by JP Wiggins

Industry Solutions, Transportation

SAP

Editor's Note: This Expert Insight column was originally published in the December Edition of the copy Supply Chain Digest Letter. It is being made available to all SCDigest readers.

In the 1980s our transportation management systems (TMS) were rudimentary with simple features mostly designed to help outbound domestic shippers choose mode and manage transportation orders. In the 1990s, we saw the evolution of tools designed to optimize shipments across the modes and help reduce transportation costs, with initial features for third-party logistics (3PL) and logistics service providers (LSP). By the early 2000s, the industry saw TMS better suited not only for global shippers but also for the 3PL/LSP market.

What we are starting to see is that just like before we are reaching the limits of the current generation of products. The reason is the same: industry is starting to ask the technology to do more than the current products can support.

In today’s world, software packages no longer fit into boxes for transportation management, customer relationship management, human resources, financials, and so on. The industry is starting to want solutions that go beyond these classic definitions.

The IT industry is responding to this demand by developing tools that are designed to not only solves TMS problems but business problems that clearly cross the classic product boundaries; for example, solving problems across multiple tiers and not just within the four walls of one company. Inter-enterprise optimization is one of the new challenges we are now starting to face.

To solve these advanced problems, your TMS must be one with your other systems and not an integrated point product. In fact, integration is now a limiting factor for TMS (and overall IT) growth.  Look at how much of your IT budget is spent on TMS integration and maintenance. Enterprise Application Integration (EIA) toolkits have helped the integration challenge but they are just a stopgap measure. A better way is emerging.

The next generation TMS is being built on the technologies of enterprise service-oriented architecture (enterprise SOA) on an open platform. When your business logic is built on the same platform, then the integration challenge is eliminated and all your software can share their unique functions without boundaries.

While it is not an exact analogy, I think of TMS like the spell checkers we used in the 1980s, which we would have to buy as an add-on tool. Today the functions of a spell checker are completely imbedded in our desktop applications. Our desktop shares critical functions across all desktop applications. On a much larger scale that’s how your TMS needs to be; it needs to share its business logic across all functions. This will stop us from wasting budget on integration and allow problem solving that crosses departments and enterprises.

About the author

JP Wiggins of SAP industry solutions group has many years experience developing and implementing transportation management solutions at several companies before joining SAP in 2006.