Introduction
The transportation technology market has many solution options today. Of late, there has been an explosion of cloud-based modules. But they are not a full Transportation Management System (TMS) per se.1
Today, a cloud-based TMS solution consists either of components that are woven together, or is a single-platform solution. We define a single platform as one that includes all the functions required by the user, across the whole process, without having to integrate separate components via a ‘consulting project.’ The single platform is inherently data-centric. This is an ideal state; but certainly, there are a few players whose goal is to provide it. A single-platform approach becomes an important option for someone considering a technology purchase.
In this article we want to differentiate a single-platform TMS from other offerings, delve into what this option is, and why it is important.
So What Is a Single-Platform TMS?
Unified, holistic, integrated, and visible. These are words we banter about so often. They have blurred into the background of supply chain chatter for decades. But what do they really mean? Holistic means emphasizing the importance of the whole and the interdependence of its parts versus integrate, which means making into a whole by bringing all parts together.
As noted in our previous article, Transportation Systems Redefined, there are many modular approaches in the transportation software market. They serve important functions. But they either support one process or require a high degree of project-based integration. Thus, some organizations are seeking more unified and holistic approaches.
Holistic and integrated seem to be the right characteristics here; that is, seeing and supporting the whole as more than just the sum of the parts. Think of it this way: though many organizations or users with unique functions may only use part of a system, their workflow and their data have direct relevancy to others. Hence, that interdependency must be supported. Integration across all players and all systems becomes critical in transportation. The need for accuracy and the ability to serve the time requirements appropriate to the process is crucial. So the systems must be responsive and often, continuous in their integration capabilities,2 bringing in the needed third-party data exactly on time.
When we look across the market at transportation offerings, there are many great companies, but few who offer this single-platform approach.
Figure 1: Common and Unique Requirements in the Transportation Industry
One company that is gaining rapid momentum due to this platform approach is MercuryGate International, Inc. So far, unlike many of their competitors’ approaches, this is an organic growth play. Their intent is to provide a holistic business capability to companies who need in-depth management across the logistics function.
Solutions can be designed for one segment of the industry, for example, shippers, Logistics Service Providers (LSPs), ocean, or trucking. MercuryGate has chosen to leverage the common requirements (Figure 1) of the different organizations into their single platform. So what might be the benefit of this?
Why a Single Platform?
In our multi, multi world, the single platform becomes an ultimate go-to source for end-users’ needs. A single operating system enables a common standard to be used for an organization’s development and operations. There are architectural attributes the developer must focus on to create this single-platform effect.
Architecture of the Single Platform: Technical Advantages
Key attributes in the architecture are often:
Single database effect — Unity of data is key, so databases today need to provide a single version of the truth — always on, always current, yet secure. The data becomes available and referential as it is created once and then is available across trading partners, ensuring continuous communication.
Workflow vs. Integration – rchitecturally, module integration is minimal. Workflows are built to leverage the foundation of the single platform, rather than using APIs (integration code) to connect software modules. This allows data to flow across the process, with end-users able to build more process workflows without having to write and maintain ever-changing code.
Reuse — Here is an interesting and practical element, one that is often not thought about. From a developer’s standpoint, code is written once and leveraged across the whole platform, providing consistency in process and data.
Standards-based — Leveraging and adhering to common practices and standard data in the industry allows for uninterrupted flow and improved accuracy between entities.
Advantages of the Single-Platform TMS
Pragmatically, from a business perspective, what does MercuryGate’s single-platform approach provide?
- Spend Management — Interestingly, many large companies cannot state what their total freight spend is, what to say of cost by lane, mode, or carrier. Considering the importance of transportation in terms of the total COGS,3 and the current pressure on profits and performance, this is a huge issue. A single platform ‘always knows’ what you are spending.
- Across the time-horizon — Uniting network design, routing, and optimization with execution on a single platform allows you to look forward and backward in time and ask: “What were we thinking? Did our plan actually achieve the desired results?” Or, “I am about to execute a decision — is that my best choice?” These are not trivial issues, and they are at the heart of superior tactical performance: on-time, protected freight; and long-term performance: profit and market growth.
