Page 12 - Logistics News - July August 2023

TMS

Save money with a TMS

By Carsten Schubert, Co-Founder and Operations Director,
Transnova, www.transnova.co.za

As the fuel price increases, a transportation management system (TMS) can save
you money in so many ways.

n South Africa, the number of companies that utilise a Perhaps the most important chart in this report
transportation management system (TMS) to manage showed the key areas where a TMS can reduce a
Itheir transportation is low compared to our European shipper’s transport spend and the potential cost
and US counterparts. However, this is rapidly changing reductions driven by those different savings buckets.
with the arrival of software as a service (SAAS)-based But, there are so many ways a TMS can drive logistics
TMS systems that are cost-effective and quicker to savings; trying to drive savings in all areas in an initial
implement. implementation would greatly increase the chances of
having a failed implementation.
Here, we offer you a viewpoint from the US where
Steve Banker, Co-author of Logistics Viewpoints and a So, a key question becomes: On which areas
contributor to Forbes.com and the LeanLogistics blog, should a company focus initially? This depends partly
discusses the areas where TMS offers the greatest on a company’s strategy, but it also makes sense to
financial impact. focus on areas where the savings potential is greater,
while the chances of failure are lower. The following
Perhaps no other supply chain application offers so table shows our analysis of the risks and rewards
many ways to drive value as a TMS. A few years ago, associated with driving transport savings in the different
the ARC Advisory Group surveyed and talked to over 50 areas.
companies that had implemented a TMS to understand
the return on investment (ROI). Over 40 percent of A quick note: In a few of the categories, we have the
respondents reported freight savings of between 5 risk described as ‘Easy to Difficult’. In these categories, it
and 10 percent, and 23 percent reported freight cost is easy to drive a certain level of transport savings with
reductions of over 10 percent. basic functionality, but difficult to implement the most

10 JULY/A U GU S T 2023 www .l o g ist i csn e w s .c o .z a