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Transport Management Solutions – Shipping Without Slipping

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Y our business is growing, and the need for effective logistics and shipping

grows with it. Every day, more and more customers expect their goods to be delivered on time and at the right location. The need for transports is growing as new providers and new markets emerge, and the infrastructure

for transports is expanding, opening new competitive routes. But linking together the optimal shipping route from, perhaps, thousands of options may seem overwhelming. Pricing is only one of the considerations. In this white paper, we look into the potential and the challenges of a Transport Management Solution (TMS).

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The issue: Why transports are becoming more critical

Transports are becoming an

increasingly critical part of the

enterprise. It might be said that

transports have always been critical,

but the volume of transports are

increasing and the requirements

are becoming stricter. There are

several reasons for this:

¡ Sourcing

Raw materials, components and

complete products may now

be bought in many parts of the

world. Nations that belonged

to the Third World only a few

decades ago are now trusted

producers and developers of

hi-tech products. Industrialization

has reached Africa. The so-called

BRICS nations (Brazil, Russia,

India, China and South Africa)

are not only producers and

consumers; they are also building

a new infrastructure for trade in

the Eurasian continent.

¡ Markets

The ”new” nations that sell are also

nations that buy. New potential

customers are no longer found

in the USA or in the EU only. An

enterprise needs to be able to

deliver to the BRICS countries, to

Africa or Latin America.

¡ Internal transports

Company structures are

becoming more complex. Few

major enterprises are located in

one place only, or in one single

country. Goods need to be

moved between subsidiaries at an

increasing rate.

¡ Timeliness

Aspects of the Toyota Production

System, TPS, have been adopted in

many enterprises. It is often called

”just-in-time” and sometimes

understood as ”keeping your

inventory on wheels”. TPS does

not necessarily increase the

total volume of transports, but it

requires timeliness, since delays

could mean that production has to

be shut down.

And, of course, transport costs.

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Background: The evolution of transports

Official figures indicate that the

global volume of shipping is

increasing at a steady rate. This

should be obvious, considering

the growth of production, but

statistics show that the volume

of shipping is increasing faster

than production. The increase in

shipping volumes has a couple

of reasons: products, parts and

raw materials are, on average,

shipped for longer distances, and

modern production demands

higher volumes of transportation

to make the products. Both these

mechanisms are relevant.

Reducing the costs for transports

is, for many enterprises, a largely

overlooked concern. As they say:

”A buyer might spend weeks

looking all over the world for the

best deal on nuts and bolts, but

then he will overlook the cost of

having them delivered.” This is

probably an overstatement. But

a common case is that the buyer,

due to old habits, relies on the

transport options that he or she

is already familiar with and thus is

missing out on the opportunities

to lower transportation costs and

timeliness.

Dependability is not to be

underrated. Delays cannot always

be avoided, but many enterprises

are willing to pay a bonus to avoid

them. It has been estimated that

delays, on the average, add as

much as 25 per cent to the cost

of transports. Add to this the costs

caused by interruptions to the

production process.

However, the shipping landscape

is literally changing rapidly.

Additions and improvements to

both the Panama Canal and the

Suez Canal will make it possible

for larger ships to pass through

these canals instead of hauling

around South America or Africa.

These increases in canal route

capacity means faster delivery

and lower freight rates. Adding

to this, an even wider and deeper

canal between the Atlantic and

the Pacific is planned to be dug

though Nicaragua. New railroads

are being built on the inland of the

Eurasian continent, far from the

sea. And new business models are

emerging for road transports.

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The first challenge: The complexity of the transportation chain

So why do enterprises not consider

alternative transport options more

often? One reason may be that the

amount of possible combinations

is, in some cases, astounding.

