Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
In a recent posting in "Logistics Viewpoints," an online newsletter published by ARC Advisory Group, analyst Steve Banker reflected on two companies that had recently implemented transportation management systems (TMS) with an eye to reducing costs and improving service.
In one case, the company achieved its goals, wrote Banker, a member of ARC's supply chain and logistics consulting team. But in the second case, the firm had only limited success.
What made the difference, Banker concluded, was not the software, but how the customer managed the implementation. The first company had strong executive support. The second had a sales team that ignored the TMS forecasts for delivery times, promising faster service to win business—a move that ultimately led to complaints about "late" deliveries.
He wrote, "When I have talked to companies with failed supply chain implementations, they typically do not blame the software company. Rather, they admit that the fault was their own, usually because they couldn't change their internal culture, especially if a project requires the sales force to change the way it wants to do business."
In an interview with DC Velocity, Banker expanded on that theme. "When I talk to end users who have had bad implementations, they often say that while they would like to blame the TMS vendor, they have to admit that they have to take a lot of the blame," he said. "They did not have enough buy-in, they did not have enough training, they did not have good project management skills."
So how can companies avoid these pitfalls and ensure a successful implementation? We asked several experts for their advice. What follows are their four steps to TMS success:
1.Build the case. "It starts with the business case," Banker says. "You need to understand that clearly." He explains that the potential returns from a TMS implementation will vary by the type of organization and that it's important to be realistic about what you can expect. "A TMS in some industries is just going to have a higher ROI than in others," he says.
Banker cites the food and beverage and consumer packaged goods industries as two sectors where companies can expect a big payback from a TMS—typically through consolidation and backhaul opportunities. "There are just a lot more optimization opportunities in that sort of supply chain than, say, a chemical company, where an order goes out in a full truck that comes back empty. No one wants to clean the truck, so there are limited optimization opportunities," he explains. "In the business case, you have to understand the optimization buckets and how big they are, and not base your case on, say, an average 8 percent savings."
Mike Hood, director of implementation and professional services for Transite Technology, a TMS developer, stresses the importance of good communications with the vendor. "[The software developer] needs to have a list of what you are trying to accomplish," he says. Hood also warns that it can be easy to get tripped up by terminology. "I've heard customers talk about a bill of lading when they were really talking about an order," he says.
2. Match the provider to the need. Once the business case is nailed down, it's time to move on to vendor selection—a process that requires great care. Hood urges customers to observe the TMS in action either through demos or at other customer sites. "Make sure you see it," he says.
He also recommends including operations personnel in the planning and decision-making process. Those are the people who have to put a TMS to work. But too often, he says, they are not included until after the decision is made.
Hood says that customers should meet with the vendor in what he calls business design sessions that lay out precisely what the system will provide—and help to avoid "scope creep," a reference to changes and additions made after the business case has been developed and approved.
3. Manage the change. The implementation itself demands executive support and sufficient training. "A few things are just obvious," says Joel Hagle, vice president of IT solutions design for Transplace, a firm that provides logistics technology and transportation management services. "You need good project management. You need to operate to a plan. You need to have a test plan that is comprehensive enough. You need to test each process individually. That testing is important."
Banker stresses the necessity of sufficient training. "You need to set aside time for lots of training," he says. Hood adds that training should take place as close to the go-live date as possible. "You don't want to train people a month ahead. They'll forget what they learned," he says.
Attention to change management is all the more important in cases where the organization is undergoing some restructuring at the time of the TMS installation—generally, a shift from decentralized to centralized transportation management. With a TMS, the biggest savings opportunities come in a centralized operation, Banker explains. "You are not going to get the same payback if you have, say, 10 factories and you still have transportation planners optimizing orders for each factory. When you are planning for all the factories, you can make yourself more interesting to carriers, and you can get price breaks and more optimization opportunities."
Although centralization will result in better payback, it's also likely to create some short-term disruption, Banker says. "You have to say to your planners, 'We're going to do it here. Are you willing to move?' You might not need as many. And people who have been doing it by phone might not have the right skills to go from a manual operation to a TMS."
In any event, Hagle says preparing employees for the change is critical. "The customer needs to get in front of that early on. You want to talk to the people on the dock. If no one talks to them first, they are going to get scared." And, no doubt, a major implementation will affect some jobs. "Some of that has to happen," he says. "Change management is difficult."
The change process must also include those in the business affected by transportation decisions even if they are not directly involved—such as sales and marketing or customer service.
