Supply chain spend worldwide comes in at a staggering $18 trillion per year. Freight transportation expense is a no-less dizzying $11 trillion. While these two gigantic expenditures are necessary to keep the freight flowing worldwide, historically, the two have been treated as separate matters. For decades, there has been a defined way of using transportation management system applications to deal with and optimize transportation spend, siloed off from the larger world of transportation management. But there is a pressing need for technology that treats the two components as integral parts of one another.
In a conversation with Adrian Gonzalez of Talking Logistics, Blume Global CEO Pervinder Johar explained that his customers are looking beyond the standard transportation management system to something that unites transportation components to supply chain activities. The current version of a TMS can’t do this. A logistics operating platform is needed.
Johar explained that the definition of a transportation management system hasn’t changed. The scope of transportation management is just so much bigger in our current world. That expansive view necessitates moving from applications-based, TMS thinking to a supply chain platform that can connect multiple parties and multiple locations, providing true supply chain optimization, planning, and visibility – for starters.
“The TMS status quo is that no one cares about TMS,” he said, noting that when he looks at analyst reports or any new information about the TMS market, it’s always the same old, same old. “And what has happened is that so many other technologies have come up to make up for the deficiencies of a TMS because TMS hasn’t really changed.”
Move beyond the TMS status quo into a supply chain platform
Johar said TMS offerings are still sitting in the early 2000s as far as capabilities. That means that a TMS in this day and age is nice to have, but it won’t really make a significant impact. For that, users will likely turn to other supply chain technology, cobbling together visibility solutions and a solution for purchase order management and other tasks.
Here, he asked a simple question: “Why are we still living with old transportation management philosophies and systems?”
Maybe it’s not so simple. To find the solution to his rhetorical question, shippers and other supply chain technology users need to stop seeing TMS as a standalone application. Gonzalez concurred.
“Transportation management today involves a broader ecosystem of technologies than what we have historically thought about,” he said. It used to be, “all you need is a TMS and you’re good to go,” he added.
And that $11 trillion in transportation spend? That can be reduced by $1 trillion, said Johar, by focusing on optimization at the network level, something that necessitates pushing beyond the TMS status quo. But this level of savings can’t be accomplished one-to-one. This is where the power of the platform comes in.
“The siloed TMSes won’t get up that kind of optimization,” he said. “Transportation runs on the backs of millions of companies around the world that have 30 trucks or less. You’re not really going to get optimized unless we can tap into that capacity.” Here, the network evolves into a logistics ecosystem, with all parties, no matter how small, connected together in a truly optimized system.
“Twenty years from now, I don’t know if anyone will have their own TMS; it will just tap into a transportation platform,” he said. “Let’s make sure we get everyone to participate on a transportation digital platform journey, not just the big companies.”
Watch Johar’s appearance on Talking Logistics below. To learn how Blume’s platform can go beyond the standard TMS, contact Blume by tapping the button at the top of the screen.
Blume Global’s digital operating platform is a single interface, hiding the complexity of communicating with thousands of carriers, terminals, distribution centers, consolidation freight stations, IoT sensors, and many other systems while enabling planning, booking, execution, tracking shipments, and processing associated invoices.