¡ Mode of transport (road/train/

sea/air)

¡ Route of transport

¡ Detailed itinerary, based on

current timetables, including

reloading and dock scheduling

¡ Rates and other costs

¡ Time needed

¡ Border controls, tariffs

¡ Regulatory concerns

¡ Environmental concerns

¡ Existing contracts with service

providers

The number of possible

combinations may appear

staggering. It could make the

classical ”Traveling Salesman”

problem seem trivial. The

enterprise probably has all of

the information needed, or most

of it, in its databases. But are the

databases compatible, or does it

take manual dexterity – and time

– to put the puzzle together? And

are the databases kept current?

There are advantages for sticking

to the shipping service providers

you are familiar with and have

worked with for, perhaps, decades.

Even so, having found a more

inexpensive option could give

your enterprise leverage the next

time you’re negotiating the rates.

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The IT solution: Letting computers find the optimal choices

Transport Management Systems,

TMS, definitely do simplify things.

They are perhaps not an option

for small businesses, but when

an enterprise’s transport budget

reaches a certain size, perhaps

500,000 dollars per year, a TMS

solution should be given serious

consideration.

A fundamental functionality of

any serious TMS solution is to

pull and collect all the relevant

information together in what is

effectively, if not physically, one

big database, including such

information as timetables, rates,

tariffs and existing contracts and

many other types of data. The

simplest way this is achieved is

through open APIs provided by

various parties taking part in the

global shipping system; these

may include service providers,

custom authorities, regulatory

bodies and more. A TMS makes

it easy to evaluate different

shipping options and to find

the optimal one, whether the

primary concern is timeliness or

reduced cost. A TMS makes it

superfluous to copy necessary

data from a plethora of sources

into a spreadsheet and working

the options out from there.

In this sense, a TMS is a true

spreadsheet killer.

When considering a TMS solution,

it may also be worthwhile to

consider selecting a cloud-based

service. There are obviously

pros and cons, but an increasing

number of enterprises come to

the conclusion that cloud-based

services pay off, since they need

not have employees focusing on

servers, backups and updates.

Finding the optimal transport

solution is the goal. Cloud-

based TMS services, of course,

do impose certain constraints on

functionality (as does any cloud-

based Software-as-a-Service) since

much of the functionalities come

pre-configured, out of the box.

It is therefore critical to conduct

a thorough evaluation, before

choosing one.

A solid TMS system will do a lot

more than just finding the optimal

shipping route. A TMS makes

it easy to keep track of each

transport, each container or each

item on its way. Your company will

be able to evaluate and re-evaluate

transport options continuously.

Data can be transferred to and

from all involved parties in real

time: the driver, the customer,

the pick-up location. Sensors

in the packaging can provide

continuous information about the

state of the goods, for example

temperature or if the package has

been tampered with or damaged.

A cloud-based TMS solution will

enable these capabilities and,

once implemented, it will operate

more or less automatically.

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Your choice: Selecting the best TMS system for your enterprise

Gartner™, the well renowned

analysts company, has evaluated

TMS vendors for nine consecutive

years. In 2015, nine providers

were classified in Gartner’s

Magic Quadrant. The quadrant

rates companies along two axes,

defining four squares.

The two axes are Completeness of

vision and Ability to execute.

The resulting four classes are

Leaders, Challengers, Visionaries

and Niche Players. Most providers

are aiming for the class Leaders,

even if they are not there yet.

In 2015, Gartner rated Oracle, JDA

Software and SAP as “Leaders”.

Among them, Oracle with its OTM

product has the highest rating,

and has been in that position

for all of the nine years Gartner

has been conducting their TMS

market analysis.

¡ Among JDA Software’s

strengths, is that their system

is very comprehensive. Almost

all its customers are large

enterprises with a 100 million

dollar transportation budget,

or more. JDA Software will work

with customers to adapt their

system to the customers’ needs.

However, this also makes for

quite a complex system.

¡ Oracle’s OTM system is

described as the strongest,

broadest and most mature of

the TMS systems, with a history

of more than 20 years. It is

now offered as a cloud-based

service. It scales well and is

suited for relatively smaller

enterprises. Even so, Gartner

cautions, smaller customers may

desire even simpler installation

and configuration options.