4. Take it one step at a time. Hood urges establishing a go-live target date early in the implementation process and sticking to it. But that's not to say the switchover necessarily has to be completed that day. Hagle says most customers do not do a "big bang" switch to a new system. "You might go live with one or two or three vendors. You roll it out in chunks, and each chunk has a cutover plan."
Hood says that if the customer is switching from an existing TMS, it often makes sense for the new and old systems to run in parallel for a few weeks.
What it comes down to, then, is careful planning, selection of a system that meets well-defined requirements, appropriate training and preparation, and a measured rollout. But what might be most important is to ensure that everyone affected by the system—from executive management through sales and marketing, to transportation planners, to those on the dock—is on board and committed to making it all work.
When it comes to logistics technology, the pace of innovation has never been faster. In recent years, the market has been inundated by waves of cool new tech tools, all promising to help users enhance their operations and cope with today’s myriad supply chain challenges.
But that ever-expanding array of offerings can make it difficult to separate the wheat from the chaff—technology that’s the real deal versus technology that’s just “vaporware,” meaning products that don’t live up to their hype and may even still be in the conceptual stage.
One way to cut through the confusion is to check out the entries for the “3 V’s of Supply Chain Innovation Awards,” an annual competition held by the Council of Supply Chain Management Professionals (CSCMP). This competition, which is hosted by DC Velocity’s sister publication, Supply Chain Xchange, and supply chain visionary and 3 V’s framework creator Art Mesher, recognizes companies that have parlayed the 3 V’s—“embracing variability, harnessing visibility, and competing with velocity”—into business success and advanced the practice of supply chain management. Awards are presented in two categories: the “Business Innovation Award,” which recognizes more established businesses, and the “Best Overall Innovative Startup/Early Stage Award,” which recognizes newer companies.
The judging for this year’s competition—the second annual contest—took place at CSCMP’s EDGE Supply Chain Conference & Exhibition in September, where the three finalists for each award presented their innovations via a fast-paced “elevator pitch.” (To watch a video of the presentations, visit the Supply Chain Xchange website.)
What follows is a brief look at the six companies that made the competition’s final round and the latest updates on their achievements:
Arkestro: This San Francisco-based firm offers a predictive procurement orchestration solution that uses machine learning (ML) and behavioral science to revolutionize sourcing, eliminating the need for outdated manual tools like pivot tables and for labor-intensive negotiations. Instead, procurement teams can process quotes and secure optimal supplier agreements at a speed and accuracy that would be impossible to achieve manually, the firm says.
The company recently joined the Amazon Web Services (AWS) Partner Network (APN), which it says will help it reach its goal of elevating procurement from a cost center to a strategic growth engine.
AutoScheduler.AI: This Austin, Texas-based company offers a predictive warehouse optimization platform that integrates with a user’s existing warehouse management system (WMS) and “accelerates” its ability to resolve problems like dock schedule conflicts, inefficient workforce allocation, poor on-time/in-full (OTIF) performance, and excessive intra-campus moves.
“We’re here to make the warehouse sexy,” the firm says on its website. “With our deep background in building machine learning solutions, everything delivered by the AutoScheduler team is designed to provide value by learning your challenges, environment, and best practices.” Privately funded up until this summer, the company recently secured venture capital funding that it will use to accelerate its growth and enhance its technologies.
Davinci Micro Fulfillment: Located in Bound Brook, New Jersey, Davinci operates a “microfulfillment as a service” platform that helps users expedite inventory turnover while reducing operating expenses by leveraging what it calls the “4 Ps of global distribution”—product, placement, price, and promotion. The firm operates a network of microfulfillment centers across the U.S., offering services that include front-end merchandising and network optimization.
Within the past year, the company raised seed funding to help enhance its technology capabilities.
Flying Ship: Headquartered in Leesburg, Virginia, Flying Ship has designed an unmanned, low-flying “ground-effect maritime craft” that moves freight over the ocean in coastal regions. Although the Flying Ship looks like a small aircraft or large drone, it is classified as a maritime vessel because it does not leave the air cushion over the waves, similar to a hovercraft.
The first-generation models are 30 feet long, electrically powered, and semi-autonomous. They can dock at existing marinas, beaches, and boat ramps to deliver goods, providing service that the company describes as faster than boats and cheaper than air. The firm says the next-generation models will be fully autonomous.
Flying Ship, which was honored with the Best Overall Startup Award in this year’s 3 V’s competition, is currently preparing to fly demo missions with the Air Force Research Laboratory (AFRL).
Perfect Planner: Based in Alpharetta, Georgia, Perfect Planner operates a cloud-based platform that’s designed to streamline the material planning and replenishment process. The technology collects, organizes, and analyzes data from a business’s material requirements planning (MRP) system to create daily “to-do lists” for material planners/buyers, with the “to-dos” ranked in order of criticality. The solution also uses advanced analytics to “understand” and address inventory shortages and surpluses.
