TMS, Routing, WMS, Load optimization, Demand Forecasting, Dock Scheduling, Workforce Scheduling, Fleet Maintenance, Pick optimization…A VP of Supply Chain nowadays is not only expected to have in depth knowledge of all these systems, but also to be able to choose and implement whichever fits his organization best. This being just the IT/system/process side of the job. To cut through the clutter we’ve decided to write a series on TMS/VRS (Transport Management Systems/Vehicle Routing & Scheduling) in order to help you understand what they are and what the basic necessary requirements entail for your organization.
When the desktop started infiltrating companies in the 80’s, active Operations Research became a possibility, giving rise to desktop routing applications, which drastically reduced the numbers of trucks and fuel needed to do the same deliveries using optimization. At the time they mainly worked with static batch optimization. Increased computing power and the liberation of GPS signals gave rise to two more technologies in this space, the TMS and Monitoring of Trucks. The TMS started as something that did Fleet Maintenance, controlling maintenance days of the fleet, tire usage and started controlling fuel costs. The Monitoring allowed more control on driver days, making sure that no one was using the bosses truck to go miles off route to do personal things instead of work.
Today, with the huge increase in computation power and even larger improvement in optimization techniques, consolidation has begun. This leads to a small company needing just Route optimization, but the bigger the company is, the more functionalities it needs. The Route optimization application can now also keep track of the Fleet Maintenance, do the Load and pick optimization, select the best docks to prevent overcrowding and keep an equal demand for workers throughout the day. With the rise of Automated warehouses, the missing link between the very flexible Logistics of the road versus the very static Logistics of the production process is also being bridged.
Why do I need this?
I only use 15 trucks: then you don’t need it. Most things can be done on your own with common sense. However, there are more and more Cloud based solutions available that can help get you the most relevant functionality of routing which will help you make slightly better routes and keep track of Fleet maintenance for a small fee per truck per month.
I have outsourced all of my Logistics so I don’t need to think about this: actually you do. Especially when outsourced, you need to check the performance and service levels offered and if it would be easy for you to offer better service or lower costs if you would do it in-house.
For everyone who works with expensive assets, optimization, planning and execution control are essential. The more expensive the assets the more important this is and in the case of trucks this has a huge environmental impact too. The idea of this series is to delve deeper into each of the functionalities and possibilities in the world of supply chain. Don’t miss our next post on what the future holds for CPG, Retail and Oil and Gas industries, each with their own particularities, but with interlocking trends.