According to the ARC Advisory Group, the leading research and advisory firm in manufacturing and supply chain solutions, "Transportation can no longer be viewed as a standalone function. Instead, it should be viewed from a more holistic perspective: as a critical component of the Procure-to-Pay and Order-to-Cash processes."
As companies have begun to see transportation as an essential element of the supply chain, manufacturing and distribution companies are driving the rapid expansion of the transportation management solutions space, growing that market at a much higher rate than predicted. Now, not only are warehouse, logistics, and IT management invested in the success of transportation management systems (TMS), but C-level executives have also joined in as stakeholders as they see the effects that their companies' supply chains have on the overall business.
It's clear that TMS—and how it affects the supply chain and the overall business—is on everyone's minds. But what many companies haven't yet realized is that using an inappropriate platform to run their TMS solutions can actually have adverse effects on supply chain productivity.
Many smart companies have chosen the iSeries to integrate all aspects of their businesses. The platform's reliability, superior processing power, flexibility, expandability, and lower cost of ownership make it the obvious choice to run mission-critical applications. But despite utilizing such a powerful platform, TMS is still being managed on a collection of PCs and servers. So why haven't companies made the switch?
- "We got them for free from the carriers."
- "Shipping doesn't get a lot of visibility in our organization."
- "We've already invested in building an interface to the PC system."
Hundreds of iSeries users have replaced their PC transportation management systems, and the results have been exceptional. What benefits do companies realize when they start using their iSeries for shipping? Why should they make that move?
Reason 1: Improve Business Decisions Based on Accurate Data
An iSeries-based shipping system stores all the available data on every shipment in a single DB2 database. This information provides an incredible source of data on which to base business improvement. Ad hoc inquiries and "what if" modeling can provide answers to any number of business questions, including these:
- What are our true shipping costs by product, by customer, by carrier?
- How does this compare with our estimated costs and with how we are charging our customers?
- Do our carrier discounts match our business?
- How often and why are we expediting shipments using more costly services?
Here's a case in point: Greater insight into shipping data with the goal of improved customer profitability was one of the drivers behind a leading distributor of fluid-handling products' move from 22 standalone PC shipping systems to multi-carrier shipping software that runs on the iSeries.
By storing all the shipping data in a single DB2 database, the company gained insight into accessorial charges such as residential delivery, non-consignment, address correction, and oversize charges—many of which should have been passed along to customers or avoided altogether. These charges added up. When the company compared its estimated shipping charges against actual carrier bills, it found that it had paid over $100,000 a year in accessorial charges.
With greater insight into its shipping data, the company can evaluate customer profitability and manage the waiving of customers' freight expenses. Reports generated from the company's historical database provide its C-level executives with the business decision information required to evaluate customer profitability—after accounting for freight discounts.
To read all the critical reasons why using your iSeries can help improve supply chain efficiency, download the free white paper "Eight Reasons to Use Your iSeries for Shipping" and learn how eight companies, each with complex requirements and complex systems, leveraged the power of their iSeries and Varsity solutions to...
- Provide better customer service
- Improve operational efficiency
- Optimize IT resources
- And more