Benefits of a transportation management system
By: Phil Sneed
Delivering goods from one destination to another involves more moving parts than one might imagine. Other than taking into account the route a driver should take, weather conditions and fuel consumption, logistics management companies also have to account for transportation management systems. Without this system, supply chain management could come off as disjointed and not as efficient.
What is TMS?
According to TechTarget, transportation management systems are designed to aid interactions between order management systems, and distribution centers or warehouse management systems. By using a TMS, shippers can use various modules built within the system to plan optimal routes to the final destination in addition to order management and load optimization.
According to Gartner, an IT research firm, a TMS also helps users manage freight payments and bills. In many ways, these modules are a must have if carriers wish to remain successful and meet demand, especially with the holiday season quickly approaching.
While the idea of a TMS will remain the same for the foreseeable future, its availability may begin to change due to emerging and evolving technologies, such as cloud computing and the Internet of Things. For example, a quick comparison on Software Advice's overview of TMS reveals more of these systems are implementing the cloud. In fact, some are only accessible through the cloud. For carriers, this feature enhances accessibility and allows them to make real time updates. Costs are also low, as carriers in most instances pay a monthly subscription service to use a TMS, meaning no extra hardware, such as a computer server, is required on site.
"These modules are a must have if carriers wish to remain successful ."
Even the U.S. Department of Energy highlighted the benefits of a cloud-based TMS. Transportation costs are reduced by providing much-needed access to qualified carriers in a user-friendly way. A good TMS shouldn't be difficult for users to navigate, particularly if they're pinched for time. Users can also take relief knowing using a TMS will also help meet any regulatory compliance requirements.
With any type of software or management system, there are bound to be benefits for users, and TMS is no different. In addition to having access to qualified carriers, a TMS also increases warehouse efficiency. According to Cerasis, TMS use will contribute to lower time spent on freight management. As a result, a TMS also helps reduce inventory, as users can appropriately predict future demand and manage current stock.
One of the biggest benefits of a TMS, however, is the level of customer service afforded to the user. The nature of the software's modules means users can see, in real time, the various effects of their choices, which can range from choosing a specific carrier to driving a certain route. Users can even select which shipping mode to implement, such as rail, freight or the combination of both, intermodal. Such knowledge is important because you can experiment with different choices to ultimately settle on a delivery system that will benefit users, carriers and customers.
Logistics management is only part of the transportation puzzle. In order for drivers to make their deliveries on time, transportation management systems have to be used by all parties to settle on costs, routes and shipping modes. With so many moving parts, a TMS can help simplify the entire process. Above all, operations become more effective and costs are reduced.