A Transport Management System, otherwise known as “TMS”, is a platform part of Supply Chain Management focusing on transport logistics. This aspect of SCM deals with the planning, execution and optimization of the physical movement of goods. In other words, it’s a logistics platform that allows users to manage and optimize the daily operations of transportation fleets.
This process of streamlining includes tracking and managing every vehicle maintenance aspect, routing planning and optimization, warehousing, fuel costing, carrier selection and management, traveller and cargo handling, EDI implementations, communications, accounting, order visibility, freight audit and yard management. All these factors fall under four important operations, namely:
- Planning
This silo outlines the best transportation strategies regarding specified parameters, which would be of higher or lower importance based on the user policy. It encompasses transportation expenditure, minimum stops to warrant quality, shorter lead-time, flows regrouping coefficient and more.
- Execution
This allows for the execution of the transportation plan. It includes carrier-rate approval, carrier sending, electronic data interchange (EDI), etc.
- Follow-up
Here, following up of any administrative or physical operation regarding transportation is granted. Receipt editing, customs clearance, invoicing, event-to-event transportation traceability, transport alerts delivery, customs clearance, etc.
- Measurement
Incorporates a strategic key performance indicator (KPI) report functionality for transportation.
The end-goals of implementing a solid Transport Management System are to gain real-time supply chain visibility, reduce costs, improve efficiency and enhance customer service. The role players that benefit from TMS are both shippers and logistics service providers. Third-party logistics (3PL) companies, manufacturers, wholesalers, retailers, e-commerce organizations and distributers are all served by TMS software.
Benefits
Enhanced Efficiency and Productivity in the Warehouse
Executing a Transport Management System allows you devote more time to areas that need attention in your fulfilment centre. With the constant movement of inventory and urgency with which orders need to be fulfilled, organizing the warehouse is an absolutely integral process in the logistical world. Most transport management software has the accompanying warehouse inventory management software which allows both vendors and suppliers to set up appointments, while allowing you to track all inventory from your warehouse to transit to customer. This way, data is more efficiently managed, decreasing time spent on correcting any data entry errors. TMS in conjunction with WMS and/or ERP enables overall supply chain visibility that allows you to make business decisions driving additional cost savings and reducing inefficiencies.
Improved Cash Flow
By making use of the analytics provided by transport management software, you are able to immediately assess your business’ strong and weak points. Through thorough data analysis, the system will provide various user-friendly suggestions about reducing expenses in areas such as driver overtime, route options and fuel consumption. Good software will also enhance the accounting aspects of every logistical route and with improved payment, auditing and consolidation services, your business can save on finances. Expanding more on saving, customization is also key because the automated carrier rating and selection can choose the carrier based on low cost, fastest transit time, or a combination of both.
Route Visibility
The ability to track where your drivers are in real-time comes with unending data-gathering benefits. An overall assessment can be made by the transport management software on the various routes being taken and time allocated to each route, thereby allowing you to create a more efficient schedule going forward. Assessment of individual drivers can also easily be done, allowing you to build up a profile on the efficiency of the driver and provide feedback as to where improvements can be made. There are also huge safety and security benefits to real-time tracking, particularly in the case of accidents or hijackings. You can pinpoint exactly where your driver is and alert emergency services, saving on crucial minutes.
Minimized Paperwork
Through the implementation of an effective transport management system, all accounts should be automated which means less time spent on draining paperwork. All quoted amounts can also be carried forward to an invoice, thereby reducing any incorrect billing and credit notes. This decrease in administration frees you up to focus on other aspects of your business that could be improving your bottom line.
Heightened Customer Service
For any business to grow, providing excellent customer service needs to be a mandatory fulfilment. Consumers always like to know where their orders are at all times and with an outstanding transport management system in place, this is possible. The ability to monitor on-time performance reveals how frequently a carrier meets or doesn’t meet their transit times logged into the system. Should your customer pay a higher rate for hastened service, you are able to help them save money by holding the carrier responsible with regards to meeting those times. Furthermore, the tracking and reporting aspects of a TMS allow you to identify service failures so that you solve them before problems occur.
Encouraged Repeat Business
Every aspect of the transport management system software mentioned above will save you invaluable time and money by effectively increasing supply chain efficiency from the date of implementation. While savings may start slowly, the incremental benefits will soon be evident. Overall, your improved business practices will ultimately benefit the customer, ensuring repeat business and referrals.
If you are looking for an effective Transport Management System for all your logistical needs, it is important that know exactly what the system can offer you as well as how it compares to others in the same field. Let’s look at the main questions to ask:
- How many years’ experience in the transport management software industry do you have?
- Is your transport management system going to need to be customized?
- How will a transport management system specifically improve my company?
- What elements of the logistics’ industry does your business cater for?
- Does the Transport Management System include training?
- What security features does the system include?
We have provided answers and guidance to these questions in our Transport Management Systems: Questions To Ask article.
Top Transport Management System Options
FreightWare Transport Management Software
FreightWare Transport Management Software is a world-class system designed for the courier, break bulk and line haul industries as well as ex-warehouse distribution. FreightWare controls the operational layer for supply chain execution and enhances the effectiveness of the supply chain process.
MPO TMS
The MPO Supply Chain Suite includes a Transportation Management System with powerful features to streamline all processes of the transportation life cycle across multiple carriers to help you reduce costs, improve operational efficiency and enhance customer satisfaction.
JDA TMS
This option automates and streamlines your business processes, thereby significantly reducing administrative and operating costs while increasing productivity and visibility. Providing standardization throughout your procurement, planning, execution and freight audit processes in addition to centralizing logistics visibility, JDA’s easy-to-use solutions quickly capture and distribute accurate information to sharpen decision making across your supply chain.
Oracle TMS
Transportation Management Oracle offers a comprehensive and fully integrated stack of cloud applications, platform services and engineered systems.
SAP TMS
SAP Transportation Management System (TMS) accurately forecast demand and shipment volumes to fine-tune transportation planning. It enhances freight, fleet and logistics management. It also gains real-time visibility into global and domestic shipping across all transportation modes and industries.
Dovetail offers Transport Management Systems (TMS) which can be customized to serve individual business requirements and assist businesses in keeping abreast of industry challenges. Contact Us for More!
References
Dovetail. 2017. Transport Management Systems: Question to ask. [ONLINE] Available at: Transport Management Systems: Question to ask. [Accessed 18 September 2018].
PAT RESEARCH. B2B Reviews, Buying Guides & Best Practices. 2018. Top 21 Transportation Management Software – Compare Reviews, Features, Pricing in 2018. [ONLINE] Available at: Transportation Management Software. [Accessed 14 September 2018].
SearchERP. 2018. What is transportation management system (TMS)? – Definition from WhatIs.com. [ONLINE] Available at: What is transportation management system (TMS)? . [Accessed 17 September 2018].
Technopedia. 2018. What is a Transportation Management System (TMS)? – Definition from Technopedia. [ONLINE] Available at: What is a Transportation Management System (TMS)? . [Accessed 17 September 2018].