Time and again supply chains across industries have witnessed massive disruptions such as natural calamities, cyberattacks, geopolitical instability, etc. The COVID-19 pandemic significantly impacted the global economy as supply chains worldwide were hit by unprecedented disruption and uncertainty.
Over the past year, supply chain bottlenecks have been the new normal. Port congestions, rising ocean freight rates, vessel and container capacity crunches have plagued the industry. Additionally, COVID-appropriate protocols for safety at work have significantly impacted productivity at manufacturing facilities, warehouses ports, and across logistics networks.
The pandemic has significantly altered consumer behavior with more people choosing to buy online. According to the US Census Bureau, consumers spent $211.5 billion on e-commerce during the second quarter of 2020. The estimate of U.S. retail e-commerce sales for the second quarter of 2021, adjusted for seasonal variation, but not for price changes, was $222.5 billion, the second quarter of 2021 e-commerce estimates increased 9.1% from the second quarter of 2020.
Businesses have shifted from more cost reduction and customer service strategies to more complex focus areas of supply chain resilience that impart the needed agility and visibility in supply chains.
With the growing need for supply chain visibility, businesses are adopting predictive ocean freight visibility solutions to meet increasing demands. Supply chain bottlenecks such as delivery delays, lead time variances, and detention and demurrage, pose as imminent supply chain risks, and incorporating advanced visibility capabilities can significantly help mitigate them. With advanced shipment visibility businesses can access predictive insights across their transportation networks which can further automate the full shipment lifecycle and aid decision making.
This is where digital transformation in supply chains plays a significant role. According to the World Economic Forum, digitalization in the logistics industry could lead to opportunities worth USD 1.5 trillion by 2025.
Digital transformation across industries drives the demand for greater agility in transportation and logistics operations that support businesses to deliver a superior customer experience.
Companies are extensively adopting innovative digital technologies to facilitate digital transformation to create resilient, sustainable, and agile supply chains. Advanced technologies such as the Internet of Things (IoT), big data, and Artificial Intelligence (AI) and their predictive capabilities allow smarter and more efficient transportation operations.
With these technologies, businesses can effectively digitalize the entire end-to-end transportation process of order management, contracting, delivering, and payment. Innovations and digitalization in the transportation industry have been a catalyst in enhancing the ROI for businesses. All of which have increased the relevance and adoption of TMS to derive benefits.
Gartner’s Magic Quadrant for Transportation Management Systems, states that the latest Gartner forecast on TMS, worldwide, estimates that the market is expected to grow from $1.32 billion to $2.11 billion (from 2019 through 2024). That is a growth of 60% over five years. In another report, Gartner clearly states that the annual savings on TMS can be expected to be between 5% to 15%.
This ongoing digital transformation which boosts productivity, increases ROI, enables innovation, and reduces costs will drive the market for TMS.
The movement of goods across a supply chain happens in two courses - the physical movement and its execution on a digital platform. From being a stand-alone freight software a TMS has evolved into a more collaborative system connecting stakeholders across a supply chain.
A Transportation Management System helps businesses streamline the logistics processes in a supply chain. Transportation Management Systems are becoming increasingly sophisticated instruments, building resilient organizations that seamlessly thrive in expanding markets, thus providing significant competitive advantage.
Therefore, making the right choice of TMS allows you to manage your transportation processes effectively, leverage critical data, automate workflows, and solve numerous supply chain challenges. A TMS not only increases your business’ efficiency but also increases your brand value by significantly impacting your customer service levels.
Here are a few factors we’ve listed that drive the adoption of TMS across enterprises.
SAP Transportation Management (TM) is a comprehensive transportation management solution that helps shippers, carriers, freight forwarders, and 3PLs, to plan, execute, manage, and optimize transportation-related activities.
SAP TM can help consolidate orders and effectively generate greater returns from freight spend. It enhances transportation planning with analytical capabilities that forecast demand and shipment volumes. SAP TM can help gain real-time visibility into international and domestic movement of goods across all modes of transportation, effectively amplify fleet and overall logistics performance.
Here are a couple of features that make SAP TM a holistic transportation management solution:
We have written extensively about SAP TM functionalities and why it is a perfect solution for all transportation challenges in a supply chain in this Buyer’s Guide.
A TMS can help you achieve diversified goals such as automating contract negotiations, enhanced shipment visibility, reduction and optimization of freight spend. It can transform your business processes and increase control over logistics operations while reducing complexity and enhancing productivity.
Digital Transformation requires experts backing up your efforts in implementing complete digital supply chain solutions. As global leaders of SAP Digital Supply Chain implementations (SAP TM, EM, LBN, EWM & GTT), we have enabled businesses worldwide to develop exceptional customer experiences through streamlined business processes, accelerating their digitization efforts.
Together Novigo and SAP enable the world's leading enterprises to digital maturity. We have the largest number of SAP TM and EM engagements than any other SAP partner. With our presence in North America, Europe, Australia, and India we possess global service delivery capabilities.
Our focus is on identifying innovative ways of running smarter supply chains through business process improvement, enabled by SAP Digital SCM Technology. We help build business cases for organizations based on their specific requirements.
In these Discovery Workshops, Novigo Experts can help assess your digital maturity in relation to your competitors. We identify advantages and opportunities with clear-cut methodologies that leverage our domain expertise and best practices. We then guide you with the correct technology solutions that can help attain your business and strategic goals.
Instant TM is Novigo’s packaged rapid time-to-value solution for your transportation management transformation in SAP S/4HANA. We've developed Instant TM as a solution based on Novigo´s best practices acquired over our many years of SAP TM implementations globally across various industries. Instant TM is a perfect solution to digitize logistics processes while assuring quality, reducing time and materials.