With the emergence of e-commerce and globalized supply chains, competent Global Supply Chain (GSC) management is now crucial for multinational corporations seeking market dominance. Although there has been significant debate about how GSC management might help businesses create competitive advantages, the right distribution strategy has received less attention. Worldwide third-party logistics (3PL) has emerged as a viable option for meeting global distribution demands. Collaborative TMS is a new case of cooperation in GSC execution that can create partnerships, minimize delivery time and increase delivery dependability. Here, we describe how including a Collaborative TMS in your GSC and distribution strategy can help gain a competitive advantage for your business.
What is Collaborative TMS?
Voluntary Interindustry Commerce Standards Association (VICS) subcommittee launched the concept of Collaborative TMS (also called CTM). It is a new shipper-carrier collaboration approach to enhance supply chain visibility, reducing transit times, and inventory-carrying costs for retailers and suppliers while improving carrier asset utilization levels.
Because of widespread global supply chains and e-commerce’s need of moving goods across continents, there is constant pressure on merchants and manufacturers to compress planning cycles, reduce production lead times, and speed up deliveries. Transportation has become a critical aspect in the process, with shorter planning periods and the general goal of reducing pipeline inventory in the supply chain. But global logistics is still a reactive industry. To tackle shipment-level concerns, retailers, manufacturers, and carriers are continually at odds with one another. As a result, there is often excessive inventory and under-utilized carrier capacity. This is where Collaborative TMS can add considerable value. But first, let’s understand how it differs from a Standard TMS.
Difference between Standard TMS and Collaborative TMS
A Standard TMS is a transportation management system, software that aids in the planning and executing shipment movement with greater ease and a high degree of automation. It may be used by anyone in the supply chain, from manufacturer to distributors to third-party logistics providers (third-party logistics providers, or 3PLs) – basically, anyone who wants to coordinate shipments.
Compared to a Standard TMS, a Collaborative TMS (CTM) can be visualized as a collaborative approach built around the concept of a Standard TMS. Not only can it do all that a Standard TMS can, but it also optimizes the logistics based on the long-term planning, visibility, interactions, and collaboration between different supply chain trade nodes, partners, and carriers. Effective deployment of Collaborative TMS can achieve greater distribution flexibility and reduce supply chain management inefficiencies.
Benefits of Collaborative TMS
There are multiple benefits of using Collaborative TMS that allows all supply chain partners to gain from it.
- Helps in reducing delivery cycle times and provides higher visibility and more dependable transit times.
- Allows retailers cut total expenses while boosting service levels. It also substantially reduces the surprises in the supply chain since the long-term visibility is available to both the partners with Collaborative TMS.
- Lead time and cost variances can be reduced since Collaborative TMS efficiently consolidates volumes in a lane.
- Collaborative TMS can help the carrier be more flexible than a Standard TMS.
Impact opportunity on the bottom line
Because of rising global competition and shrinking profit margins, most multinational companies operate through a worldwide sourcing and a global supply chain (GSC) to maintain market share and increase profitability. Collaborative TMS provides an excellent ROI that can be realized quickly, positively impacting the bottom line. It assists businesses in navigating the complex world of carrier selection, rate bidding, route optimization, and other similar challenges. While Standard TMS has proved its worth by helping companies save millions of dollars and reduced lead times over many years, Collaborative TMS takes the partnerships and optimizations to the next level.
Here are three ways that Collaborative TMS can help save money for an organization and improve the bottom line:
- Making data-based decisions to save money upfront. Collaborative TMS ensures the highest carrier efficiencies and the lowest carrier cost, along with substantial lead-time improvements.
- It saves time and labor hours. It reduces the element of surprise across partners and provides a centralized platform for effective exception handling.
- Higher customer satisfaction leads to repeat purchases. A Collaborative TMS is a vital system to plan for the longer term and send a large volume of goods at nominal costs. The technology allows a companies’ Customer Service team to obtain important shipping information when working with its customers. This information gives them the power to make the best decision for both the consumer and the business.
If you are looking for great Collaborative TMS solutions, Turvo is the right partner. Turvo provides the world’s leading Collaborative TMS application designed for the supply chain. Turvo connects people and organizations, allowing shippers, logistics providers, and carriers to unite their supply chains, deliver outstanding customer experiences, collaborate in real-time, and accelerate growth. The technology unifies all systems, internal and external, providing one end-to-end solution to execute all operations and analytics while eliminating redundant manual tasks and automating business processes. Turvo’s customers include some of the world’s most considerable Fortune 500 logistics service providers, shippers, and freight brokers. Turvo is based in the San Francisco Bay Area with offices in Dallas, Texas, and Hyderabad, India.