On Episode 20 of The Future of Supply Chain, we spoke with Eric Rempel of Redwood Logistics to discuss transportation management systems and where the industry is heading. Based in Chicago, Eric and his team at Redwood are focused on solving any issues that logistics professionals may face. Their technology coupled alongside market expertise has set Redwood apart as one of the most influential third party logistics companies. Eric did not start out in logistics, however. His background was originally in Computer Engineering and Mathematics. He would then take the knowledge he had learned in these fields and apply it to building a new TMS for Redwood, when he was brought on in 2001. To Eric, brokerage and logistics were just one giant optimization problem waiting to be solved, and he wanted to discover more innovative ways to solve these supply chain problems.

Culture Breeds Innovation

Maintaining innovation at a long-standing 3PL can be tough. Employees can easily fall victim to the status quo, or feel as if their perspective will not be heard when deciding where the platform should head. Eric believes that culture is a big factor of what leads or hinders innovation. Companies must look for ways to encourage feedback and promote organic idea generation. Employees must be able to say what excites or scares them, and share how we can create value for customers. “Innovation can be implementing machine learning to solve a complex problem, or it could simply be a second phone on an employee’s desk,” believes Eric. Meaning, innovation doesn’t need to only be disruptive, it can be incremental as well.

Key Components of a TMS

Given that Eric is an expert in designing and fleshing out transportation management systems, we asked if he could break these systems down into layman’s terms. Eric said the best way to look at TMS was, “Does this work for the shipper, broker, and carrier?” The five main modules of a TMS are: planning, execution, management, settlement, and reporting.

Making TMS 10x Better

In their early days, TMS’ were used by a few main players and were harder and more expensive to implement. However, this is not the case anymore, as the market has evolved into something much more user-friendly. There are now hundreds of TMS companies vying for your business, which makes these systems more approachable for smaller operations. Now you can purchase and setup a new system with a credit card, which is game changing for such a heavily-fragmented industry. While these new streamlined systems are much easier than their early iterations, there are some ways to make them 10x better. Eric believes the next evolutionary step is to make sure future systems are flexible and are capable of easily integrating with existing and adjacent systems. Such systems will operate within a company’s operational needs, automate significant workflows, and elevate people to more value-add roles and make decisions by exception.