Transportation Management Practices Seen Changing Dramatically

Best-in-class companies take notably different actions, see costs drop while peers experience 10 percent budget increases, Aberdeen reports

Best-in-class companies take notably different actions, see costs drop while peers experience 10 percent budget increases, Aberdeen reports

Boston — October 17, 2006 — Transportation management is assuming a strategic role in driving supply chain excellence, and most companies are actively reevaluating their transportation processes and technology, according to the results of a new survey by technology consultancy Aberdeen Group.

More than three-quarters of the 173 manufacturing, distribution and retail organizations surveyed by Aberdeen have recommended transportation process improvements in just the past six months. Nearly two-thirds have recommended improving their transportation management technology.

"Traditional outbound domestic transportation no longer dominates the transportation agenda," says Beth Enslow, Aberdeen's senior vice president of enterprise research and author of the report on the survey. "Inbound freight management and online access to transportation costs and status are now a key focus, and technology providers are having to respond with new extensions to their transportation management software."

Best-in-class Cut Costs

Aberdeen's new "Transportation Management Benchmark Report" finds that best-in-class companies have been able to reduce their freight budgets while the average respondent saw costs rise by 10 percent. They also have better on-time delivery performance.

Other study findings:

  • Best-in-class take different actions. Best-in-class companies are more than twice as likely to do daily scorecarding and share tactical capacity forecasts with carriers; they also control a greater percentage of inbound freight and use more commercial transportation management system (TMS) technology.

  • Online information is essential. Fully 54 percent of respondents now provide other departments with online transportation cost and status information, up from 31 percent in Aberdeen's 2004 transportation benchmark.

  • Legacy technology won't cut it. Nine out of 10 companies are concerned that their current transportation technology will not meet their future needs. Four times more firms plan to adopt commercial transportation management applications versus building systems in-house.

  • International transportation gains new attention. Fully 39 percent of participants say they are going to seek to adopt a commercial international transportation management system versus just 12 percent in Aberdeen's 2004 benchmark.
The report was sponsored by solution providers that include LeanLogistics, JDA Software Group, Hitachi Consulting, Sterling Commerce, Agistix and Mercury Gate.

The report is available for download at (registration may be required).

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— Can ERP do everything that a best-of-breed solution can do? If you've already purchased a module as a part of an ERP bundle, what's the cost to implement an ERP collections solution? For information on these and other ERP-related questions, read "Revenue and Receivables Management: Myths and Truths about ERP," only on