LSPs—Why You Should Integrate with a Supply Chain Management System

The Blume Global Team | November 04, 2019

A Logistics Service Provider (LSP) business like yours needs to squeeze every efficiency it can out of its processes and systems. Historically, that’s often meant building and tweaking your own home-grown, bespoke Transportation Management Systems (TMS) or supply chain management solutions.  

These types of in-house, large-scale technical projects can be time-consuming and expensive, but many LSPs have concerns about partnering with external supply chain technology vendors. For example: 

  • Risk-averse: Wanting to control the entire software and hardware platform from end to end. 
  • Security implementation: Keeping business, customer, logistics, and other data safe and secure. 
  • Price sensitivity: Not understanding the total cost of ownership for external logistics and supply chain solutions. 
  • Competitive advantage: Tailoring a home-grown platform to address needs that other LSPs don’t cover. 
  • Deep insight: Understanding their own business, systems, software and hardware. 
  • Integration: Relying on legacy systems that make it more difficult to adopt an external logistics solution. 

But the competitive landscape for LSPs is changing. Larger providers like UPS are investing in external platforms, and giants like Amazon leave little room to maneuver. It’s time to re-evaluate if a vendor’s supply chain management tools could be the solution you need. Progress in areas like integration, security, data management and centralization can provide you with a competitive advantage while keeping costs down. 

Make Transportation Management Software a Key Feature of the Overall Supply Chain 

Transportation management systems can’t just be an add-on to your other services—they need to be fully integrated into your overall supply chain management ecosystem. Using a TMS that’s already been built as part of a supply chain platform means it’s already designed to work perfectly across your software suite. Supply chain software vendors will often be able to customize exactly how your TMS module works, so you can adapt the tool to your internal and external workflows and processes. 

As Logistics Management says, “As the true workhorses of the supply chain management software cluster, transportation management systems (TMS) have become the “must have” for companies that—working under the pressures of e-commerce and omni-channel—need to move beyond clipboards, spreadsheets, and phone calls to manage their increasingly sophisticated transportation networks.” 

Get Insight into Exactly What a Third-Party TMS Can Do 

It’s important to understand exactly what features and functionality you’ll be getting when you buy a supply chain vendor’s software—otherwise, as Freight Waves points out, “Many shippers, for example, end up disappointed because their fancy new TMS doesn’t provide the visibility into their shipments that they expected. The reason likely has less to do with the solution and more to do with the process used to acquire the TMS. Not all TMS can easily interface with a carrier’s system, for example, and without that integration, visibility is going to be lacking.”  

When you decide on a TMS or supply chain platform, the vendor should be able to provide complete information on everything the software can do, including integrations with other systems.  

Optimize Transportation Management with AI and Machine Learning 

LSPs need to streamline their transportation options to maximize profit margins, keep costs down and maintain a competitive advantage. A modern supply chain / TMS platform uses tools like AI and machine learning for: 

  • Shipping and route optimization 
  • Scheduling drivers and vehicles at the right time  
  • Modeling and forecasting likely scenarios in the supply chain 

These AI services can be combined with IoT device tracking on your vehicles and shipments, so you can readjust as circumstances and locations change.  

Use Supply Chain Management Platforms to Give “One View of the Truth” 

One of the main advantages of a good supply chain software solution is the ability to centralize and report on all of your data and analytics from one place. LSPs need fast, timely, accurate data to optimize their operations—and you get access to all the information you need to make better business decisions. Even better, if your upstream and downstream supply chain partners integrate with the same platform, you can get the latest information from them so you’ll always know what to expect. 

Expect Deep Integration with Other Popular LSP, Shipping, and TMS Software 

Supply chain software vendors know how important it is for their software to integrate with other LSP systems. With the increasing move to cloud-based solutions, the ability to seamlessly and securely transfer data across various applications and systems has never been more important. Many other supply chain applications and LSP software will be supported “out of the box,” and most vendors also provide an API to allow you to easily develop and customize inter-software data transfers. 

Rely on Information Security Being Front and Center 

LSPs have concerns about how remote data is managed. That’s why modern TMS and supply chain vendors take security very seriously. Whether that’s requiring multifactor authentication to log in, providing an encrypted, secure platform or providing tools to security teams, you can be confident that all your logistics, customer, supply chain and other business data are protected.  

Stay Compliant with Shipping Industry Regulations 

Industry regulations and compliance vary widely around the world. Some supply chain platforms will track things like driver hours, distance driven, International Fuel Tax Agreement (IFTA) reporting; Compliance, Safety, Accountability (CSA) and other transport regulations.  

Know Exactly How Much You’re Spending on Your Supply Chain Platform 

Developing your own TMS or supply chain software comes with all sorts of up-front, known and hidden costs. From development through to support and maintenance, coding and using an in-house platform can be expensive. A supply chain software vendor can help you keep those costs down. Because they’re supplying software to a wide range of clients, they can spread the cost so you can manage your budget more easily.  

The supply chain management and TMS software marketplace has changed. If you’re still using legacy systems or an in-house tool, it might be worth exploring new options from a third-party vendor. You can often get all the security, integrations, features, functionality and benefits you need for far less than the cost of further custom development and support.  

 

Blume Logistics creates a robust network for logistics tendering, tracking, event capture, POD verification and settlement initiation. By connecting a global ecosystem of multi-modal carriers to manage every move, Blume Logistics unites carriers—from ocean to rail to long haul—with first- and last-mile drayage for real-time event and cost tracking. 

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