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The News:  An ARC Advisory Group analyst identifies 10 key trends in the Transportation Management System market

The Impact: With multiple pressures and opportunities seeming to increase shipper and 3PL interest in TMS solutions, keeping tabs of the latest trends makes sense.

The Story: ARC Advisory Group analyst Adrian Gonzalez, who focused on TMS and related logistics topics, recently identified 10 important trends in the Transportation Management Systems market.

Speaking at the Catalyst International user’s conference in Chicago last week, Gonzalez said that “many early adopters of TMS are starting to replace or upgrade these older systems.” He also said there is a growing interest from mid-sized companies, especially with the wide availability of hosted or “on-demand” TMS solutions.

His list of the top 10 TMS trends:

• Emergence of more real-time, “streaming” optimization: Growing shift to more dynamic optimization models to better respond to supply chain change than traditional batch optimizers can handle
• Increase Focus on Performance Management: Scorecarding and sophisticating reporting systems are an increasingly important element of TMS implementations to leverage the rich trove of transportation-related data.
• Enhanced Freight Payment Capabilities: This is a traditional functional area of TMS that many providers are starting to “beef up,” in part to become more carrier friendly in an era of tight capacity. More companies looking to move to “match and pay” processes for incoming freight bills.
• Linking Forecast Data into TMS: Companies can no longer treat transportation as an infinite resource; it must be treated as a constraint like manufacturing capacity. Leaders are linking demand forecast with transportation capacity plans.
• Integration of Fleet Management Capabilities: Some merging of previously distinct solutions – those focused on traditional private fleet management (dealing with maintenance and dispatching) and traditional common carrier management. Better decisions about when to use private fleet, and using technology to look for backhaul opportunities.
• Extending Visibility to the Yard and Mobile Assets: With equipment constraints and higher velocity supply chains, more companies are looking for real-time asset management, and better optimization of yard and dock operations. The latter capabilities are available from stand alone providers, WMS-based vendors, and TMS solutions.
• Addition of Multi-Mode Capabilities: With cost and capacity issues in trucking, and huge growth in offshoring, TMS solutions are starting to provide more robust support for rail and ocean shipping integrated with other modes, though there is still a way to go here.
• Increased Demand for Global Trade Capabilities: Offshoring also is driving interest in TMS more integrated with capabilities that ensure import compliance, calculated total landed cost, and handle import and export documentation.
• Move Towards Service Oriented Architecture: Support for SOA by TMS vendors will ease integration with ERP and other systems and enable more process-based approaches.
• On-Demand Gains Acceptance:  ARC research says 30% of TMS solutions today are on-demand, a percentage that it expects to continue to grow.

A key overall trend in both shippers and the technology is a stronger process orientation, Gonzalez concluded. “I am seeing a shift from the traditional “plan-execute” model to one that is more focused on process control,” he said.

What trends are you noticing in the TMS market? Are TMS vendors well-addressing user needs – or are there still important gaps? Let us know your thoughts.

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