Logistics Software Aids in Retail Vendor Compliancy

Vendor compliancy occurs when a vendor meets a set of requirements imposed on it by a buyer of its products. Vendor compliance focuses on making it easier for the buyer to receive goods, process them upon reception, and bring them to store shelves, where applicable. Unfortunately for manufacturers, the most complex compliance standards are usually handed down by companies that have the largest buying power, a fact that causes some companies to question whether the money necessary to implement the standards would be worth the profits that resulted from doing business with an entity. In the long run, adapting business standards to meet compliance standards is almost always beneficial, as nothing can replace the selling power of having large contracts with major companies and retailers. However, affording the infrastructure necessary to facilitate compliance can still be a problem in the short run.

Retail Vendor Compliancy and Logistics Software

When you look at a major buyer’s retail vendor compliancy scorecard, a rating system that ranks vendors according to their compliance to a number of requirements, it’s often difficult to ascertain how to begin meeting the requirements. However, upon closer inspection, many companies find that a majority of compliance issues, and certainly the most critical ones, are associated with the shipping process, such as product labeling, product packaging, and method of shipment, to name a few. Yet, here there emerges another roadblock for many vendors: how to gain more control over the shipping process through logistics. Most companies receive their shipping logistics from one of three sources: an in-house logistic department, a third party logistics (3PL) provider, or by implementing logistic software, which allows you to become your own logistics provider without possessing logistical expertise.

In-House Logistics

Meeting shipping needs in-house is the traditional preference of companies that can afford to hire their own logistic experts, who typically earn around $80,000 per year. This fact alone prevents many companies from going in-house with their shipping process, as well as the fact that most companies pursue in-house logistic arrangements upon purchasing their own fleet, once and for all ending their dependence on 3PL.

3PL

What you receive from 3PL depends entirely on what type of 3PL provider you contract with: standard 3PL providers, who offer basic shipping services and seldom practice shipping logistics as a core practice; service developers, who offer more specialized services but not a comprehensive approach to the shipping process; customer adapters, who manage an existing shipping process but don’t propose new solutions; and customer developers, who manage the shipping process and do propose new solutions. For vendor requirements, customer developers make the most sense. But you can receive the same level of focus through logistic software at a fraction of the cost.

Logistics Software

Also referred to as freight transportation software, logistic software is priced as a software as a service (SAAS) offering, making it less expensive than other logistic options. What this means for vendors is less money spent on meeting vendor requirements, and an annual reduction in shipping expense that can be delegated toward other compliance needs. After using freight transportation software for one year, most companies experience a 10 percent reduction in shipping expense that increases in years following.

Logistics Software on Freight Load Boards: An Overview

Freight matching load boards are one of the ways the Internet has transformed the auto transport business. Instead of labor-intensive pre-digital systems that rely on phone communication and physical record-keeping, online load boards allow truck operators, brokers and shippers to instantly deliver quotes and bid for jobs. Another major advantage of online boards is the ability to integrate logistics software, allowing carriers to plot routes and track all kinds of useful statistics automatically, right through the online interface. This article is a basic introduction to integrated load board logistics software.

Load boards aren’t just for freight carriers – shippers who have freight to transport can create accounts to post their job on the board, though they will see a different interface than either brokers or carriers. Advanced boards have the ability to provide quote estimates that they compile based on past transactions conducted on the board, to help the shipper anticipate and budget costs. When shippers post jobs, brokers and carriers can view them to optimize truck loads and bid on the contracts.

As we mentioned earlier, implementing load boards online also makes it possible to implement advanced computerized logistics solutions, and this is exactly what the industry has done.

If you ever wondered how auto transport carriers pick the best routes, they do it by using truck mapping, routing and mileage software that selects the optimal path automatically. For a modern business that relies on transportation – not just trucking companies, but supermarket chains and many others – logistics software is a necessity. Large companies often have heavily-customized in house solutions; however, most auto transport carriers are relatively small businesses, so as an extra service, most online auto transport boards provide truckers access to logistics software as part of their membership.

While there is a variety of logistics programs on the market, most boards active today incorporate the PC*MILER software by ALK Technologies. Other route planning and mileage tracker software includes Viamente Route Planner, Telogis logistics suite, TruckMiles by ProMiles software and a number of others.

Integrated logistics software allows a board member to plan routes, estimate gas usage and track mileage – all important steps in giving the customer an accurate quote that reflects current fuel prices and won’t obliterate the carrier’s profit margin.

Moreover, logistics programs, including load board integrated ones, aren’t limited to calculating routes – with GPS tracking, they can also pinpoint the location of a vehicle and calculate the number of miles actually traveled, average speeds, fuel efficiency and much more. These features are great for carrier financial calculations, bookkeeping and efficiency improvements.

Routing software can contain helpful features for the carrier operator as well – while in transit, the driver can connect to the app and check traffic and road condition information from the 511 service in states and localities where it’s available.

