Untangling the Spaghetti: Why Logistics Companies Need a Target Operating Model

In the logistics world, processes often evolve like a bowl of spaghetti. One noodle for ocean freight, another for air freight, some tangled threads from legacy systems, and a generous sprinkling of workarounds. If you’re a decision-maker at a freight forwarding or 3PL company, you probably know this dish a little too well.

In our last blog, we debated whether to adapt your processes to the system or the system to your processes. Now, let’s take it a step further. Before deciding what to bend, let’s figure out what you actually want to build. Enter the Target Operating Model - aka TOM.

Source: Image generated by the author through AI generation with chat.openai.com

What Is a Target Operating Model (TOM)?

Put simply, a TOM is a practical blueprint of how you want your business to run. It includes how your teams are organized, how your processes flow, what systems support them, and how decisions get made. It’s not theory - it’s how you want operations to work in real life.

As some consultant put it, “A Target Operating Model defines the desired state of how a company delivers value, aligning people, processes, and technology to strategic goals.”

Think of TOM as your future state - designed not for perfection, but for clarity and consistency. Especially in logistics, that’s gold.

The Reality in Freight Forwarding: System Overload and Process Spaghetti

Many logistics companies are stuck with overlapping systems: one for warehouse, another for transport, a third for customs, and Excel tying it all together. Add region-specific processes and individual workarounds, and suddenly you have ten ways to book a shipment and zero ways to scale efficiently.

This chaos creates bottlenecks: training takes forever, updates are missed, customer experience suffers, and IT becomes the firefighter-in-chief.

Why You Need a TOM (Yes, You)

A solid Target Operating Model is your first step toward sanity. Here’s why it matters:

Clarity Across the Business - Everyone works from the same playbook, reducing the daily confusion of "how do we do this here?"
Smarter Tech Decisions - You’ll know which processes are truly unique (and need customization) and which ones can run on standard system features.
Consistent Customer Experience - From onboarding to invoicing, processes feel the same whether your customer works with your Hamburg branch or your Singapore one.
Scalable Growth - Hiring and expanding becomes easier when new teams don’t have to reinvent the wheel.

Common Pitfalls (and How to Dodge Them)

Even well-meaning TOM projects can go sideways. Here are a few traps to watch for:

The PowerPoint TOM - Beautiful slides, zero execution. If your TOM doesn’t make it into daily routines, it’s not a model - it’s wallpaper.
No Team Buy-In - If only HQ builds the model without asking ops, expect pushback. Involve your dispatchers, warehouse leads, and planners from day one.
Over-Engineering - A perfect model that nobody can follow is worse than an imperfect one that people actually use. Be realistic.

Real Examples of Value

Let’s break it down with examples:

Customer Onboarding - With a clear TOM, every new customer follows the same setup steps. No missed info, no delays, just a smooth start.
Carrier Allocation - Instead of going with who’s available or who someone knows, the team uses a rule-based decision that aligns with your strategy.
Shipment Tracking - You define one way of updating and communicating milestones. Customers always know what’s happening, and your team doesn’t have to dig through emails.

TOM First, System Second

We’ve seen too many companies buy software hoping it will fix their process issues. Spoiler: it won’t. Not without a plan.

Your TOM defines what you want your future processes to look like. That way, when choosing or configuring a TMS, WMS, or ERP, you’re selecting tools to support that vision - not bending your vision to match tool limitations.

KPMG said it well: “The absence of a clear Target Operating Model is a leading cause of digital transformation failure.”

The Bottom Line

A well-defined TOM helps:

Avoid unnecessary customization
Shorten implementation timelines
Improve system adoption
Keep costs in check

As one CIO told us, “The TOM saved our ERP project. Without it, we would’ve just digitized our mess.”

So, before your next big rollout or digital initiative, take a step back and ask: Do we know what we’re actually trying to build? If the answer is “kind of,” it might be time to define your TOM.

Need help? Let’s untangle that spaghetti together. We’ll bring the forks.

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