Perfect Planner was honored with the Business Innovation Award in this year’s 3 V’s competition.
ProvisionAi: Located in Franklin, Tennessee, ProvisionAi has developed load optimization software that helps consumer packaged goods (CPG) companies move their freight with fewer trucks, thereby cutting their transportation costs. The firm says its flagship offering is an automatic order optimization (AutoO2) system that bolts onto a company’s existing enterprise resource planning (ERP) or WMS platform and guides larger orders through execution, ensuring that what is planned is actually loaded on the truck. The firm’s CEO and founder, Tom Moore, was recognized as a 2024 Rainmaker by this magazine.
Global forklift sales have slumped in 2024, falling short of initial forecasts as a result of the struggling economy in Europe and the slow release of project funding in the U.S., a report from market analyst firm Interact Analysis says.
In response, the London-based firm has reduced its shipment forecast for the year to rise just 0.3%, although it still predicts consistent growth of around 4-5% out to 2034.
The “bleak” figures come as the European economy has stagnated during the second half of 2024, with two of the leading industry sectors for forklifts - automotive and logistics – struggling. In addition, order backlogs from the pandemic have now been absorbed, so order volumes for the global forklift market will be slightly lower than shipment volumes over the next few years, Interact Analysis said.
On a more positive note, 3 million forklifts are forecast to be shipped per year by 2031 as enterprises are forced to reduce their dependence on manual labor. Interact Analysis has observed that major forklift OEMs are continuing with their long-term expansion plans, while other manufacturers that are affected by demand fluctuations are much more cautious with spending on automation projects.
At the same time, the forklift market is seeing a fundamental shift in power sources, with demand for Li-ion battery-powered forklifts showing a growth rate of over 10% while internal combustion engine (ICE) demand shrank by 1% and lead-acid battery-powered forklift fell 7%.
And according to Interact Analysis, those trends will continue, with the report predicting that ICE annual market demand will shrink over 20% from 670,000 units in 2024 to a projected 500,000 units by 2034. And by 2034, Interact Analysis predicts 81% of fully electric forklifts will be powered by li-ion batteries.
The reasons driving that shift include a move in Europe to cleaner alternatives to comply with environmental policies, and a swing in the primary customer base for forklifts from manufacturing to logistics and warehousing, due to the rise of e-commerce. Electric forklift demand is also growing in emerging markets, but for different reasons—labor costs are creating a growing need for automation in factories, especially in China, India, and Eastern Europe. And since lithium-ion battery production is primarily based in Asia, the average cost of equipping forklifts with li-ion batteries is much lower than the rest of the world.
Companies in every sector are converting assets from fossil fuel to electric power in their push to reach net-zero energy targets and to reduce costs along the way, but to truly accelerate those efforts, they also need to improve electric energy efficiency, according to a study from technology consulting firm ABI Research.
In fact, boosting that efficiency could contribute fully 25% of the emissions reductions needed to reach net zero. And the pursuit of that goal will drive aggregated global investments in energy efficiency technologies to grow from $106 Billion in 2024 to $153 Billion in 2030, ABI said today in a report titled “The Role of Energy Efficiency in Reaching Net Zero Targets for Enterprises and Industries.”
ABI’s report divided the range of energy-efficiency-enhancing technologies and equipment into three industrial categories:
Commercial Buildings – Network Lighting Control (NLC) and occupancy sensing for automated lighting and heating; Artificial Intelligence (AI)-based energy management; heat-pumps and energy-efficient HVAC equipment; insulation technologies
Manufacturing Plants – Energy digital twins, factory automation, manufacturing process design and optimization software (PLM, MES, simulation); Electric Arc Furnaces (EAFs); energy efficient electric motors (compressors, fans, pumps)
“Both the International Energy Agency (IEA) and the United Nations Climate Change Conference (COP) continue to insist on the importance of energy efficiency,” Dominique Bonte, VP of End Markets and Verticals at ABI Research, said in a release. “At COP 29 in Dubai, it was agreed to commit to collectively double the global average annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030, following recommendations from the IEA. This complements the EU’s Energy Efficiency First (EE1) Framework and the U.S. 2022 Inflation Reduction Act in which US$86 billion was earmarked for energy efficiency actions.”
Many AI deployments are getting stuck in the planning stages due to a lack of AI skills, governance issues, and insufficient resources, leading 61% of global businesses to scale back their AI investments, according to a study from the analytics and AI provider Qlik.
