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International Transportation

International TMS - 7 Steps Getting to Great

The supply chain has become the lens through which leading organizations now view their world.

Ned Blinick

Chief Product Officer

The supply chain has become the lens through which leading organizations now view their world.  Within supply chain management, transportation management is a major driver for achieving bottom-line value and customer/consumer satisfaction and loyalty.  Companies like Toyota (automotive), Amazon (e-commerce), Walmart (retail), Apple (hi-tech) focus on and invest in both domestic (last mile) and international supply chain execution to drive customer/consumer loyalty and company performance.  These organizations and other best-in-class companies view the supply chain as an integrated whole.  They recognize that failure at any supply chain node or vector negatively impacts corporate performance.Success for any company that buys or sells globally, large or small, depends on how effectively it manages its international supply chain.  How well it does this is a determining factor in its overall competitiveness and its position against industry peers.  While there are many elements to managing supply chains, the role of transportation management is essential.  The effectiveness of international transportation management directly impacts the efficiency of product/SKU inventory and fulfillment management.

Technology - Transforming International Transportation Management

Transportation management is undergoing a major transformation driven by technology. International trade management systems focus on delivering shippers control of their international shipments through technology. There are many solutions for managing domestic transportation (FTL and LTL).  But, the area of international transportation is less well serviced.  International transportation is no less complex than its domestic counterpart, and in many instances, it is more complex.  Time, distance, regulatory compliance, language, currency, and surcharges all increase complexity.

TMS Functionality is Table Stakes

Nobody should invest in an international transportation system that does not have the required functionality.  This is simply table stakes.  Basic functional capability for international transportation service provider management must have:

  • Freight contract management - the infrastructure to capture and manage base rates, ancillary surcharges, and fees, demurrage and detention charges by route/port profiles.  International TMS must support automated freight invoice auditing.  It should enable the provisioning of total freight cost elements for landed cost management.  Finally, it should provide equipment commitment control by carrier/lane to ensure contract obligation fulfillment.
  • Shipment planning - support for shippers to optimize shipping unit loads by weight/volume visibility at the shipment planning stage.  Shipment consolidation building from suppliers or consolidators optimize increases global and regional inventory/demand balancing.  Shipment plans create the baseline against which actual service provider execution is measured and are critical for service provider management.
  • Freight booking - freight booking and booking confirmation management directly with carriers or 3PLs is foundational to shipment execution management.  Directly linking bookings to freight contracts for price, services, and commitment control eliminates the opportunity for invoice errors or misunderstandings.
  • Shipment tracking and alerting - foundational to international GTM is the direct links to carriers (Ocean, Air, Rail, Truck) for dynamic shipping unit milestone tracking and visibility.  Visually positioning of shipping units against shipment plan contextualizes the implications of shipping unit disruption to delivery fulfillment schedules.  It provides user direct https://www.viagrageneriquefr24.com/achat-viagra-officiel/ alerts through dashboards, messaging, emails, etc.
  • Pier visibility - identifying shipping units and shipment contents at the pier is crucial for eliminating costly demurrage charges.  For water-borne shipments, the inability to manage equipment at a pier can results in expensive demurrage and detention charges, and additional costs related to late delivery of urgently needed products. Pier visibility quickly identifies shipments based on business urgency and enables rapid response time and action.
  • Delivery execution - enables shippers to organize shipments from the port to final destination.  Delivery execution capability increases flexibility in organizing optimal delivery options resulting in greater fulfillment at a lower cost.
  • Freight invoice auditing - automated freight invoice auditing dramatically streamlines a tedious and labor intensive (or costly outsourced) process.  It ensures that 100% of invoices can be audited in a fraction of the time.  Freight invoice errors amount to greater than 1.5% of the invoice value - in the favor of the carrier/3PL.  Automated auditing reduces the error rate and enables cost recovery.
  • Query, reporting and analytics - access to information, as and when it is required, is vital to operational effectiveness and business planning.  Providing accurate information in formats that are meaningful for its intended audience is essential for optimized decision support and resolution management.

