Transportation management systems (TMS)

Solution Selector- Transportation
Management Systems (TMS)

Shippers often believe that big retailers control every facet of their supply chains, but that's more illusion than reality. For instance, Rite Aid Corp. (www.riteaid.com), a $16 billion drugstore chain with eight distribution centers and 3,400 stores, had a fundamental logistics problem — it had very little control of inbound freight.

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As a result, “It was very difficult for us to have visibility into that freight,” remembers Bill Hutchinson, Rite Aid's vice president of transportation, “and it was also difficult for other elements of our organization to get data on a shipment or a purchase order that was late.” Shipment status, he points out, was gathered reactively, often after a shipment was already late.

Freight was routed as requests for routing from vendors came in, and what little consolidation that was done was a manual process. “We had no system for a centralized view of our transportation orders in the system,” Hutchinson says. “It was something done by our analyst group on a case-by-case basis manually.”

As part of a supply chain reengineering process throughout Rite-Aid, the retailer determined it needed a technology solution that could provide better visibility into its inbound transportation. That solution was a transportation management system (TMS) from Manhattan Associates Inc.

A TMS is a software solution that automates the entire shipping process of a company, from carrier selection to routing and scheduling. According to Adrian Gonzalez, director of the Logistics Executive Council with analyst firm ARC Advisory Group (www.arcweb.com), TMS solutions facilitate:

  • procurement of transportation services;
  • short-term planning and optimization of transportation activities;
  • execution of transportation plans.

“Taking greater control of your inbound processes is the low-hanging fruit,” says Gonzalez, “especially for retailers that are trying to keep pace with Wal-Mart.”

The TMS strategy has certainly paid off for Rite Aid. Hutchinson points to improved inbound visibility, shipment consolidation (8% to 10% reduction in less-than-truckload spend), 5% increase in backhaul revenue, performance management (introduction of carrier scorecards) and workflow enhancements as the major benefits of Rite Aid's adoption of TMS technology.

So much for Rite Aid — how about your company? To help you sift through all the different vendors and the various nuances of their TMS solutions, we've developed the Solution Selector, — an online resource — that allows you to customize your searches by specific capabilities.

We've provided much of the information from the online matrix in the accompanying charts on these pages; please note that all the information was supplied by the vendors, and is updated throughout the year on the website. LT

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