# Fulfillment Management TMS Buyers’ Guide ## Introduction The world of fulfillment solutions is vast, with many end to end solutions and point solutions. Keywords like Warehouse Management System (WMS), Transportation Management System (TMS), shipping, wave picking, audit, multi-carrier rating, dimensioners, are frequently thrown around by solution providers but often confuse a company looking at investing in improving the speed, accuracy and costs of their fulfillment process. In this guide we’ll focus on one main component of a fulfillment process: a Transportation Management System (TMS). In addition to TMS, the other major component of fulfillment management solutions is focused on the efficient storage and movement of products in a warehouse, a Warehouse Management System (WMS). Though there are many other related concepts and point solutions, these two solutions, whether leveraged together or independently, are the heart of all fulfillment goals: getting more orders out of the warehouse with greater accuracy and less labor. ## Table of Contents **1. How to Involve Key Stakeholders** **2. Understanding Your Business Needs** **3. Essential Metric and KPI Considerations** - Essential Metrics - Essential KPIs - Key Considerations When Buying a TMS **4. How to Select a Vendor** **5. Features and Functionalities that Matter** **6. How to Prepare for Implementation** **7. Pitfalls and Mistakes to Avoid** ## TMS Buyers’ Guide In the rapidly evolving landscape of logistics, TMS—a Transportation Management System, also known as advanced shipping software, has become a pivotal tool for transforming the approach to shipping and supply chain operations. Extending beyond basic logistics management to provide a comprehensive suite of advanced features, a TMS offers an expansive, rather than pin-pointed logistics solution. Within this guide, we show the pivotal role that a TMS plays in optimizing transportation processes. As businesses navigate the complexities of the market, investing in a TMS becomes imperative for achieving efficiency, cost-effectiveness, and strategic decision-making. In order to figure out which TMS is right for you, it is essential to grasp the unique features of your order workflow—taking into account factors such as the nature of shipped products, staffing details, roles, packaging procedures, shipment processes, and visibility criteria maintained by both the shipper and admin—in order to know how and where you want to improve it. One of the first steps in evaluating your own company’s processes and flows is to make sure that the right people are at the table. ## How to Involve Key Stakeholders In the process of buying a TMS, involving key stakeholders is crucial for a successful and effective buying process. The engagement of the right individuals and the timely inclusion of essential perspectives can significantly impact the decision-making and implementation phases. ### Key Recommendations: #### Identifying the Right People: The success of the TMS buying process depends on involving individuals who bring the right expertise and perspectives. #### Avoiding Overcrowded Meetings: When there are too many participants (e.g., 10 people) on an evaluation of a solution, the efficiency of the discussion may suffer. --- ## Documenting Requirements and Features: Documenting the top 10 requirements and features is a proactive step to guide and structure discussions during the buying process. This documentation serves as a reference point, ensuring that key considerations are addressed systematically. ## Early Leadership Involvement: Delaying the inclusion of leadership (operations and technical) in the buying process can lead to wasted time and repeated efforts. ## Early Operations Involvement: Some customers make the mistake of not involving their operations team until a week before going live. Timely involvement of operations in the buying process is essential to address operational requirements and avoid last-minute challenges during implementation. ## Understanding Your Business Needs The journey towards finding the right TMS involves recognizing the unique needs of your business. It's important to acknowledge that a one-size-fits-all solution may not be the most optimal choice, especially given the varied interpretations of a TMS among different providers. Discovering the right TMS necessitates a thorough understanding of your business needs, for factors such as customization, scalability, integration, usability, cost, and vendor support. --- # Essential Metric and KPI Considerations When considering TMS options, it's essential to focus on relevant metrics and Key Performance Indicators (KPIs) that align with your business goals. ## Essential Metrics: ### Availability of Warehouse Workers: - How many warehouse workers are on the floor? - What is the potential impact if a key person responsible for a crucial role calls out sick? - How might the implementation of this TMS influence both your team dynamics and the efficiency of the hiring/training process? ### Seasonal Fluctuations in Order Volumes: - Can this TMS solution handle seasonal changes in order volumes? - What does onboarding time look like for new employees? ### SLA Adherence: - Monitor Service Level Agreement (SLA) adherence to meet customer expectations regarding order processing and delivery times. ### Packing Efficiency: - Evaluate the efficiency of the packing process by analyzing packing time per order, number of mis-ships or amount of wasted space/materials. ### Current Operational Practices: - Assess existing workflows, understand how tasks are performed today, and identify areas for improvement. - What is the order throughput per worker? ### Order Processing Times: - What is the life cycle of an order? - Determine how much time it takes to process an order. --- ## Essential KPIs: ### Before and After - Order Throughput: - **Before Order Throughput:** Measures the rate at which orders were processed before implementing changes. - **After Order Throughput:** Total Orders Processed/Time Period. ### Before and After Labor Costs for Fulfilling Orders: - **Before Labor Costs:** Assesses the total labor expenses associated with order fulfillment before any changes. - **After Labor Costs:** Assesses