TMS solutions arent living up to the hype

Nov. 29, 2005
Research analyst firm Analytiqa recently conducted a survey of over 100 supply chain and IT directors in leading companies across Eastern and Western

Research analyst firm Analytiqa recently conducted a survey of over 100 supply chain and IT directors in leading companies across Eastern and Western Europe.

While transport management systems (TMS) have historically been the least developed areas of the technological supply chain, technology providers and third-party logistics providers (3PLs) are readdressing the balance. The role that 3PLs are playing in this development is especially important as Analytiqa research found that where supply chain functions are outsourced, 49% of companies rely on a 3PL to provide their TMS, while only 21% of such companies entrust their warehouse management system (WMS) to a 3PL.

3PLs may choose to use a system supplied by a specialist technology provider or they may choose to provide an in-house solution. This demonstrates a key challenge facing the more traditional providers of TMS.

While they may be of the “best-in-class” variety, as process systems begin to encroach on their area of business, providers of these specialist TMS are being forced to be more innovative in order to justify their extra connectivity and visibility issues.

Customer experiences contrast sharply to the promotional campaigns of the leading technology systems providers. While technology systems are advertised as being robust, scaleable and cost effective, Analytiqa uncovered a degree of skepticism surrounding such claims. These are often interpreted by the customer as “the answer to underperforming, cutting edge technology is more cutting edge technology.”

The tension between enterprise resource planning (ERP) type systems and “best-in-class” systems is a common theme, particularly with WMS, as Analytiqa’s research highlighted a greater level of dissatisfaction with systems in Eastern Europe than in Western Europe.

An important factor affecting the success of a WMS implementation and subsequent satisfaction with the system is the degree of understanding which is brought to the planning process. This is reflected in the importance companies place in the experience of systems implementers, which cannot be underestimated. Part of the reason that systems are not used to their full potential is due to the complexity of the processes they are required to manage. This problem is most prominent in the case of ERP systems.

However, when it comes to employing a technology implementer, Analytiqa’s research highlights that the majority of providers leave customers highly satisfied with their services.

A major source of end-user dissatisfaction lies with in-house technology systems implementers who do not possess the necessary expertise they claim to have. A cause of many of the failed implementations is a desire to keep costs to a minimum, overlooking the use of more appropriate implementers.

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