The value of Collaborative transportation management (CTM): Its relationship to CPFR and information technology

Abstract

This paper describes a relatively new development in Collaborative Planning, Forecasting and Replenishment (CPFR), known as Collaborative Transportation Management (CTM). It expedites the conversion of order forecasts into forecasts of shipments and uses collaborative systems to make sure they are fulfilled. This article focuses on the role that information technology plays in CTM. It also addresses the subjective and quantifiable benefits of CTM's use of information technology. A case study is used to explore the benefits of CTM from the experiences of a third-party CTM systems provider. Includes examples of some advantages derived from CTM: elimination of excessive backhauls and dwell times; reduction of unpaid empty miles; higher on-time performance; identifying location of freight in supply chain; and improved fully loaded miles, oh-shelf performance and order quantity. Future research is needed for a more rigorous investigation to develop models that will quantify CTM benefits more precisely. Also needed is more empirical study of linkages between CTM and CPFR.

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