the total labor expenses associated with order fulfillment after implementing changes. ### Before and After Orders Shipped Within SLA: - **Before Orders Shipped Within SLA:** Measures the percentage of orders shipped within the agreed-upon SLA before changes. - **After Orders Shipped Within SLA:** Formula: (Number of Orders Shipped Within SLA/Total Number of Orders) * 100 ### Before and After Shipping Costs: - **Before Shipping Costs:** Evaluates the overall costs associated with shipping before any changes. - **After Shipping Costs:** Evaluates the overall costs associated with shipping after implementing changes. ### Before and After Materials Costs: - **Before Materials Costs:** Assesses the overall expenses related to materials used in the fulfillment process before changes. - **After Materials Costs:** Assesses the overall expenses related to materials used in the fulfillment process after changes. Monitoring these KPIs before and after implementing changes provides valuable insights into the effectiveness of process improvements, cost optimizations, and overall supply chain enhancements. Many buyers, unfortunately, dive into the process without a comprehensive understanding of their own operational benchmarks. --- ## Key Considerations When Buying a TMS ### Problem Solving Objectives: Clearly define the challenges or inefficiencies that the TMS will solve. Outline specific problem areas such as delayed shipments, manual processes, or lack of visibility. This list should be created by all stakeholders involved in fulfillment operations. ### Targeted Metrics for Improvement: Identify the KPIs that the organization seeks to improve. ### Legacy or Modern Software: Evaluate the advantages of a TMS built on modern technology or based on legacy systems. ### Scalability: Assess the scalability of the TMS beyond just adding more features. ### Workforce Efficiency: Consider how the TMS contributes to reducing the reliance on hiring additional personnel. ### Consistent Performance and Uptime: Prioritize a TMS with a track record of consistent performance and high uptime. ### Customer Support Commitment: Evaluate the vendor's commitment to customer support. ### Onboarding Timeframes: Assess the expected onboarding times for implementing the TMS. --- ## Customer References: Seek and review customer references to gain insights into the experiences of other organizations with the TMS. ## Total Cost of Ownership (TCO): Calculate the total cost of ownership, considering not only the initial investment but also ongoing maintenance, upgrades, and any hidden costs. ## How to Select a Vendor Selecting the right vendor is a critical decision that can significantly impact operational efficiency and long-term success. --- ## Cost Considerations and Effective Management: Delving into the financial aspects, it's crucial to carefully examine the cost considerations associated with both the purchase and implementation of a TMS. ## Scalability for Future Growth: This aspect ensures that the chosen TMS can adapt and expand along with the evolving needs of your business. ## Unification of Systems: This underscores the importance of seamlessly integrating various systems. ## Challenging Vendors for Transparency: Buyers are urged to pose essential challenges to vendors. ## Cloud-Based Solutions for Efficiency: Exploring the benefits of a cloud-based solution adds another layer of consideration. --- ## Overlooking Training Time: In the comprehensive approach to TMS vendor selection, one often-overlooked element is the significance of training time. ## Features and Functionalities that Matter Make sure that you and your team don't rush through the solution consulting stage, but instead dive deeper to discern if a feature aligns with both your functional and available requirements. ## Key TMS Features ### High Level Features - **Integration:** Ability to integrate with shipping carriers (parcel and LTL), WMS, ERPs and shopping carts. - **Visualization:** Insightful visualized real-time analytics. - **Channelization:** Support for various omnichannel workflows’ diverse order profiles and sales channels. - **Flexibility:** Ability to rate parcel and LTL orders at the same time for the same order. - **Globalization:** Support for cross-border options to expedite customs. - **Ease of Use:** Intuitive navigability means minimal training. - **Access:** Works on any browser/device. --- ### Specific Features - Domestic US Parcel - Domestic US LTL Freight - Global Parcel - In-Cart Rate Shopping - Address Validation - Item Pack/Scan Verification - Standard Reporting and Analytics - Integrated Weight/Scale Support - Integrated Dimensioner Support - Configurable Shipping/Business Rules - Virtual/Drop Ship Warehouses - Blind shipping (alternate return addresses) - Advanced Auto Printing - External Shipments - Batch Processing - Serialized/Lotted Inventory - Ready to Ship mode - Return Labels - Reference Number Mapping for Carriers - Custom Reporting and Analytics ## How to Prepare for Implementation The TMS implementation process is a critical phase that demands a well-defined plan and active engagement of key stakeholders. To ensure a seamless transition and avoid common pitfalls, it is imperative to emphasize best practices. ### Best Practices: #### Timing Considerations Caution should be exercised against choosing busy periods or peak seasons for implementation. ## Support Collaboration Buying a TMS is not merely a transaction; it should be viewed as a partnership. ### Key Questions to Ask: To ascertain the level of support and partnership offered by the TMS provider, consider asking the following key questions: - Does your support have an endpoint? - Do you provide lifetime Account Managers? ## Pitfalls and Mistakes to Avoid ### Common Pitfalls and Mistakes: - Insufficient Needs Assessment. - Ignoring Scalability. - Lack of Integration Planning. - Inadequate Training and Change Management. - Ignoring User-Friendliness. - Underestimating Implementation Time and Costs. - Overlooking Vendor Support and Updates. - Neglecting Future Technology Trends. - Inadequate Security Measures. - Failure to Plan for Customization. --- ## ShipHawk To learn more about this guide or about ShipHawk TMS, contact us.