Investing in Technology
The two keywords in today’s logistics parlance are – Cost-Effectiveness and Responsiveness, i.e., flexibility to be able to change/adjust to customer needs. Both the goals are achievable with the application of IT in logistics processes; whether it is tra
There are many such solutions available which can be tweaked to meet individual needs. Just applying or purchasing these sophisticated solutions is not really going to bring about a change; what needs to be done is – proper training of manpower to understand and fully utilise the benefits of these IT applications.
One such application is the Transport Management System (TMS). This software helps in monitoring Activity-Based Costing (ABC), and at the same time, automates the information flow from Pick to Delivery. It helps to improve transparency of the entire process.TMS can help – Build efficient transportation plans through improved planning and optimisation by consolidating orders into loads and assigning them to the best mode of transportation.
Automate all global shipment tendering process and gain real-time visibility of tracking. Streamline freight settlement processes to ensure invoice accuracy, shorten payment cycles, and lower administration costs.
Accurately manage and analyse transportation performance and speed by measuring against network benchmarks.
Execute inbound transportation processes by collaborating with your suppliers. Transportation involves picking up the cargo from the point of origin and then carrying through to be delivered to the final customer at its destination point.
The pick- up is generally a manual process; where the customer either calls the transporting company to pick up the cargo or the transport company sends vehicles for pick-up on a regular basis. This is a loose loop; TMS helps to register Pick-up Request ( PR) into the system, which then fills the details of – Location – route planning Time – picking time/schedule Weight – helps decide the vehicle type This captures the Pickup Cost, which is generally difficult to calculate and many a times gets ignored due to lack of training and awareness.
Once the load is picked up it is brought to the HUB, wherein all the pieces collected are provided with PCN stickers generated by the system; enabling full accountability of the load. The inbound operations begin at the Hub, where the TMS decides – 1. Route 2. Vehicle Management 3. Cost Management
The route gets fixed, depending upon the destination point of the cargo in question. The type and weight of the cargo will decide the type of the vehicle on which it will be loaded. A full truck load ( FTL) is simple to plan, but when the cargo is less than full truck load ( LTL); it needs careful planning to adjust it with other loads also keeping in mind the destination points. In vehicle management loading sheet is also generated. Along the route Touch Points are identified – for example – movement from Delhi to Mumbai – the Touch Points will be Jaipur, Ahmedabad and Bhiwadi. These points are necessary for the physical assessment of the vehicle.
The TMS does the Cost Management for the entire route calculating not just Line Haul Costs but also Local Pick-up & Delivery ( LPD) costs as well. The LPD costs include loading/ unloading costs, HR/administration costs and Transit warehousing costs.
Vehicle costs include running costs, cost of consumables, driver costs, etc. Besides, loss and damage costs are also accounted for in the system along with other hold up costs or cost due to time delays. The system does Vendor Management and helps to pick out the most cost effective vendor for the purpose of transportation of cargo.
The system captures the entire process up to the point of delivery because Proof of Delivery ( POD) and Delivery Run Sheet ( DRS) are also logged into the system.
Such state-of-the-art systems are readily available for use. One such product is TMS DYNACARGO provided by Million-Minds as an IT solution for transportation. I am sure the system is flexible to add on changes needed to meet specific requirements of the clients/ users. However, to use it effectively a training program is vital to use the system to bring about the much needed cost reduction for any company.
To stay ahead in this competitive environment, the logistics firms need to invest in modern technology and intensive training of their employees. By doing this the logistics firms can be looking ahead to a bright future.