How to Choose the Right TMS Vendor

Due to globalization, corporations are spreading their business activities on global scale with sourcing and selling happening across the world. Also, their supply chains have become more complex. Naturally, they outsource their logistic needs to 3PL players have come a long way in their portfolio of service that they offer to their customers. Apart from the traditional services of freight forwarding and customs clearance, they also include import / export management, distribution, value added services, contract logistics and warehousing, reverse logistics and so on. Managing one or more of them efficiently to meet customer expectations from a performance perspective in one aspect of their business. Maintaining or controlling the cost element to operate profitably is the other aspect to succeed and have competitive edge in the business. Employing the right IT solution is the key here.

Shippers' demandsr
Shippers need goods to be picked up and delivered at the right time, right place and at least cost, every time. They want the shipments to be transported without damage, statutory requirements be met. The shipments and their customers on-line, with all types of reporting capabilities as might apply to shippers themselves across the various roles of their users, their customers, and partner / agents. In addition, there are other stakeholders like carriers, custom brokers and government authorities that need to be provided information in specific formats. The operational information over a period of time would help them to negotiate better contracts with their service providers and suppliers. To manage all this, an efficient transport management solution (TMS) is to be implemented which is scalable and technologically competent to handle the changing business requirements with least incremental cost.

TMS solution sourcing processr
The question that each 3PL provider goes through while deciding to go for a TMS solution is to make or buy. Outsourcing has always been the simple answer for this question in most of the cases as 3PLs themselves came in to prominence due to the same strategy adopted by their customers and shippers and so they clearly know the advantages when you source the application from experts. The next decision to arrive is to either buy it from a right COTS (commercial-off-the-shelf) vendors or to get it developed from an IT-services vendor suiting to his own specifications. While getting it developed as per the specific business process has its own advantages with respect to change management, from an overall TCO approach, LSPs have mostly decided to buy it from the right product vendor that has specialized in trosportation and logistic solutions. The reasons are many - TMS product vendors work with multiple and global clients and so one gets to use the product that has incorporated best business practices; adopting to changing business practices and technology is something that the TMS vendor could do at lesser cost; product vendor would have access to the business domain knowledge than a service vendor due to obvious reasons and so on.

Selection process of the best TMS product and vendorr
Once the TMS is decided to be bought from a product vendor, obviously the logistic service provider is confronted with the choice of the vendor - there are the conventional ERP giants that had typically focused on the manufacturing sector for decades and have entered and arena late; there are the regional players that provide the software that is specialized in the business practice that is followed within the region - but due to the smaller reach and so with constrained infrastructure the product would have restricted features from the perspective of global transactions; most of the times, these second class of vendors also adopt yester year's technology since the cost of shifting or migrating to new technology is not sustainable given their size of revenue and smaller number of customers they may have in region.