Visibility has become an industry buzzword, however, it is still the critical global supply chain factor global firms face today. With that being said, It’s hard to think of a term that is more often misinterpreted than supply chain visibility. Not only do we have multiple definitions of global supply chain visibility, but we also lack any kind of cross-border agreement on how to define the components within supply chain visibility.
In the rapidly evolving global supply chain industry, there are plenty of visibility definitions, and multiple ways suggested to achieve, enhance, and manage in a global marketplace. it. In terms of technology and software, people primarily utilized a transportation management system (TMS) for their logistics visibility. Unfortunately, these firms have found that a TMS does not provide them the holistic visibility a global firm requires. This has led to a new technology solution, global supply chain visibility platforms.
Often, these two solutions are seen as interchangeable, but this is a serious misinterpretation. While a TMS can be an important component to supply chain visibility, it doesn’t provide complete transparency for every shipment and transaction, especially if those shipments weren’t booked through the given TMS. On the other hand, visibility platforms are designed to collect and consolidate data from all carriers (whether inbound, outbound, third-party shipments, etc.) from multiple, disparate carriers feed and software systems, to provide real-time visibility to harmonized data and a single version of supply chain truth.
To clearly understand the differences between visibility solutions, let’s define what the key functions and limitations are for each tool. Also, let’s take a closer look at how TMS and visibility platforms can work together and separately.
A Global Transportation Management System (TMS): Functions and Limitations
A transportation management system is a software solution that helps companies handle their freight operations. There are different types of TMS depending on a company’s needs and priorities, but usually, they include the following shipment processing and management functionality:
- Booking and managing shipments
- Rate management
- Cargo tracking
- Document management
- Carrier procurement
- Load planning & dock scheduling
- Transactions and payments management
Essentially, TMS is an important tool for shipping freight, but it doesn’t provide complete supply chain visibility. It is extremely rare for complex supply chains to have only one source for receiving and managing data. Multiple stakeholders and parties involved in the supply chain create a huge environment with disparate technologies and systems that require integration and data standardization.
While TMS is excellent for visibility into a company’s outbound shipments, it has many limitations when it comes to order and cost visibility, and for shipments and transactions that were not scheduled and executed through the TMS. According to McKinsey, nearly 50% of supply chain costs are hidden and unmanaged due to poor visibility in outbound, inbound and third-party operations.
A Supply Chain Visibility Platform: What Can It Do?
Supply chain visibility software provides a robust infrastructure for consolidating and integrating data from all supply chain sources. Visibility platforms enable businesses to tap into hidden opportunities from the volumes of real-time, accurately collected data from each supply chain stakeholder. Visibility software covers the existing areas of your supply chain and closes gaps and blind spots that other systems cannot identify, instead of just relying on shipments booked through a TMS.
Ultimately, supply chain visibility encompasses much more than moving a particular shipment from A to B and detecting where the truck/plane/ship is. The goal of supply chain visibility software is to provide transparency across every operation and transaction, through the integration of multiple data sources and systems. Typically, supply chain visibility platform functionality includes:
- Real-time shipment tracking beyond EDI status codes
- Multi-modal coverage
- In-depth analytics on pickup and delivery performance
- Integration with TMS, ERP, EDI, APIs, and other technology
- Data centralization and analytics for all transactions and operations
- Automatic alerts to proactively manage exceptions
A Final Verdict: TMS or Supply Chain Visibility Platform?
Both solutions have their unique benefits and contribute to a company’s supply chain efficiency. TMS is an integral tool for successfully managing day-to-day shipping operations. However, if an organization’s goal is not only to track the movement of individual outbound shipments through TMS but to have a big picture of their entire, holistic supply chain, then a realistic understanding of what’s happening at each stage, a visibility platform will provide a much better ROI on investment.
Thanks to cloud infrastructure and seamless integration capabilities, deploying a visibility platform like Agistix requires no IT resources to implement a solution. This SaaS-based solution lets you see results after just 4-6 weeks. Learn more about the sophisticated Agistix visibility software here!