Centralizing your transportation management needs is one of the best ways to save valuable time and money on day-to-day business operations. We interviewed industry expert Stephen Bird to break down the most important aspects of centralizing operations and what to look for in a transportation management partner.
What Does it Mean to Centralize?
The main goal of centralizing is to streamline shipping and logistics operations, which allows you to decrease costs, minimize human error and boost efficiency. This is done by pushing all data, decision-making processes and operations to the same centralized location, such as one main department, transportation software platform and/or transportation management services company.
Why Centralize?
If you’re in the early stages of streamlining your transportation management (TM) processes, centralizing can provide the tools you need to grow your business.
Benefits of centralizing:
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Decrease time spent on emails, phone calls, correcting mistakes and more
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Automate reports and data management to save time and prevent human error
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Update and access load information and tracking quickly
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Complete more work with the same labor and staffing
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Make important changes faster and more easily
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Streamline communications between carriers, manufacturers, inbound/outbound vendors and more
In general, centralizing allows you to focus more on exception management (major issues or processes that may be causing problems) rather than all company operations.
Technology Partner vs. Service Partner
If you’re considering an industry partner to help you centralize, there are two main sectors of TM companies: technology and service. But what’s the difference?
Technology
Companies working in TM technology specialize in creating and maintaining services that can organize and automate processes like load booking and logistics, tracking, documentary collection and accounting. This technology is called a transportation management system or software (TMS). Most technology companies only provide help with the technology itself and the initial setup, but do not assist in the day-to-day operations, carrier management, procurement, reporting, claims, etc.
Questions to ask yourself about a potential technology partner:
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What tools are unique about this product?
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Do they provide the core functions you need to operate and streamline processes?
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Is the product user-friendly?
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Do they provide detailed and thorough training?
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Do they have formalized processes for implementation?
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Can they customize their product to fit your needs?
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What type of reporting functions do they have, and can they be automated?
Service
When you work with a service partner, you typically outsource some or all of your logistics operations to a third-party company with expertise in the industry. Depending on the company and your service agreement, they may manage only a few tasks, such as finding carriers or providing customer service, or they may provide full services for all logistics operations.
Questions to ask yourself about a potential service partner:
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Do they offer the scope of services you need?
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What sets them apart from the competition?
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What is their reputation in the marketplace?
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Are you looking for a more involved partner for a higher cost, or fewer services for a lower cost?
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Can they scale with you as your business grows, or will you eventually outgrow them?
According to Stephen Bird, "A technology or service partner needs to learn your business, your processes and your operations expectations to make sure the implementation is done the right way the first time. Any mistakes can have a negative impact on your business or the efficiency of your staff, so being thorough and diligent is key to a successful partnership."
There are some companies in the industry who provide both technology and service, such as Ryan Transportation. They're a third-party logistics company that’s been providing customized solutions for shippers for over 35 years.
A Competitive Advantage
The biggest takeaway for centralizing your TM needs is the marketplace leverage it creates for your business. Your company can use data and projections to become more accurate and make changes quickly to adjust pricing and analyze customer buying patterns, thus increasing your net profits.
By working with a service and/or technology partner, you can build relationships that will allow you to procure better transportation rates with higher quality carriers, avoid risk and identify a customer-level strategy that can be implemented efficiently. Finding a TM partner is a strategic decision, and this partnership can set your company up for success if done correctly.
Ryan Transportation is committed to providing our partners with first-class customer service and expertise in supply chain operations and TM centralization. We innovate and evolve to stay ahead of industry trends and continue providing the best solutions for customers of any size or need.