Your guide to transportation management systems
Transportation management systems (TMS) are software tools designed to streamline transportation logistics and provide superior visibility in day-to-day operations. They centralise much of the work of transportation managers into a single hub where documentation, scheduling information and trade compliance information can all be stored.
Lots of different businesses use transportation management systems, including those operating in manufacturing, distribution and retail. A TMS can help you to improve the flow of goods in your business by automating tasks that were previously done manually or through spreadsheets. In this guide, we’ll explain how transportation management systems work, what benefits they offer and what challenges they can help logistics teams to overcome.
What is a transportation management system (TMS)?
A transportation management system is a software system that automates the transportation of goods by helping you with freight, logistics and supply chain management. It can be used to track, plan and manage the movement of goods and people between multiple locations, optimise delivery routes, reduce costs and increase safety. They can also be used to manage a large fleet of vehicles and they are compatible with shipping routes via land, sea and air. Effectively, transportation management systems are a technology that partially automates and totally streamlines most common transportation management activities.
Why is a transportation management system important?
Transportation management systems are important because of the role they play in supply chains. An effective TMS can improve the supply chain at every stage, including planning, procurement and logistics. By implementing a state-of-the-art TMS, transportation teams can plan transportation routes more efficiently which results in fewer delays, reduced risks and superior execution. Not only does a TMS make life easier for logistics and planning teams, but it also increases customer satisfaction because of the higher quality of output that results from a TMS.
Transportation management systems are useful for any companies that transport goods or people, including both small and large businesses. Multinational retailers use transportation management systems to manage the movement of products between suppliers, warehouses and customers, and smaller online retailers can benefit from TMS in the same way to schedule deliveries and ensure that all of their products are shipped on time. Transportation companies use TMS to manage large fleets of vehicles and manufacturing companies with complex supply chains use systems to ensure that production lines run smoothly and reduce disruptions in the supply chain.
What are the benefits of a transportation management system?
Transportation management systems offer a huge number of benefits to those businesses that choose to implement them. They can help businesses to manage trucking operations and schedule deliveries, reduce costs and improve customer satisfaction. Some of the benefits of using a transportation management system include:
- Reduce the business’s costs and pass savings on to end customers
- Simplify the supply chain processes
- Automate business operations and reduce the burden of administrative tasks
- Improve the visibility and security of transported goods
- Save time, reduce the risk of delays and speed up delivery times
- Track freights of all distances within a single dashboard
- Improve compliance with import and export regulations
- Accurate reporting results in better insights and improvements
- Real-time shipping updates for customers result in higher customer satisfaction
- Scale a business effectively by meeting customer expectations on all shipments
- Boost employee morale by automating dull, manual tasks
How TMS address common transportation industry challenges
Understanding the transformational impact that a good transportation management system can have on your business means understanding some of the challenges that the transportation industry currently faces and how a TMS can address these challenges.
Poor optimisation
Very few businesses within the transportation industry optimise processes and resources effectively, and this results in increased costs, delays and risks. Transportation management systems are self-optimising, with contemporary systems using AI and machine learning to improve processes as they learn. Implementing a TMS is one of the most effective ways to optimise transportation planning and logistics overnight.
Low visibility
Many transportation and distribution businesses have low visibility of inventory, logistics, annual spending and shipment data. This is more likely to result in mistakes and reporting errors, which in turn can cause delays to shipments and result in unhappy customers. Transportation management systems use real-time data from multiple data points to increase visibility in all of these areas and improve the service offered to customers.
High rates of returns
Many sectors, particularly eCommerce, are still seeing high rates of returns on products, particularly during peak shipping seasons. Transportation management systems use predictive ordering to factor in returns and product popularity when managing inventory; they can also help online retailers to identify patterns in returns and potentially understand why customers return the products they do.
Choose a TMS for increased efficiency and reduced costs
Transportation management systems pull multiple data points into a single hub to allow transportation planners and logistics professionals to manage all aspects of transportation, scheduling and documentation from the same dashboard. They increase efficiency, reduce costs and result in a higher quality of service for customers, and there’s no doubt that transportation management systems are going to become widespread across multiple sectors over the coming years.
CT Global is a World leading Freight Invoice Audit, Verification and Payment Company.