Factors to Consider for 3PLs Choosing a TMS System in the "New Normal"
The impact of the COVID-19 pandemic on the global supply chain is undeniable and will change how we all conduct our business for good. As a recent WSJ article noted, “Businesses reeling from the coronavirus pandemic must retool their supply chains, building in new backstops and inventory buffers in the face of global economic uncertainty.”¹
Transportation services providers are also facing the need to adapt. The fallout of this crisis has impacted all sides of a 3PL business.
Fulfillment trends are being disrupted in many industry sectors, making planning more difficult. For some products such as grocery foods, building supplies and household goods, e-commerce sales have spiked up so dramatically that many 3PLs are now managing peak season volumes in the off season.
“We are very thankful that we have your system with the amount of business we’re doing now. We would have not been able to accommodate the new volume while still managing it manually. It is scary to think where we would have been without it.” 3Gtms Customer, Leader in Store Brand Logistics and Distribution, Canada
Transportation planning is drastically different. Carriers simply are unable to forecast capacity, can’t leverage the predictability of contract rates, can’t easily find new capacity and are helpless against last-minute mode shift requests.
Shippers are facing delays in receiving goods from suppliers. Product stock-outs, product substitutions, ever-changing customer orders, re-drawn supply lines and route guides at a moment’s notice have resulted in massive volatility in shipment volumes while changing modes are the new normal.
Regulatory changes are adding extra complexity to hours of service, rest area availability, electronic product of delivery, staffing safety measures and more.
Facility shutdowns are a reality for most companies, making cloud-based technology a must for the large percentage of employees are now working from home or remotely.
For 3PLs facing this combination of disruptions, one aspect of doing business is more imperative than ever – the ability for any organization to stay flexible in the face of constantly changing conditions. A 3PL must be able to instantly respond to requests that may be drastically different for each customer. Each customer’s fulfillment service request is responding to their own unique situation and the 3PL must be to respond with cost-effective, timely services or risk losing the business.
So, what is needed to help 3PLs adapt?
Flexible, Configurable TMS Software
A 3PL’s transportation management system (TMS) is the nucleus of the organization and must be up for the challenge. It’s imperative the TMS software is flexible, dynamic, real-time responsive to customer changes − and can scale up to handle sudden spikes in volume. More importantly, the 3PL team itself must be able to configure these changes in their TMS system rather than having to wait for the software vendor to make the change. The time lag is far too long and costly to a 3PL.
When the Department of Transportation revised the hours of service rules for transport drivers, 3Gtms software users were able to simply and seamlessly make the rule changes themselves – and immediately build the new service hours into route plans. Is your TMS software up to the challenge?
In order to derive the greatest TMS benefits, being in the cloud matters. Cloud-first TMS platforms have outperformed their counterparts in the COVID-19 crisis. Companies using safe and secure remote access to true SaaS TMS software platforms such as 3Gtms have experienced no performance issues. Moreover, 3PLs using cloud-based TMS software have gained a powerful edge by being able to set up "work from anywhere" operations.
“Due to Covid-19 we had to move our entire shipping department remote and 3Gtms made it much easier to do so. In the middle of the crisis, we are even opening a new shipping office.” CIO, Top Tier 4PL, US
Multi-modal Planning and Execution on a Single Platform
High-performing TMS software must constantly ingest additional order and service changes right up to the point of shipping and search in real-time for the most cost-effective way to move customer goods. This reflects the dynamic nature of customer needs. Furthermore, it's critical that last-minute changes are managed within the same TMS platform to ensure that the optimized plan is built using real-world constraints and is immediately actionable.
Distribution Network Modeling
Companies are also re-evaluating their supplier networks and location of their warehouses and adding alternate, close-to-home suppliers, all of which may result in changes to their distribution networks. A 3PL can help in the decision process by applying its TMS platform's optimization tools for "what if" analysis and comparison of transportation costs as changes in location are considered.
We are seeing the most progressive 3PL companies thrive in this “new normal.” Not only are they figuring out how to cope with rapid, unplanned change, but they're also finding new ways to take on new business that others just can’t. Self-sufficient flexibility of your transportation software platform is the key to surviving and thriving in the post-pandemic world.
Contact us for a complimentary consultation today.
¹ Jennifer Smith, "Post-Pandemic Supply Chains Seek ‘Resilience," WSJ. June 23, 2020.