Let’s embark on a whirlwind adventure to better understand the transportation challenges that major shippers face today. From erratic deployment schedules to fluctuating labor shortages, join us as we explore the complexities of today's transportation landscape and how automating specific processes can significantly impact downstream to a smooth-sailing experience for your distribution centers.
The Nuts and Bolts of Transportation
Before we dive into transportation management systems, let's discuss the role of planning systems inside a supply chain. These systems play a vital role in the supply chain by forecasting demand, determining inventory requirements and planning production schedules around the globe. Planning systems inside a network determine how much inventory needs to be moved to which locations to ensure that all demand is met. Once they've decided how inventory should be "deployed" across the network, they pass on that deployment plan to another technology known as a Transportation Management System (TMS), which acts as the execution arm to take these plans and make them a reality by booking the transport needed at the right time.
Imagine you're running a flourishing business and your planning system says that you must transport goods from point A to point B (a Lane) as efficiently as possible over the next week. Your TMS helps you manage transportation routes, carriers, costs and more to tender freight appropriately.
From finding the best carrier for your needs to determining the most efficient routes for your shipments, or consolidating shipments for optimal space usage, providing real-time shipment tracking and ensuring accurate invoicing and timely payments, a traditional TMS functions like a well-oiled machine to ensure that the plan can be executed as well as possible.
The Challenges in Traditional Transportation
One of the key challenges in a traditional transportation organization is the lack of convergence between planning systems, transportation execution and warehousing. Because all three are treated as separate software with unique objectives, they often don't account for the constraints that practically exist when pushing inventory through the supply chain. This disjointed approach can lead to inefficiencies and added costs. To provide a key example, planning systems often create deployment plans that don't account for the number of trucks that can be booked economically on a given lane. If the planning system thinks 20 trucks need to be shipped from Chicago to Seattle on Tuesday, it assumes that the TMS will auto-magically figure out how to make that happen. Unfortunately, that Lane only has two preferred carriers, which can support four loads per day, meaning the planning system expects the TMS to "auto-magic" 12 additional trucks at whatever cost and quality for Tuesday.
In reality, they go out to the open market and find carriers through new services. The cost is “market rate” –whatever that is that day, plus the quality is potentially an issue.
Another gap that exists is that the planning system often deploys in case or pallet quantities, whereas the TMS deals in fixed-size containers like 53' van trucks. Planning systems often generate demand that doesn't align with "truckload" quantities. The load builder, person or system must determine if the shipment can be filled or should be "killed."
In the other direction, most planning systems also struggle to understand shipping or delivery site capacities. Even when the transportation team can optimize the perfect number of trucks for a lane, the planning system hasn't coordinated across lanes serving that site. For example, five other sources might be shipping to that same destination on that day—all of which have significant requirements. This can lead to bottlenecks, delays and increased costs due to congestion or inadequate loading resources.
Optimizing Your TMS: Solutions to Fill the Gaps
By leveraging AI and optimization techniques, businesses can overcome the mis-convergence of systems and create a more streamlined supply chain. These advanced technologies enable a comprehensive analysis of various constraints and factors, such as carrier capabilities, shipping and delivery site capacities, and real-time demand fluctuations. As a result, near-real-time network optimization combined with AI-powered analytics can intelligently allocate resources based on priority and create optimized plans that balance cost to serve, load fill, facility throughput and carrier preferences.
In addition, AI and machine learning algorithms can continuously learn from new data and experiences, refining their strategies and adapting to changing market conditions. This adaptability ensures that you're planning and transportation management systems remain agile and responsive, further enhancing the efficiency of your supply chain operations. By integrating these cutting-edge technologies, businesses can unlock significant improvements in logistics performance and stay ahead of the competition.
Embracing the Future of Transportation
The world of logistics is continuously evolving, and staying ahead means being proactive in adopting new technologies and solutions. By integrating AI and machine learning into your Planning & Transportation systems, you're setting your business up for success in an ever-changing landscape.
AI-driven transportation can also contribute to your company's sustainability goals. Optimizing routes, reducing empty truck miles and minimizing fuel consumption can reduce your carbon footprint and contribute to a greener future. Moreover, the advanced analytics provided by AI-driven transportation allows for better visibility and control over your supply chain. This transparency enables you to make more informed decisions, improve customer service, and ensure you meet your client's expectations.
In summary, incorporating AI and machine learning into your planning and transportation strategies is not only a smart business decision but also an investment in your company's future. By staying ahead of the curve and embracing cutting-edge technologies, you can propel your logistics performance to new heights and ensure long-term success in an increasingly competitive market.