A lot of planning and preparation goes into these major sales events, and for many it’s already time to start strategising for Black Friday. This US import has been named as a heavyweight championship event in the UK retail calendar, and now represents the start of the Christmas shopping season. Will your Transport Management System (TMS) be able to cope with the pressure?
Online retail successes influence transport management
The high street was relatively calm last Black Friday weekend. However, the discount event still saw huge sales, with over £1 billion spent on the Friday alone and over £3 billion spent across the full weekend.
According to Metapack, online spend increased by 45% from the Black Friday weekend in 2014, as customers stayed home to browse for bargains in comfort. Online sales, and click and collect orders, are dominating the retail industry more and more - and this trend is putting effective transport management at the forefront of company strategies.
As we can expect this pattern to continue in the future, it’s essential that transport departments are confident in handling complex logistics operations to ensure customer satisfaction.
Why retailers need better transport management systems.
An astonishing 22 million parcels were expected to be delivered following Black Friday 2017. However, LCP Consulting predicted that 10% of these would not arrive on time, and that over the Christmas period, a total of 17 million parcels would fail to arrive when the retailer promised.
Thanks to the peak shopping period which occurs in the build up to Christmas, online retailers can process 40% or more of their total order volume in the final quarter of the year. Retailers must therefore ensure that delivery services are ready to deal with the rush when Black Friday returns in full force for 2017.
Globalisation, omni-channel fulfilment and online retail have “eliminated geographic barriers” and contributed to increasing pressures felt by the retail supply chain. However, “TMS reduces a number of these headaches of moving freight from origin to destination, by matching carriers and optimizing modes,” Chris Cunnane, senior analyst with ARC Advisory Group, told Logistics Management.
A TMS can also help retailers to deal with any labour shortages over the peak period. The UK is in need of 45,000 qualified drivers to plug the current skills gap, according to FTA estimates. While companies struggle to hire qualified drivers, a TMS can offer invaluable help by providing an overview of driver availability and carrier capacity.
Solving problems with integrated transport management systems
A TMS generally sits between an Enterprise Resource Planning (ERP) system and Warehouse Management System (WMS) and deals with both inbound procurement and outbound shipping. It handles routing, scheduling, carrier selection and load tendering, as well as shipment consolidation capabilities.
According to TechTarget, companies aiming to increase operational efficiency are ramping up efforts to integrate WMS software with TMS software. Rather than these technologies working in isolation, their integration enables end-to-end supply chain visibility across warehouse and shipping functions. This holistic view can lead to better coordination and planning, and improved delivery times for customers (all especially useful over the Christmas period).
Choosing a cloud or on-premise solution
Logistics Management recently found that only 35% of shippers use a TMS as part of their overall supply chain management strategy. However, 39% of companies planned to either purchase or upgrade their TMS during the coming year.
Many retailers are likely to still be confused about how to go about implementing a TMS. That’s where we come in. OBS logistics are experts, offering both on-premise and cloud-based solutions to suit any business requirements.