It’s almost beyond saying that

Oracle OTM integrates well

with other Oracle products and

services, such as CRM and ERP.

¡ SAP’s Transportation

Management, TM, provides

deep integration with SAP’s ERP

system. It also benefits from SAP’s

global presence. For companies

that do not use SAP software, the

benefits are less obvious.

¡ Challengers are MercuryGate

International, C. H. Robinson

and Transplace. “Challengers”

means that they do a good

job, but in a limited field. The

only “Visionary” is Manhattan

Associates. A visionary has great

ideas, but has not (yet) managed

to implement them fully. Niche

Players are Lean Logistics and

INET. They will suit you if your

requirements fit their profile.

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The second challenge: Migrating your transportation data to a TMS

About Oracle OTM and the Wipro OTM-in-a-box solution

Unfortunately, choosing a TMS

doesn’t finish the job, much

remains to be done after your

company has signed a contract

with a cloud-based TMS vendor.

The main part of what needs

to be done is to migrate your

existing data into the shiny new

TMS. This is probably not an easy

task, although it may seem fairly

straightforward.

For a large enterprise, a 3–6-month

implementation phase is to be

expected. This figure applies to

Oracle’s OTM system, but there is

no reason to expect significantly

different estimates for other TMS

systems. The reason for the length

of the implementation phase is

that a TMS system does not work

with data alone, such as timetables

and rates. A TMS also needs charts

of business processes, workflows,

One such solution for migrating

legacy TMS business model and

data is OTM-in-a-Box from Wipro.

As the name indicates, Wipro’s

solution works with Oracle’s OTM

only. Wipro’s pre-configured

solution comes with a selection

of processes, workflows and

roles that will be suitable for most

organizations. It also includes

templates for migrating data

handling of payments and

invoices and other processes that

are specific to each enterprise. The

interdependencies of databases,

charts and tables need to be

specified. In some cases, the data

migration process will be a first

time operation: it may have been

only tacit knowledge until then.

Much of the data migration

process is mechanical and

repetitive, and it has been done

before at other companies.

Based on that experience, there is

software available cutting the time

needed for implementing a cloud-

based TMS system by a factor of

two or more. Some TMS providers,

such as SAP, offer applications for

synchronizing the TMS with their

general business applications. But

what is often needed is a solution

for migrating legacy data.

from the current databases TMS

for including them in the overall

scheme of planning, executing and

evaluating. These features help in

expediting PoC (Proof-of-Concept)

and CRP (Conference Room

Pilot) sessions. The end result is a

comprehensive system that saves

time and computing power, while

providing the optimal solution for

the enterprises’ transport needs.

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ConclusionAs transport-intensive businesses

grow, e.g. e-commerce, so

does their need for a Transport

Management Solution (TMS).

Sooner or later, the task of keeping

track of the businesses shipments

will be overwhelming and keeping

up to date with all the options and

regulations makes it even worse.

TMS makes life a lot easier for

transportation/logistics managers

and their businesses. TMS comes

in different shapes and sizes

and it’s critical to select the one

right for your businesses needs.

Gartner has ranked TMS for nine

consecutive years, and Oracle’s

cloud-based OTM product has

come out on top every year.

Wipro’s Pre-configured solution,

OTM-in-a-box comes with a

selection of processes, workflows

and roles that will be suitable for

most organizations.

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About WiproWipro Ltd. (NYSE:WIT) is a leading information technology, consulting

and business process services company that delivers solutions to enable

its clients do business better. Wipro delivers winning business outcomes

through its deep industry experience and a 360 degree view of “Business

through Technology.” By combining digital strategy, customer centric

design, advanced analytics and product engineering approach, Wipro

helps its clients create successful and adaptive businesses. A company

recognized globally for its comprehensive portfolio of services, strong

commitment to sustainability and good corporate citizenship, Wipro has

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write to us at info@wipro.com

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