The case for software-as-a-service is compelling, but for larger companies, it isn’t necessarily a slam dunk.
Transportation management software as a separate silo is a good place for most companies to start, but it won’t suffice for supply chain optimization, said Mike Mulqueen, senior director of product management for supply chain technology provider Manhattan Associates.
Without a holistic approach to TMS, companies may optimize transportation but suboptimize downstream processes. “TMS that is not integrated with functions like warehouse or yard management is a liability,” Mulqueen said.
Manhattan Associates offers TMS as a transportation lifecycle management suite of functionality.
Companies with relatively simple transportation networks can benefit greatly from the SaaS pay-as-you go model and low upfront costs. Companies with complex supply chains and global transportation networks often prefer installed TMS.
For one thing, SaaS users can’t control the timing of upgrades. For companies with $10 million to $15 million in transportation spending, that’s usually not a problem. SaaS platforms are run for multiple companies, and if your transportation processes are aligned with that model, it makes sense.
For large organizations such as retailers and consumer packaged goods companies, with so much riding on global supply chain connectivity, the need to control every aspect of TMS makes the extra costs of installed software worth it. Global organizations may not want upgrades or any software changes during peak season, given the risks of disruptions, for example. With the SaaS model, they don’t have a choice. “By not fitting like a glove, the loss of efficiencies are potentially too costly,” Mulqueen said.
Manhattan Associates supports a hosted, single-tenant hybrid approach that provides upgrades and modifications at customers’ discretion. The TMS is managed in a single-tenant environment, with Manhattan Associates running the IT component and the customer running the business component.
The next wave in TMS functionality is likely to be the processing of external data such as rates, traffic conditions, scheduling and fleet assets in smarter ways, and leveraging it for better decision-making. It’s a stochastic-versus-deterministic way of managing data, one that is more likely to account for random elements.
A lifecycle management approach to transportation, backed by powerful analytics, can optimally execute transportation strategies, flag inefficiencies and provide alternatives.
“Change through transportation modeling is one of the next big things in TMS,” Mulqueen said.
Contact David Biederman at email@example.com.