April 25, 2024 - 8 minutes read
The Data Chain: Linking TMS and Supply Chain Visibility
Global commerce is accelerating by the minute, and the ability to see through the complexity of the supply chain is becoming increasingly important. According to Tive’s “State of Visibility 2024” survey, 77% of supply chain decision-makers say real-time visibility is a must-have, yet a mere 24% report having the capabilities to achieve this critical level of insight. Even more concerning is that 45% of these professionals admit to having visibility into less than half of their total shipments, highlighting a significant gap between the need for comprehensive supply chain transparency and the current state of affairs. Bridging the gap between aspirations and reality in supply chain visibility is an urgent priority, yet many organizations still rely on existing legacy systems that provide only a fraction of the information they need.
Transportation Management Systems (TMS) are often lauded for their potential to enhance supply chain visibility, yet they generally only provide visibility into shipments booked within the TMS, thereby failing to provide end-to-end transparency for complex global supply chains. This blog will examine the functionalities of TMSs, what they can provide for supply chain visibility, and, just as importantly, what they cannot. We will also explore emerging platform-based visibility solutions designed to fill the voids left by legacy systems to create a comprehensive view of supply chain activities regardless of where or how they were booked.
What Does a TMS Do?
TMSs are at the core of modern logistics, designed to streamline the journey of goods from point A to point B. A TMS is a pivotal component of a broader supply chain management system, enabling businesses to ensure timely delivery, minimize costs, and improve overall efficiency. These systems assist in planning and executing transportation across geographic regions and transport modes and may also help to automate tasks like trade compliance documentation and freight billing. TMSs are built to manage transportation complexity, making logistics run more smoothly for businesses.
TMS functionalities vary based on the provider but may include some or all of the following:
- Route Optimization and Planning – Ensures efficient route planning by considering variables like distance, traffic conditions, and delivery windows.
- Carrier Management – Facilitates carrier selection based on factors like cost, service quality, and reliability.
- Load Optimization – Enables shipment consolidation to ensure trucks are filled to capacity, reducing the number of trips and consequently, the transportation cost.
- Tracking and Visibility – Offers real-time tracking of shipments that are booked within the system.
- Performance Analytics and Reporting – Provides insights into transportation operations through analytics and reporting, helping to identify trends, inefficiencies, and areas for improvement.
While TMSs are instrumental in enhancing transportation efficiency, they simply are not designed to offer the comprehensive supply chain visibility required in today’s intricate logistics environments. Although TMSs can provide valuable insights into the transportation aspect of the supply chain, they fall short of delivering an end-to-end view of supply chain management.
Can TMSs Provide Supply Chain Visibility?
Understanding a TMS’s capabilities requires distinguishing between transportation visibility and comprehensive supply chain visibility. TMSs are adept at organizing and overseeing transportation activities, making them essential for logistics operations. However, their design centers on transportation tasks, not the broader range of supply chain management processes. These limitations create significant visibility gaps, particularly in the following areas:
Inbound & Third-Party Visibility
TMSs primarily excel in managing outbound shipments but offer limited insight into inbound orders and third-party managed transactions. Since these systems are designed to work with data generated within, external data integration—from raw materials to supplies handled by outside parties—becomes cumbersome and complex. Achieving visibility in these areas often requires additional software modules, extensive IT integrations, or manual data entry, each demanding significant resources and investment.
The challenges of adoption and system architecture can further hinder visibility efforts. Convincing all supply chain partners to shift from established systems and use a single TMS for booking is practically unattainable and leaves persistent gaps in visibility. Additionally, TMSs are unable to generate shipments with partial data, as it disrupts the system’s referential integrity and creates a need for manual intervention to establish continuity. These limitations exacerbate the difficulties in integrating external supply chain data into TMS platforms.
Modes of Transportation
A significant challenge with many TMSs lies in their support for limited transportation modes. For example, a particular TMS may handle FTL and LTL shipments but lack rail, air, or ocean freight capabilities. This creates a problem for businesses with complex global supply chain management needs, as they may find themselves juggling multiple TMSs in an attempt to achieve full visibility. Unfortunately, this often requires additional custom coding and system configurations to integrate data sources, which demands considerable IT resources, investment, and ongoing maintenance. This inherent limitation further highlights the need for supply chain visibility software to support multimodal transportation.