These are only some of the great benefits that integrated logistics software can provide to transport carriers and truck operators. Learning to use this software to save gas and money, and improve workflow efficiency is crucial to your company’s success as a freight carrier.

Operating a Transportation Management System Using Logistics Software

A Transportation Management System (TMS) is an element of supply chain management that is positioned between a company’s Enterprise Resource Planning (ERP) system and its shipping process. Ultimately, the system ensures that a company’s resources are invested in the best transportation process for its freight, one that offers the best combination of freight care, delivery time, and delivery cost. Supporting the system’s management function is a logistics resource, typically either (a) an in-house logistics department, (b) a Third Party Logistics provider (3PL) or (c) logistics software. How well the system works – and the style of management it offers – depends largely on the logistics resource.

Evaluating Logistics Resources

Most shippers prefer to have logistics performed in-house. Traditionally, this requires hiring experts – something that is common among large, high volume shippers that have a transportation fleet, but not among small to medium size shippers that don’t have a fleet. For these shippers, the traditional alternative to hiring experts is contracting with a 3PL provider – an arrangement whose value depended on the practices of the 3PL provider. For many companies, 3PL providers present three problems:

  • They make the transportation management process seem distant
  • Their load pairing strategies aren’t based on the broadest options
  • Their highest level of transportation management can be unaffordable

In recent years, logistics software has provided shippers with an alternative to high level 3PL, one that is capable of managing the shipping process and discovering better shipping options as they arise. In addition to costing less than a 3PL provider that manages and innovates the shipping process (i.e. a customer adapter), the software lets shippers take control of their TMS by facilitating three functions that a good TMS should facilitate:

  • Planning the shipping process. A TMS should plan the shipping process according to the shipper’s parameters, which include such things as LTL rates, delivery time and warehousing fees.
  • Monitoring the shipping process. A TMS should monitor the shipping process in an administrative capacity, handling such things as transport alerts, customs clearance and invoicing.
  • Measuring Key Performance Indicators (KPIs). Without the consistent, accurate measurement of KPIs, a shipper can persist with shipping options that don’t offer the best value.

Logistics software can facilitate these functions, allowing shippers to have the logistics function in-house without investing a significant amount of capital to have it there.

Conclusion

Companies that ship products need an effective transportation management system, which means that they need a comprehensive logistics function. Traditionally, shippers have acquired this function by hiring in-house experts or contracting with a 3PL provider. Today, however, logistics software gives them the opportunity to have the logistics function in-house without paying a premium to have it there.

For small to midsize companies, hiring in-house experts can be cost prohibitive, and contracting with a 3PL provider can bring the feeling of being disconnected from the shipping process. Logistics software can resolve both issues by offering a complete logistical function on a Software as a Service (SaaS) model.

3 Key Processes Of Transportation Management System

Transportation Management Systems are really meant to increase the ROI and efficiency of your logistics company and has become a mandatory element for an effective logistics management. The transportation management system or TMS helps your make your logistics management more organized and accurate.

Transportation Management software are aimed at bringing down the time, cost and improved profit. If the time and cost taken are decreased, then there is no doubt that your profit would sour high. All you need to do is to learn to manage this amazing tool in the right way. If you are not managing TMS in the proper way then you cannot expect your business to improve.

Here I would like to talk about the 3 key processes of a transport management system, which have an influential role towards the success of your logistics business.

1) Planning and Decision Making
Planning and Decision making are the most essential parts of any successful organization and cannot be ignored at any cost. If the planning and decision making are not up to the mark, the business is sure to suffer. There have been many instances when many companies have vanished due to lack of proper planning and decision.

A transportation management solutions helps you to plan your logistics business effectively and categorize your transport schemes accordingly based on the importance as per user policy. Some of the major things that plays vital role in proper planning and decision making are transport cost, shorter lead-time, fewer stops, flows regrouping coefficient etc.

The TMS systems is also known as logistics management system and helps you to calculate your transportation cost and adjust your routes so as to experience a decrease in the transportation cost. It helps you to find out which routes yields you better profit margin and which are the stops that needs to be avoided without harming your profit ratio.

In the end the report generating facility offered by this vehicle management system helps you to analyze your logistics management in a much better way. You can even change the scheduling and routing of your vehicles for better results. The report helps you to plan better and make decisions based on that.

2) Customer follow-up
TMS helps you to experience a better customer relationship and follow up due to its enhanced features. One of the advanced feature that makes the tool stand out is the GPS vehicle tracking facility, which helps you to track your vehicle with the help of satellites. With this you would be able to inform your customers as where the vehicle is and when their goods would be delivered. It also helps in effective billing, accurate report generation, documentation etc, which makes your customers happy and satisfied.

3) Measurement
A transportation management system offers you a detailed and customized analytics report which would help you to understand your business in a much better way. The report would help you to find out the areas that needs improvements and also help where you stand when compared with the previous months. Certain reports helps you to drill down more deeper so as to get a better assessment regarding your vehicle routing software.