New users of Web-based transportation management systems (TMS) can expect, on average, to achieve savings of 8 percent through operating efficiencies, according to a top transportation executive at tech giant Oracle Corp.
John Murphy, senior director, transportation and logistics, said studies show that 42 percent of new TMS users can shave costs by between 6 and 10 percent, putting the median savings at 8 percent.
According to Oracle market share data, the TMS market is fragmented. Murphy says his company controls 20 percent of the TMS market, the largest share of any one company. However, the category of "all others" controls 43 percent of the TMS r market, according to Oracle data.
Murphy's presentation focused on the pros and cons of outsourcing transportation functions to a third-party logistics service company as opposed to managing the process internally through a TMS. Murphy said both options offer value, and that there is no right or wrong approach. "It very much depends on your business," he said.
Murphy cited networking giant Cisco Systems Inc. as an example of a company that has adopted a kind of hybrid approach. While Cisco kept its network of 3PLs, it also brought in a TMS that it operated through its third-party partners, Murphy said.