International Shipments
Many TMSs do not offer high-level support for international shipments, particularly in managing denied party screenings and commodity codes. Denied party screenings are vital for ensuring transactions don’t violate export compliance by inadvertently dealing with sanctioned entities. Commodity codes are essential for categorizing goods in global trade, affecting customs duties and compliance. The lack of these functionalities in TMSs creates significant visibility gaps in end-to-end supply chain management, making it challenging to maintain a smooth flow of international goods while adhering to regulatory requirements.
Carrier Track and Trace
The ability of many TMSs to track carrier activities is limited, particularly for shipments not booked in the TMS. Tracking information for these external shipments often requires IT integrations or the adoption of carrier-specific APIs into the TMS, but these solutions are expensive and time-intensive to set up. Too often, shippers fall back to conventional communication methods for status updates with manual inputs into the TMS. These processes are inherently inefficient and increase the likelihood of errors, diminishing the potential for real-time visibility in the supply chain.
Multiple Locations and Divisions
Many TMSs, especially those not cloud-based, struggle to support enterprises with multiple locations or divisions, complicating visibility across extensive supply chain networks. This limitation increases with organizational complexity, where disconnected, siloed data sources already hinder visibility. The challenge intensifies with mergers and acquisitions, as integrating disparate systems to achieve a unified view of operations demands substantial effort and resources. Adaptable, cloud-based solutions that can quickly connect various business entities and locations are critical to gaining comprehensive supply chain visibility.
Bi-directional Integration Tiers
Many TMSs fall short in offering bi-directional integration capabilities, making seamless data transfer between systems challenging. This limitation means that while TMSs can gather data from integrated partners, they often cannot send information back to those origin systems for updates or further collaboration. In a complex supply chain with numerous stakeholders, the lack of reciprocal data flow limits the ability to maintain real-time accuracy and diminishes effective coordination among partners. Ensuring that TMSs can support fluid, two-way communication across systems enhances visibility and operational efficiency within intricate supply chain networks.
Stakeholder Access
The supply chain ecosystem involves many stakeholders, including suppliers, transportation providers, freight forwarders, customs agents, warehouse staff, internal employees, and end customers, each requiring specific slices of transactional data. TMSs often cannot adequately differentiate data sharing amongst stakeholders, requiring extensive IT programming to ensure each party has access to the data they need at any moment. This is further intensified when parties need to add, edit, or update data for a shipment, a functionality many TMSs lack. This inability to support data augmentation—either from third-party systems or direct inputs by partners—significantly limits modern supply chains’ collaborative and dynamic nature.
Agistix: Comprehensive Transportation & Supply Chain Management with End-to-End Visibility
As global commerce grows increasingly complex, the necessity for a solution that goes beyond mere visibility to include hands-on transportation management and execution is obvious. Agistix’s transformative supply chain visibility platform effectively merges advanced visibility with comprehensive transportation functionalities to address the intricacies of modern supply chain management. This cutting-edge solution gives businesses the insights they need to navigate logistical challenges and equips them with the tools to manage and optimize their supply chain operations.
Agistix transportation management and execution functionalities include:
- Rates and Bids – Streamlines the process of obtaining and comparing carrier rates, submitting bids, and autotendering to ensure cost-effective decisions.
- Routing Guides – Offers detailed guidelines for selecting the optimal transportation routes and modes, including auto-tendering, waterfall, and routing enforcement.
- Bookings – Facilitates easy and automated shipping booking with preferred carriers, simplifying logistics planning.
- Consolidation – Enables the combination of smaller shipments into a full load, optimizing space and reducing costs.
- Multi-leg & Mult-stop Shipments – Supports and simplifies complex shipment management, ensuring orders are routed to the right location at the right time.
- Document Automation & Standardization – Creates customized shipping documents for continuity and streamlined processing.
- Track & Trace – Provides real-time tracking regardless of carrier or mode, offering transparency from origin to destination.
- Order Management – Integrates order processing with transportation management for streamlined operations.
- Data Ownership – Maintains historical data for compliance and governance purposes, ensuring on-demand access to relevant information.
In today’s competitive market, leveraging a platform like Agistix that combines end-to-end visibility with direct transportation management and execution capabilities is a critical advantage. Agistix is not only designed to address today’s supply chain challenges, but to capture the growing amount of supply chain data from a growing number of sources to ensure you maintain visibility as technologies evolve. Discover the Agistix difference. Contact our specialists for a complimentary consultation and platform demonstration.
