When companies choose to use TMS, it will impact all levels of the organisation, from the operational efficiency and the customer’s experience. However, there are plenty of benefits from implementing TMS that will lead to maximum ROI, and we will look at what these benefits are.
A transport management system (TMS) assists businesses that handle freight by moving it from one destination to the next reliably, efficiently and cost-effectively. TMS helps companies gain visibility into their day-to-day operations while ensuring that freight delivery occurs on time. The system also assists in streamlining the delivery process as it manages and optimises transportation operations. TMS has solutions that make moving freight easier regardless of which mode of transportation is used.
TMS is an investment for the businesses that choose to implement it, and its benefits can be seen from an organisational and financial point of view. Some of the benefits you will see for your business that will lead to maximum ROI include the following.
- Visibility across the supply chain
TMS provides data to improve and control transport processes, which is beneficial when the freight is in transit. Through the data that TMS provides, the business will gain greater transparency. Visibility also enables enterprises to gain better insights into the supply chain through metrics. The metrics you will analyse with a TMS include fuel efficiency, costs, truck capacity being used, transit times, pickup and delivery times, or loading times.
- Increased productivity and efficiency
One of the tremendous benefits of using TMS is that it allows your business to do more in less time, as it provides your company with one platform where you can analyse, manage and execute your logistics. Using TMS eliminates the manual work you conduct, which significantly reduces the time you spend organising your supply chain while also reducing the number of errors. Your employees will also have more time to analyse and make improvements instead of conducting tedious administrative tasks.
- Inventory management and warehouse efficiency
Warehouse efficiency is achieved using TMS as the more you use the transport management system, the less time you have to dedicate to freight management. You will also have more time to dedicate to other projects, such as warehouse duties. The efficiency in the warehouse occurs as a result of tasks being automated and a reduction of errors.
Since TMS also leads to on-time delivery, this will also affect inventory flow and your replenishment strategy. By having clear visibility of the delivery of goods, the business will have the ability to forecast and plan according to demand which reduces backorders or overstocking.
Additionally, your TMS can be integrated with other systems, such as your ERP, which decreases the errors that occur during data entry and the time spent on data entry and correcting mistakes that usually happen during the process. The system can also be combined with a Warehouse Management System, ensuring greater visibility into your supply chain allowing your business to make decisions that will contribute to cost savings and a reduction in inefficiencies.
- Better shipper-carrier relationship
Communication between all the parties is essential during the delivery process. TMS assists in improving communication between the shipper and carrier, and this communication occurs on one platform, enabling streamlined communication and real-time updates. By using TMS, businesses will see a reduction in carrier complaints, which ensures much-needed carrier capacity in high-demand moments.
- Increased customer satisfaction
Businesses that use TMS can expect to improve customer service, which also leads to increased customer satisfaction. TMS leads to increased satisfaction due to real-time shipment information and better predictability. When businesses utilise the data generated by the system, they will be able to provide on-demand and personalised services. If the company continues to offer its customers better services, this may also result in new business opportunities and partnerships.
- Cash-flow improvements and cost reduction
One of the most significant benefits that TMS offers is an improvement in cash flow, as businesses who choose to implement the system for their business will save, on average, 7.2% on their costs. The system provides proper transportation accounting using freight payment, consolidation and auditing services. The system can also save a further 2 to 5 per cent of its total freight bill as it can catch duplicate payments and inaccurate charges that occur frequently.
Businesses who choose to implement TMS can expect to see many benefits, such as cost reductions, increased customer, and improved productivity. However, it is vital to note that some benefits may take longer to see improvements, and you must keep this in mind when you want to calculate the ROI.