. continuous moves, and 4. carrier

Optional Readings

Moser,George, Peter Ward (2008, Apr) Which TMS is Right for You? Supply Chain Management Review. New York: Vol. 12, Iss. 4; pg. 50, 1 pgs

Abstract:

Simplifying transportation processes and making them cheaper is a must for any company looking to “go global.” Transportation Management Systems (TMS) can help. For those companies in the $500 million to $5 billion range that are increasingly “going global,” choosing and implementing a TMS prompts many questions: 1. perpetual software license or Software-as-a-Service (SaaS)? 2. in-house or hosted? 3. single business unit or enterprise-wide? Furthermore, TMS is not just a business decision; there often are significant IT strategy, deployment, and support issues, never mind corporate governance related to Sarbanes-Oxley compliance for publicly held companies. This article explores these issues and their economic, technological and organizational implications. It lays out a “Business Process Outsourcing” approach that can help companies accelerate the choosing and implementation of a TMS, and improve transportation performance. Finally, it explores in detail one particular TMS option, partial outsourcing with private software as a service.

Hoffman, William (2007, Nov. 5) Transport Up, Logistics Down, Traffic World, Newark: pg. 1

Abstract:

Rising transportation costs over the past year were more than offset by lower expenses in other areas, cutting total logistics costs 3.4% compared to the year before. According to the Establish annual survey presented to the Council of Supply Chain Management Professionals, the average company had logistics costs of 9.74% as a percentage of sales over the past year. This year’s edition found overall transportation costs edging up slightly, 1.3%, and making up 4.4% of the cost of sales, while areas such as warehousing, inventory carrying costs and other logistics functions saw declines. Rising costs of fuel, driver wages, insurance and equipment helped elevate transportation costs. Fuel accounted for 22% of transportation costs over the past year (Rising transportation costs over the past year were more than offset by lower expenses in other areas, cutting total logistics costs 3.4 percent compared to the year before, according to an annual survey of shippers.