In many cases, TMS is used as a part of an enterprise resource planning system. A transportation management system deals with the planning, optimization, and execution of the physical movement of goods. Businesses use their TMS as a logistics platform to optimize operations of their transportation fleets. A transportation management system can be used for freight rating, selecting the best route and carrier, and managing freight payments.
TMS can help a business digitalize its freight operations, eliminating the need to call and email external and internal partners. A TMS suggests its users various routing solutions. Once a user evaluates the solutions proposed by the system, they are passed on to the transportation provider analysis module that selects the best mode and the provider offering the most attractive rates.
After the best provider is selected, electronic load tendering and track/trace is generated to execute the shipment and later support freight audit and payment. TMS solutions are offered with different types of licensing agreements such as hosted licensing, on-premises hosted licensing, and on-premises licensing.
Transportation management systems are designed to manage four vital processes of transportation management:
Planning and decision making
A typical TMS analyzes the given parameters to define the best transport schemes. If used correctly, your TMS can help your team come up with a plan to reduce lead-time and decrease stops.
A TMS can help your team execute the transportation plan such as EDI, carrier dispatching, and carrier rate acceptance.
TMS systems enable their users to follow physical and administrative operations regarding transportation, customs clearance, and invoicing documents.
To help managers track key performance indicators, many TMS includes a logistics key performance indicator reporting function.
A TMS also helps with several other tasks such as freight audit, asset management, real-time transportation tracking, and route optimization.
Advantages of TMS
Some major benefits of TMS are:
- Helps improve customer experience.
- Promotes warehouse efficiency
- Help reduce invoicing and other errors
- Better supply chain visibility and control of inventory management.
- Helps reduce costs and save time
History of TMS
Though businesses have always felt the need to optimize their processes, transportation was managed manually until 2010. Although businesses were using tracking systems, the visibility of consignments was almost non-existent.
Traditional platforms were developed for in-house use. These systems had major limitations and failed to ensure real-time access to carrier data.
Since 2010, (thanks to the internet’s rise to power) tracking systems and technologies have drastically improved. With the improvement in technology, many businesses are using mobile solutions to develop easily accessible and cost-effective solutions. Equipped with a range of features, these solutions can track the movement of shipments through different stages right from departure to delivery.
TMS has come a long way. Businesses no longer need to opt for legacy systems that are not only costly to maintain but also take an eternity to process data. Instead, they can use mobile solutions to run and transmit data, which helps save time and money.
Current state of transportation management systems
Thanks to improvements in technology, the cost of connected devices has significantly decreased. Businesses from different industries leverage their TMS to optimize processes related to multi-modal transport and freight. Modern TMS is equipped with several features that enable businesses to track performance. Over the last decade, many businesses have started using telematics and setting up geo-fences to locate vehicles. Many businesses are opting for cloud-based TMS solutions. Thanks to the rising popularity of TMS, the industry grew at a healthy rate of 13 percent in 2018.
The Future of TMS
Wondering what to expect in TMS? Here are some TMS trends to watch out for in 2019 and beyond:
Advanced TMS systems to go mainstream
Some businesses are already using TMS that incorporate advanced technologies such as 3D printers, GPS satellites, big data, and artificial intelligence. As the demand for systems with advanced capabilities to support rate comparisons across different modes and real-time tracking within the same TMS platform increase, developers will come up with an action plan to incorporate advanced technologies and other advanced freight, network, and route optimization features in their TMS.
TMS to incorporate features that will allow them to become one with other office systems
TMS solutions are evolving to become one with various office systems. In the future, TMS will incorporate features that will allow owners to integrate their system with other office systems without incurring substantial costs. The next generation transportation management systems will use Enterprise Service-Oriented Architecture that will facilitate efficient sharing of resources.
Future systems will use meta-intelligence
One of the most promising TMS future technologies to watch out for is meta intelligence. In the future, transportation management systems will use meta intelligence to improve TMS visibility and leverage big data. Meta intelligence will facilitate integration with different business functions such as marketing, customer service, sales, and distribution. In the future, shoppers will be able to calculate the financial and environmental cost of every load in every lane.
More businesses to adopt cloud-based TMS
One of the main reasons why small businesses are wary of embracing TMS is the high implementation and maintenance costs of these systems. To address this problem, many developers have started offering cloud-based solutions that do not need expensive servers to function. As more businesses realize the benefits of using cloud-based systems, their demand will rise.
Find out about the 7 Elements a Transport Management System Should Offer.