Philadelphia-based Qlik found a disconnect in the market where 88% of senior decision makers say they feel AI is absolutely essential or very important to achieving success. Despite that support, multiple factors are slowing down or totally blocking those AI projects: a lack of skills to develop AI [23%] or to roll out AI once it’s developed [22%], data governance challenges [23%], budget constraints [21%], and a lack of trusted data for AI to work with [21%].
The numbers come from a survey of 4,200 C-Suite executives and AI decision makers, revealing what is hindering AI progress globally and how to overcome these barriers.
Respondents also said that many stakeholders lack trust in AI technology generally, which holds those projects back. Over a third [37%] of AI decision makers say their senior managers lack trust in AI, 42% feel less senior employees don’t trust the technology., and a fifth [21%] believe their customers don’t trust AI either.
“Business leaders know the value of AI, but they face a multitude of barriers that prevent them from moving from proof of concept to value creating deployment of the technology,” James Fisher, Chief Strategy Officer at Qlik, said in a release. “The first step to creating an AI strategy is to identify a clear use case, with defined goals and measures of success, and use this to identify the skills, resources and data needed to support it at scale. In doing so you start to build trust and win management buy-in to help you succeed.”
Many chief supply chain officers (CSCOs) are focused on reorganizing their supply chains in today’s business climate—but as they do so, they should be careful to avoid common pitfalls that can derail their efforts.
That’s according to recent research from Gartner that identifies critical organizational design mistakes that will prevent supply chain leaders from delivering on business goals.
“Supply chain reorganization is high up on CSCOs’ agendas, yet many are unclear about how organization design outcomes link to business goals,” according to Alan O'Keeffe, senior director analyst in Gartner’s Supply Chain practice.
The research revealed that the most successful projects radically redesign supply chain structure based on distinct organizational needs “while prioritizing balance, strength, and speed as key business objectives.”
“Our findings reveal that the leaders who achieved success took a more radical approach to redesigning their supply chain organizations, resulting in the ability to deliver on new and transformational operating models,” O’Keefe said in a statement announcing the findings.
The research was based on a series of interviews with supply chain leaders as well as data gathered from Gartner clients. It revealed that successful organizations assigned responsibilities to reporting lines in radically diverse ways, and that they focused on the unique characteristics of their business to design supply chain organizations that were tailored to meet their needs.
“The commonality between successful organizations is that their leaders intentionally prioritized the organizational goals of balance, strength and speed into their design process,” said O’Keeffe. “In doing so, they sidestepped the most common pitfalls in supply chain reorganization design.”
The three most common errors, according to Gartner, are:
Mistake 1: The “either/or” approach
Unbalanced organizational structures result in delays, gaps in performance, and confusion about responsibility. This often stems from a binary choice between centralized and decentralized models. Such an approach limits design possibilities and can lead to organizational power struggles, with teams feeling overwhelmed and misaligned.
Successful CSCOs recognize balance as a critical outcome. They employ both integration (combining activities under one team structure) and differentiation (empowering multiple units to conduct activities in unique ways). This granular approach ensures that decisions, expertise, and resources are allocated optimally to serve diverse customer needs while maintaining internally coherent operating models.
Mistake 2: Debilitating headcount reduction
Reducing headcount as a primary goal of reorganization can undermine long-term organizational capability. This approach often leads to a focus on short-term cost savings at the expense of losing critical talent and expertise, which are essential for driving future success.
Instead, CSCOs should focus on understanding what capabilities will make the organization strong in the short, medium, and long term. They should also prioritize the development and leveraging of people capabilities, social networks, and autonomy. This approach not only enhances organizational effectiveness but also ensures that the organization is ready to meet future challenges.
Mistake 3: The copy/paste approach
Copying organizational designs from other companies without considering enterprise-specific variations can slow decision-making and hinder organizational effectiveness. Each organization has unique characteristics that must be factored into its design.
CSCOs who successfully redesign their organizations make speed an explicit outcome by assigning and clarifying authority and expertise to remove elements that slow decision-making speed. This involves:
Designing structures that enable rapid response to customer needs;
Streamlining internal decision-making processes;
And differentiating between operational execution and transformation efforts.
The research for the report was based in part on qualitative interviews conducted between February and June 2024 with supply chain leaders from organizations that had undergone organizational redesign, according to Gartner. Insights were drawn from those who had successfully completed a radical reorganization, defined as a shift that enabled organizations to deliver on new activities and operating models that better met the needs of the business. The researchers also drew on more than 1,200 inquiries with clients conducted between July 2022 and June 2024 for the report.