By Lisa Henthorn, V.P., Corporate Communications
Aiming to cut their upfront transportation spend as freight costs continue to rise, companies globally are not only replacing their supply chain technologies sooner than they have in the past, but are also more likely to use a cloud-based transportation management system (TMS) rather than an on-premise solution, according to recent research from Gartner.
“Organizations will replace their supply chain technologies one to two years earlier than the historical average of 10 years through 2018,” Gartner reported in the 2014 update of its Forecast Overview: Supply Chain Management Worldwide, which is now available – compliments of Eyefreight – in our Freight-Spend Management newsletter.
The report continues: “This accelerated rate of replacement accompanies faster adoption of cloud-based supply-chain and transportation management systems (TMS).”
While the reasons are many for why cloud-based TMS solutions are gaining in popularity, the motivation that supply chain executives most often cite is visibility. More specifically, executives want greater visibility into all aspects of their freight management spend.
As the Gartner SCM Forecast Overview notes: “Businesses deploying SCE (supply chain execution) solutions are looking to achieve greater visibility into product movements, cost containment and compliance…At the same time, businesses need to be more in tune with customer demands, while managing fewer inventories on hand, and not sacrificing their commitments to deliver to their end customers.”
The report also finds that companies are increasingly tackling these and other challenges with solutions like Eyefreight’s cloud-based (TMS) that enable them to focus on their cost-of-distribution (CoD) and slash their net landed cost of goods by as much as 30 percent with technologies that automate communications and logistics.
Stay tuned. Gartner’s latest forecast overview on supply chain management worldwide is due for a 2015 update, and we can’t wait to share the details.