Multi-modes – single platform for ocean, air, and ground allows the user to evaluate different mode options or manage multi-leg, multi-mode options, which is often desired today. In fact, intermodal in the US has grown significantly, with many inbound ocean shipments using rail (a cheaper and greener mode of transportation than trucking) for a long haul and then opting for trucking for the last leg ‘fan out’ distribution.- Managing the total business model — LSPs (brokers, freight forwarders, and 3PLs4) need to manage their total business activities in a seamless and productive way. In essence, these organizations view the TMS as their ERP system. Thus, there is one system for sales, transportation planning and execution, payment, settlement, and post analytics. Using one system also allows the service providers to evaluate their customers and determine if they, themselves, make a profit in the relationship. Many LSPs have stepped back from the day-to-day execution mind-set and determined that they can position themselves as an expert in a single market segment. Analyzing how and where they make money allows them to fine-tune their business model and market to just that customer base. Profit is a beautiful thing!
- Carrier performance evaluation — Module-based approaches have major challenges in evaluating and comparing carriers and understanding the carrier segment. CIM5 within a single-platform approach6 provides carrier information sliced from web information services to provide real-time alerts about the changing carrier market. Within the platform, carrier data management and analytics allow users to examine the history of specific carrier relationships. This enables a performance evaluation to improve/fine-tune the relationship, services, and financial terms, or transfer the spend to other carriers.
- Time-to-benefit — Large businesses seeking cohesion within the organization want to reduce the number of moving parts. Smaller organizations that are moving their business onto the TMS platform can transact business quickly.7 We know that IT projects are fraught with risk. Reducing complex multi-system integration reduces that risk.
Multi-modes – single platform for ocean, air, and ground allows the user to evaluate different mode options or manage multi-leg, multi-mode options, which is often desired today. In fact, intermodal in the US has grown significantly, with many inbound ocean shipments using rail (a cheaper and greener mode of transportation than trucking) for a long haul and then opting for trucking for the last leg ‘fan out’ distribution.Conclusion: Cohesion
Achieving a cohesive environment is a huge challenge in logistics. Thus, in the late nineties, many companies handed it off to logistics third parties. And although third-party segments continue to grow, many shippers are taking back some of the process to gain better control. That puts more pressure on third parties to step up to the challenge and improve the information and services they provide.
Many of the larger third parties developed much of their applications in-house. Analysis of speed vs. cost-to-develop is giving rise to TMS purchases. As we evaluate the transportation market, we see that part of MercuryGate’s success is due to that trend, as well as to some of the other factors we have mentioned in this article.
Buyers need to think through what they really need and what it will cost to get there. The ‘there,’ by the way, is a moving target — often over- or understated. So having that single platform allows the user to grow into the broader capabilities already on the platform. Specifically, MercuryGate’s customers can expand their use of the platform without initiating a new project and a new set of integration code, and avoid the disruption that inevitably accompanies such an endeavor.
One last thought on single platform that often is talked about is the issue of user acceptance. Creating a common systems experience — same UI, sharable data, and new capabilities emerging from the cloud — creates an environment that is easier for employees to use and adapt to. Over time, as new capabilities are deployed, change management issues are reduced. User acceptance is the key to productivity and cohesion. Based on our observations, MercuryGate has achieved that elusive objective, which is probably one of the major reasons for their success.
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1 To understand the different offerings, read Transportation Systems Redefined. — Return to article text above
2 This was discussed in Transportation Systems Redefined. — Return to article text above
3 Cost of Goods Sold — Return to article text above
4 As well as carriers who not only manage their own fleets, but may expand their capacity with other for-hire carriers — Return to article text above
5 We define Carrier Information System (CIM) in Transportation Systems Redefined. — Return to article text above
6 Such as MercuryGate’s Carma Carrier Management solution. Here, they update carrier credentials and safety records from source information services. It not only allows you to ‘auto fill’ carriers’ information for your TM activities, but also alerts you to the fact that that carrier you used in the past might not have maintained their insurance, for example, or their safety record has fallen. — Return to article text above
7 In speaking with many brokers, we discovered that many have go-live times of a month or two with MercuryGate. Two electronics manufacturers, using MercuryGate, gave project go-lives of 3 months and 4 months, respectively. These two cases were interesting, since they had attempted to use a transportation module within an ERP, and they turned to MercuryGate after major challenges in over a year of effort with the ERPs. — Return to article text above
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