Usability is the Differentiator in Achieving Great International Transportation Management

If functionality is table stakes, great platform design and usability are defining features of superior international TMS solution.  Great platform design (or system design) enables the TMS to be easily configured to an organization's unique processes.  Great usability enables a company to take control over its international transportation functions with ease and little change management.  Because managing international shipments through the transportation lifecycle, with all associated financial and operational transaction details, is inherently complicated, the solution must be easy to use in order to be effective.  Solution usability is what makes a solution great.  Usability encompasses:

  • Contextualized information from all user perspectives: Controlling international transportation requires information to be centralized and aggregated.  It requires capturing information (in multiple formats) from across the global supply chain.  Control is dependent on information being translated from "raw" data into usable information from the users unique perspective.
  • Embedded workflow process support: A primary reason companies cannot take real control of the transportation process is the lack of integrated workflow support.  Too often work is disconnected because it is supported by spreadsheets requiring repetitive and manual effort.
  • Proactive planning and service provider execution monitoring: The ability to plan shipments and monitor supplier and service provider execution is important to optimize inventory across the supply chain.  Proactive planning supports optimal load management (maximum use of equipment, reduced transportation cost), inventory/demand balancing.
  • Transportation visibility and directed status alerting: Centralized visibility is essential to transportation management and control.  Alerting is critical for enabling quick detection of problems across the transportation network.  However, without the ability for the user to select the criteria and sensitivity for the alerts they want there is the potential for information overload and a deterioration in the value of alerts.
  • Targeted search capability for critical product/SKU shipment detail:  Product/SKU level access is a major blind spot for most TMS solution.  But visibility to product/SKU level detail is critically important for optimizing inventory and sales fulfillment while the product is in transit between shipment plans and receiving.
  • Automated freight invoice auditing against validated contracts or quotes:  Industry-wide errors in freight invoicing range anywhere from 1.5-5% of freight spend.  Manually auditing invoices costs between $3-$11 per invoice.  Automated invoice auditing eliminates manual or outsourced audit activity and the associated cost.
  • Support for communication and collaboration:  Accurate and timely communication is essential for timely shipment execution.  Communication is based on accurate, time-sensitive information.
  • Elegantly simple user experience:  The user interface allows the user easy, on-demand access to any required information, an intuitive work platform that minimizes manual activity, visualization tools supporting active transportation management, direct querying and reporting capability, interactive KPI and analytics dashboards.

7 Steps to Getting to Great

  1. A strong understanding and articulation of the broader benefits that an international transportation group achieves through automation. Getting to great international TMS is technically easy but operationally difficult because the broader value proposition that international TMS brings to the organization is not sufficiently understood or championed.
  2. A clear statement of current state processes and future state aspirations.  This is a difficult activity and can be achieved with internal resources, a consultant, or the chosen solution provider.  (If the solution provider is experienced in working with clients on process management and system configuration this can be a very practical option.) . It requires internal practitioners and managers who can work beyond functionality (table stakes) and express future processes.
  3. A managerial champion to forcefully present the value proposition to senior management.  The champion must be passionate about automation and its importance in achieving the value and benefits of exceptional international TMS.
  4. Organization commitment to fund and staff a project.
  5. Selection of international TMS solution provider.  This is the critical step of getting international transportation management to great.  It is at this point that the success of the solution will be ultimately determined.  If the solution provider is selling an "out of the box", one size fits all solution the project will ultimately be compromised and the results disappointing.  To get a great solution requires a collaborative effort between the organization and the solution provider.  The international TMS solution needs to be mapped as closely as possible to the stated future aspirational state.  Compromising the organizational process needs to the software devalues the delivered solution.  It is at this stage that the scope of the project is defined (and aligned with budget).  Selecting a solution is a long-term investment.  Therefore, selecting a solution provider with a history of long-term support is very important to the long-term success and being great. (see 7 below)
  6. Collaborative implementation.  An international TMS solution implementation is not a "do me".  Success requires the close working relationship between the organizational team and the solution provider.  It requires understanding from both sides and a willingness to configure and adjust the solution as issues are uncovered throughout the implementation.  Success depends on commitment, discipline, and fairness by all parties.
  7. Post-implementation support.  A major failing in systems occurs 2-3 years after the system has been implemented.  Too often the transportation requirements of the organization change but the solution does not adapt to the changes.  This leads to the misalignment of the solution to the processes and a degradation of the overall solution.  In order to avoid this, it is critical to work with the TMS solution provider to adjust/align the solution to the new requirements.  Failure to align the solution with processes reduces the effectiveness of the transportation group. To avoid misalignment depends on continued collaboration and support with the solution provider.

About 3rdwave:

3rdwave simplifies global trade through automation. 3rdwave is a GTM platform that delivers total global supply chain visibility, minimizes manual data entry, streamlines business process, and provides contextual information enabling its users to make informed decisions to reduce global supply chain risk. It's a cloud-based platform that requires minimal IT resources for quick implementation.  3rdwave ensures that companies meet the highest levels of international TMS execution and Trade Compliance conformance.

Ned Blinick is Chief Product Officer of 3rdwave.co.  He has been involved in global trade for too many decades.  Ned loves making the global supply chain simpler for everyone.  He can be reached at (416) 510 8800 ext 234 or at eblinick@3rdwave.co