Parcel TMS Maturity
How Mature do you need your Parcel TMS Rate Shopping System to be? (Part Two)
In part one we explored, “What level of maturity do you need?”. In this second part of the two-part series we will explore, “Is your current PTMS mature enough?”
In Part One, we covered key questions a shipper should answer to determine the maturity required of their Parcel TMS per Gartner’s bi-annual Market Guide for Multicarrier Parcel Management Solutions and ScanData’s version of the PTMS Maturity Model (see Figure 1).
Figure 1: ScanData’s PTMS Maturity Model
As the reader answered each question, the associated Stage required of the shipper was revealed. Figure 2 below acts as a summary of these questions and the associated stage recommendation. An answer of “Yes” for any question drives the customer to the stage that can deliver that feature.
Figure 2: Question to Stage Map
Stage 1 PTMS Maturity
Stage 1 Maturity systems typically provide the most basic of services, rating, and labels for a single carrier, from a single location. Generally, these systems are not integrated with a WMS or OMS and certainly not Material Handling equipment. The shipper is required to enter (often manually) the origin, destination, weight, dimensions, and ship method required. The output is a label and carrier notification (maybe). These systems are NOT multi-carrier rate shopping, but may respond with rates from multiple carriers for the user to manually select from. Typically, these systems are used in low-volume situations often with one (or at least very few) carriers.
Stage 2 PTMS Maturity
Stage 2 PTMS systems add the ability to ship and rate shop across multiple carriers and ship methods, but are not typically able to rate shop across DCs or Ship Points. They can leverage carrier time-in-transit (TNT) tables, Commercial versus Residential look-ups, and Hazmat flags to rate shop across multiple carriers based upon customer Needs-By dates. These systems are typically used in moderate volume shippers with 1-3 DC/Ship Points.
Stage 3 PTMS Maturity
Stage 3 PTMS systems add the ability to rate shop across DCs, stores, 3PLs, and drop shipping options in a multi-carrier manner. Often, they can handle Needs-On in addition to Needs-By delivery date promises. In addition, these systems have more time awareness including carrier/ Ship Method cut-times and more complicated holiday TNT calculations. This stage also adds the ability to handle multiple sets of rate shopping like fastest, cheapest, specific carriers, etc., along with Zone Skipping features. These systems are typically used by high-volume shippers with a Supply Chain Network that includes ship-from-store, a drop-shipping/manufacturer shipping network, and 3PL ship points.
Stage 4 PTMS Maturity
Stage 4 PTMS are currently the most advanced on the market and often integrate deeply with the OMS, WMS, and eCommerce systems. The PTMS regularly engages with the OMS to handle future shipment optimization. In addition, for perishable items, temperature is taken into account to influence packaging and ship method/service selection. Extreme weather (hurricanes and wildfire) are handled via service blocks to avoid spoilage, shrinkage, and missed urgent deliveries. Often carrier-provided TNTs are able to be altered based upon historical performance in order to reduce missed delivery commitments. These systems are used by those shippers that are most interested in exploring ways to save on shipping costs.
Stage 5 PTMS Maturity
Stage 5 PTMS are generally future state. While some PTMSs have several features, the ultimate vision would be full predictive analysis that would alter TNT based upon seasonality, weather, and other trends.
By now we hope you agree that not all shippers have the same needs despite what “best practices” may say, and not all PTMSs deliver the same level of sophistication. While your current needs may drive you to a Stage 2 or 3 PTMS, think about where you want to be tomorrow ‒ there are savings to be captured as you move up the maturity matrix. While you may not want to take advantage of all of the features today, you don’t want to have to redeploy a new system in a few years as you look to capture new savings that drive you to a higher stage product.
The summaries above can’t capture every unique need; reach out to us anytime if you are interested in talking through your situation to determine what level of functionality you should have in your toolbox today and in the future.
We also know that we are representing the voice of the shipper as we write this article. You may not agree with us 100% and that is ok…you are an expert and we'd love to speak with you to get your perspective.
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