What Is an Order-Centric TMS?

Posted by Buck Devashish on Oct 1, 2019 7:11:28 AM

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order-centric-tms-mpo-bannerThe supply chain is always evolving, but since the advent of the Internet, its transformation has been unique, its challenges unprecedented. With e-commerce came greater market demands and competitive pressures. And as businesses adapted to these new realities, expanding their reach abroad and forming multi-enterprise networks, they found that managing these new opportunities introduced its own set of unprecedented challenges and complexities.

While the industry has coped so far by slowly modernizing and upgrading the various components of the old Transportation Management System (TMS) framework, we have reached a point in which this framework is no longer viable. By continuing to maintain it, businesses risk stagnating future progress. The Order-Centric TMS was built for the modern supply chain; it moves beyond the conventional model to provide unprecedented levels of flexibility and dynamism.

What is the old framework?

Transportation Management Systems have historically been stand-alone units. They work alongside Order Management Systems (OMS), which group orders and then transfer them to the TMS in batches to process and execute shipments. If you ask “why?” the answer is simply that, back then, this was the most effective way to implement the process. In other words, there was no technology to integrate and optimize the system otherwise. For a long time, there wasn’t much incentive to rethink this siloed approach.

order-centric-tms-mpo-body1Legacy frameworks are “shipment-centric” and “batch-oriented” in that they focus only on executing shipments for the batches of orders they receive. Such fundamental restrictions and parameters limit systems and require additional software to communicate between units to expand functionality. The irony is that despite the fact that technology exists today to render the TMS independent and comprehensively functional, we continue to manufacture systems that perennially require crutches.

What has changed?

As companies continue to expand their operations, go global, and attempt to orchestrate across multi-enterprise business networks, this siloed approach will be less and less sustainable. The legacy framework is unnecessarily rigid and limits visibility. When information and processes are split between two systems, the setup inhibits intelligent planning and opportunities to optimize and collaborate with partners.

Many businesses, having recognized the issue, end up investing in various software to bridge the gap between the two systems. Yet, each new layer risks over-complicating the process, potentially introducing more hiccups and inconsistencies. Why have several disparate components when the technology exists to just create one efficient solution?

What is the order-centric framework?

Order-centric TMSs integrate sales order and purchase order management into the process of transportation management to maximize efficiency, configurability, and flexibility. Because the system “centers” on orders rather than solely dispatching shipments, it takes a holistic view of the supply chain.

order-centric-tms-mpo-body2The order-centric TMS applies information and rules about inventory, sourcing, and replenishment to make smarter planning and execution decisions when decomposing orders into shipments. It uses API-based integration and treats shipments as one aspect of a greater ecosystem, so users gain actionable insight into complementary processes and information – for instance, timely alerts enable proactive responses to issues or allow you to merge a repair or refurbishment step along the way.

What makes it native to the modern supply chain?

The modern supply chain is defined by constant change. Product lifecycles are diminishing; globalization is escalating uncertainty with exposure to environmental, structural, and political disruptions; supply chain networking is increasingly dynamic, as companies must continuously remodel their partnerships to sustain evolving market and delivery demands. In this new reality, optimization can no longer rely on the slow, methodical perfection of static modeling. In a world defined by constant change and uncertainty, optimization is earned through adaptability – and therefore flexibility, agility, and dynamism.

The order-centric TMS is highly configurable for flexibility. When changes to partners, needs, or context call for new parameters, updated rules allow the system to immediately adapt. When issues or obstacles are met along the way, real-time communication and alerts offer agility and immediate course correction. And, because of its comprehensive overview of both the individual order as well as the end-to-end supply chain, businesses can effectively orchestrate orders across their networks while also addressing details on a granular level.

 

Perhaps above all else, what makes an order-centric TMS ideal for today and tomorrow’s supply chain, is that it needn’t collect layer upon layer of systems and software to compensate for what it lacks – whether it’s a missing mode or leg or geographical capability. When a system isn’t natively designed for this emerging future, every new application exposes its lack and also forms a new silo to accommodate yet another capability the system wasn’t designed for. Moreover, because silos are inherently rigid, they end up limiting even most of the new, cloud-based TMSs that continue to employ such restrictive frameworks.

The order-centric TMS is the product of the supply chain’s natural and ongoing evolution. It doesn’t need ancillary parts to help it survive the latest challenges, it is largely autonomous. As a natively designed solution, the order-centric TMS’s strength is to not only accommodate new ventures, but to also facilitate innovation through a dynamic network. It is designed to make businesses masters of constant change, so they can begin to carve out their space in the future rather than fighting not to drown in the present.

 

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Topics: Transport Management Systems, Supply Chain Execution, Supply Chain Optimization, Order-Centric, Order-Centric TMS

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