e-connect Europe // December 3-4, 2019 Join Us
BLOG

8 Reasons Modern Manufacturing Companies Cannot do Without a TMS for Parcel

The current shift from operational efficiency to customer experience is changing the way manufacturers look at the IT-infrastructure of their supply chains. One of the applications spearheading these changes is a Transportation Management System (TMS) for Parcel. Discover the 8 reasons every modern manufacturers cannot do without such a multi-carrier shipping solution.

In our recent white paper, we cover the 7 logistics trends that will change the manufacturing industry in 2020. The common thread in these trends is the increased complexity and volatility of supply chains, caused by the consumerization of sales. Manufacturers open direct sales channels to end customers and the expectations of business buyers now mimic those of consumers.

More sales channels, more carriers

Powered by the consumerization of sales, the manufacturing industry is shipping out more parcels, via more logistics partners and more delivery services. Everything to ensure they meet the demands of modern business buyers.

“As to be expected given the growth of e-commerce, full-pallet only [shipping] profiles are rare. Considering that 40% of the respondents were manufacturers, [the] level of split-case shipping is significant.”

The 2018 Warehouse / Distribution Center Survey on the shift from full-pallet to split-case shipping

Managing carriers – the traditional way

The increase of carrier partners is at odds with traditional views on shipping. For several reasons manufacturers are used to working with one, or at most a select number of delivery partners.

First, bundling parcel volumes into a single carrier contract traditionally produced the lowest shipping costs. This paradigm has since shifted. Today, smart rate shopping with multiple carriers results in even lower shipping costs. Also, no single carrier can meet all modern customer demands. A second major reason manufacturers stuck to a single-carrier strategy is the time-consuming IT process of connecting EPR and WMS systems to the API interface of a carrier.

Those who do ship via multiple, custom integrated, carriers often run into challenges when trying to keep an overview. Pain points include logging into multiple systems to track shipments or needing to combine multiple data sets to generate the correct (financial) reports.

The future of shipping is a TMS for parcel

This contributed to the conception of Transportation Management Systems for Parcel. These systems, sometimes referred to as multi-carrier shipping software, take away the major challenges surrounding carrier management. By making shipping via multiple carriers more efficient and accessible, these systems are at the base of a future-proof supply chain. Discover the 8 reasons why modern manufacturing companies cannot do without a TMS for parcels:

1. Instant access to new carriers and delivery services

The first advantage of a multi-carrier shipping solution is instant access to a large library of carriers and associated delivery services. This translates into huge savings on IT. With these solutions API connections with individual carriers are a thing of the past, drastically shortening the time-to-market for new carriers.

2. Constant up-to-date carrier connections

Many companies also struggle to keep their existing carrier connections up-to-date. for example because delivery services or shipping label specifications change. With a TMS for Parcel solution, you ensure all carrier connections are always up-to-date, again saving valuable IT resources and time.

3. Better negotiation, lower shipping costs

A smart TMS for Parcel solution compares shipping costs between multiple providers. Based on the unique characteristics of shipments (destinations, formats, weights) and desired service levels (delivery speed, insurance) the system instantly selects the right mix of carriers. This is fundamental for better contract negotiations and direct savings on shipping costs.

4. Easily open new shipping locations

Because a TMS for Parcel solution is hosted in the cloud, opening up new shipping locations is simpler than ever. You no longer need on-premise installations or local updates allowing you to scale up (internationally) at an unprecedented speed.

“The Cloud just naturally lends itself toward TMS. After all, most TMS-related data is outside of the four walls of the company anyway, so why constrain your system to just being inside the four walls? ”

Amit Sethi, senior manager of logistics and supply chain at Capgemini

5. Increase in operational productivity

By standardizing and streamlining the shipping process through all carriers a TMS significantly increases operational productivity. The system slots right into existing operational workflows, allowing users to generate all shipping documentation with a single touch. From shipping labels to End of Day manifest and CMRs, regardless of the chosen carrier.

6. Increased transparency for all parties

Successful e-commerce organizations recognize that the customer experience does not stop after a click on the order button. Customers are treated to Track & Trace notifications via SMS or proactive updates in the event of a delay. With a TMS for Parcel solution you also can tap into this trend of maximum transparency. The system not only standardizes the Track & Trace communication across all carriers. It also recognizes when exceptions occur and immediately takes subsequent action.

“People are used to going over Amazon to track shipments, and that capability is now being carried over to B2B transactions.”

Bart de Muynck, research director Gartner

7. Central insight into the performance of carriers

Track & Trace information is not only helpful for the receiving party or a customer care team. The data also contains valuable information about the lead times of shipments. A TMS for Parcel solution uncovers this information via smart algorithms providing a unique insight into the performance of carriers (compared to SLA’s). Valuable information for every logistics manager.

8. Automated auditing of invoices

By comparing source data about shipments and insights from tracking data with carrier invoices, a TMS for Parcel system uncovers differences that translate into great cost-saving opportunities. Especially for high-volume senders who still perform limited or manual audits on invoices.

Conclusion

A TMS for Parcel is about flexibility. With instant access to multiple carriers users can respond to new developments much quicker. Examples include new customer segments or product lines requiring specific carrier services or competing carriers offering reduced shipping rates.

But a strong TMS for Parcel solution offers much more. By analyzing the enormous amount of logistics data, the system discovers unique cost-saving opportunities. Take the real-time selection of the most economical shipping option or the auditing of carrier invoices for example. This layer of data intelligence makes a TMS for Parcel more than just “a collection of carriers”. The system opens new avenues for cost-saving that remain closed if you opt for the traditional in-house integration of carriers.

Are you ready to discover more? Contact us for a free consultation. As a leading TMS for Parcel solution Logistyx Technologies helps enterprise shippers tackle their logistical challenges and discover opportunities to save costs and enhance customer service.

Ready to discover the logistics trends in manufacturing for 2020?

Download the white paper The 7 logistics trends that will radically change the manufacturing industry in 2020today. In this white paper, we cover the logistical trends that every manufacturer must acknowledge to remain competitive in today’s dynamic market.