Why Transportation Management Systems Are Vital For Automotive Industry

You are undoubtedly used to disruptions if you work in the logistics and supply chain field. Whether it's a global supply catastrophe or a simple materials shortage, #ShipHappens, and it hurts.

Despite the disruptions, the brethren of the supply chain go about their work by doing whatever it takes to #GetShipDone. Whether finding an alternate supplier, working overtime, or jumping through bureaucratic hoops, they will find a way to make things happen.

The pandemic, lockdowns, and global disruptions exposed the vulnerabilities in supply chains we had been shouting about for the past decade. Excel isn’t a planning tool, following up with suppliers via phone or email is inefficient, and you shouldn’t need a case of sticky notes at all. Our red engine light had been on for years, with businesses hoping we could hold on just a little bit longer before a catastrophic breakdown.

Suppose you're managing your supply chain with a mishmash of Excel spreadsheets, phone calls, and emails. The lack of technology is inefficient and very difficult to track and optimize. It’s not a great environment for any industry, let alone one on the heels of a massive transformation like the automotive industry.

What is a TMS, and what does it do

For years supply chains operated on legacy systems, insufficient to manage the complex flow of goods. While supply chains patiently waited for the technology of industry 4.0 to come to the rescue, supply chain professionals kept things together behind the scenes with excel, late nights, and quite a few expedites.

A TMS can provide you with the visibility and transparency into your supply chain operations that you need to make informed decisions about allocating resources and streamlining your processes. With the help of a TMS, you can understand your inbound and outflow of goods within your supply chain to make better decisions about where to source materials and products.

TMS software allows users to manage their supply chain by viewing the location of shipments in real-time, receiving alerts for delays or disruptions, and identifying risks. This level of visibility is ideal for companies like the automotive industry that have hundreds of suppliers across the globe that are all aligned to meet the Just-in-Time supply chain. They need comprehensive visibility to plan the production and assembly of parts or finished vehicles, one part missing can have serious financial consequences. It's no wonder that the use of TMS software is exploding; according to a study by Grandview Research, the TMS market will reach $31.18 billion by 2030.

Businesses implementing a TMS can expect improved customer service, increased operational efficiency, and lower transportation costs. If you're doing it right, customer satisfaction will breed brand loyalty. When your business runs efficiently, that loyalty can be downright contagious. It's like a good book or CrossFit – you can’t help but tell everyone about them and spread the love. Loyal customers become brand ambassadors by sharing their experiences with their network and returning for more.

What to look out for in a TMS

A well-performing TMS will automate and streamline the freight management process from start to finish. In today’s environment, a cloud-based TMS is essential for accessibility from anywhere in the world with an internet connection. Lastly, a TMS should evolve and constantly improve to ensure it meets the needs of logistics professionals, customers, and your ever-changing business.

Here are the non-negotiables for your TMS

Automates Procurement Automates this process so that you and your team can focus on other important aspects of your business.

Streamlines Shipment Execution Quickly execute shipments without worrying about transportation management's complexities.

Advanced Real-Time Tracking Tracking process so that you can monitor your shipments in real-time and be alerted when an exception happens.

Keep It Simple Enterprise software should not be complex for no reason. It is supposed to make your and your team's lives easier. Make sure that the implementation process and user interfaces are up-to-date and are indeed solving your core problems.

Evolving Cloud-Based Software Cloud-based and constantly evolving to meet the needs of our customers.

User-Friendly Software is only as powerful as users leverage it. Pick a TMS is designed with the users in mind. Don't get distracted by the fancy features.

Immediate ROI You should see cost savings from day one. If you have to pay the big bucks for consultation and implementation, think twice, as those are red flags that it will take a while for you to see ROI.

Global Coverage Your TMS should operate everywhere you do business and want to do business. Plus, support all your freight modes.

Single-Screen Solution Having a single platform for all your transportation requirements removes non-value-added processes that slow your team down. Eliminating this waste empowers your team to operate faster and more efficiently.

Logistics Service Provider Performance Data With data collection and analysis at your fingertips, you can get real-time information on the performance of LSPs. Benchmarking them against their peers so you know how to make better decisions and who to work with in different scenarios.

Analytics & Reporting Data is the new oil. You own the data, and an ideal TMS should give you insights into your own performance and generate the reports you need periodically. After all, you can't improve what you don't measure.

Why you should think about TMS now

The automotive industry is experiencing a transformation as it transitions from internal combustion engine (ICE) cars to electric and autonomous vehicles. This change will affect the flow of goods, where suppliers operate on vehicle designs for parts or production capacity planning. Not only so, but the shortage of chips due to disruption in the semiconductor industry also poses significant challenges to the automotive supply chain.

Transportation Management Systems help with these changes by allowing shippers with transportation needs to be able to gain visibility, control, cost avoidance and productivity.

As the automotive industry continues to evolve, manufacturers must develop innovative, data-driven strategies to stay ahead of the competition. For many Original Equipment Manufacturers (OEM) and suppliers, that quest for supply chain manufacturing optimization led to the integration of lean methodologies, automation, and robotics. Throwing automation or complex fixes could worsen the situation if they don’t address what matters most.

Autonomous driving is on the heels of electrifying vehicles, which expects to impact the automotive industry profoundly. As the automotive industry shifts from ICE vehicles to EVs, the traditional tier system that has long defined the supply chain may no longer apply. In the coming years, we’ll see a consolidation of suppliers as companies look for ways to streamline their operations and cut costs. Everything could change, including how goods move, how we utilize cars, and how we purchase them.

Self-driving cars will change how we think about transportation, and OEMs and suppliers must begin preparing for this shift. The race to develop autonomous vehicles is heating up beyond major automakers, even software companies, and start-ups eager to commercialize the technology.

As the automotive landscape changes, TMS will play an increasingly important role in helping manufacturers run their supply chains smoothly.

The bottom line -- there is no shortage of uncertainty for the future of the automotive industry. Having a best-in-class TMS is one way for the automotive industry to provide the resilience needed for navigating through this evolutionary shift.

How can Cargobase help

Cargobase has partnered with Fortune500 manufacturers primarily in the automotive, semiconductor, oil and gas industries to develop software that truly simplifies the lives of logistics professionals. Unlike most enterprise software, Cargobase is easy to implement, user-friendly, and produces immediate ROI. Loved by users across 50 countries and rated #1 for 11 attributes on G2.

Give you and your team a chance to #GetShipDone better, cheaper, and faster. Let's chat!