by A transportation management system (TMS) is a logistics platform that uses technology to assist businesses in planning, executing, and optimizing the physical movement of goods, both incoming and outgoing, while also ensuring compliance and proper documentation.
This type of system is frequently integrated into a larger supply chain management (SCM) system.
A transportation management system (TMS), also known as a transportation management solution or transportation management software, provides visibility into day-to-day transportation operations, trade compliance information and documentation, and ensures the timely delivery of freight and goods.
Transportation management systems also make it easier for businesses to manage and optimize their transportation operations, whether they are by land, air, or sea.
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Table of Contents
Why is a transportation management system necessary?
Transportation management systems are critical components of supply chains, influencing every stage of the process, from planning and procurement to logistics and lifecycle management.
A powerful system’s broad and deep visibility leads to more efficient transportation planning and execution, which results in higher customer satisfaction.
This, in turn, leads to more sales, assisting businesses in growing. With such a dynamic global trade environment in which we live and transact, it is critical to have a system in place that will allow you to successfully navigate complicated processes involving trade policies and compliance.
Who makes use of a TMS?
Transportation management systems are primarily used by companies that must ship, move, and receive goods on a regular basis, such as:
- Manufacturers
- Distributors
- Companies engaged in ecommerce
- Retail establishments
- Companies that offer logistics services, such as third-party and fourth-party logistics (3PL and 4PL) firms and logistics service providers (LSP)
A transportation management system is used by businesses in nearly every industry, from construction to life sciences.
Businesses that spend $100 million or more on freight are the primary users, but the availability of cloud-based TMS solutions has made it more affordable for smaller businesses to reap the benefits of incorporating a transportation management system into their supply chain.
TMS services
Businesses can purchase a stand-alone transportation management system that can be integrated with their existing cloud or on-premises ERP software and SCM solutions.
Some TMS solutions support trade documentation, or you can supplement your TMS with a Global Trade Management (GTM) application.
Other TMS, typically with fewer features, are available as modules within ERP and SCM suites.
Plan, execute, and optimize for on-time product delivery.
A transportation management system (TMS) can assist any business in planning, executing, and optimizing the physical movement of goods.
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Planning
A TMS assists businesses in determining the best mode of shipment and carrier based on cost, efficiency, and distance, including optimizing multi-leg carrier routes.
A strong TMS can provide visibility into every stage of the supply chain, and when combined with global trade management functionality, it can also provide information on trade and tariffs, as well as any potential delays caused by customs and other trade regulations.
Execution
Transportation management systems’ execution features vary greatly, but can include matching loads and communicating with carriers, documenting and tracking shipments, and assisting with freight billing and settlement.
Some advanced TMS solutions also offer track and trace services, allowing for real-time data exchange between carriers, distributors, warehouses, and customers.
Such advanced systems may also be capable of handling complex international logistics, such as providing proper import and export documentation and ensuring shipments are trade compliant.
Optimization
The ability to measure and track performance with reports, dashboards, analytics, and transportation intelligence is typically included in TMS optimization capabilities.
The advantages of a TMS
A TMS, and modern transportation management in general, offers numerous advantages to businesses.
Among the many advantages are:
- Cost savings for both the company and the customer
- Supply chain process simplification across geographies, modes, and carrier
- Business operations automation for faster and more accurate billing and documentation
- Enhancement of visibility and security, particularly in transit
- Savings in time—fewer manual steps mean fewer delays and faster delivery times
- The ability to track freight on a single platform, both locally and globally
- Import and export compliance is improved, resulting in fewer penalties and shipment delays
- Better reporting leads to faster action and process improvement, resulting in new business insights
- Customer service and satisfaction will improve as a result of real-time updates and fewer shipment delays
- The ability to grow the business by meeting and exceeding customer demands for quick, on-time deliveries
The advantages of a cloud-based TMS
A cloud-based transportation management system provides many of the same business advantages as other cloud solutions, such as increased economies of scale, lower total cost of ownership, no upgrade fees, and a faster Return On Investment (ROI).
A cloud-based TMS offers additional benefits for IT, such as faster deployments, fewer hours required for training and installation, automatic updates with the latest features, and improved security.
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TMS in the Future
Customer expectations continue to rise, not just for on-time deliveries, but also for two-day and even same-day deliveries, with real-time updates provided throughout the shipment process.
Global trade regulations that are constantly changing are also forcing supply chains to innovate in order to keep up, often by investing in a transportation management system.
Transportation management systems must become more robust and feature-rich in order to provide consumers with faster responses and businesses with more detailed information.
TMS become more intelligent as a result of machine learning, providing better recommendations and more accurate predictions.
Companies can integrate their transportation and global trade management systems with emerging technologies to increase visibility and provide better customer service. These are some of the innovative technologies that are currently available.
IoT fleet tracking
IoT devices and sensors enable real-time fleet monitoring, including in-transit visibility of driving conditions, routes, and assets.
Companies can save money on fuel and maintenance while also reducing delays and improving driver safety.
Personal digital assistants
Chatbots are digital assistants that provide immediate, conversational responses to shipment information, resulting in higher customer satisfaction.
Machine learning and adaptive intelligence
Transportation management systems can predict transit time more accurately, plan capacity, identify at-risk shipments (such as goods about to expire and time- or temperature-sensitive products), and much more by applying machine learning to historical data and trends.
Improved artificial intelligence will also allow your TMS to make more accurate and informed recommendations, such as alternate delivery routes during peak periods.
Blockchain
Blockchain technology is now being used to create complex integrations between shippers, customers, and carriers.
Intelligent track and trace applications, for example, increase transparency and traceability across your supply chain while also ensuring accurate and secure data.
Management of the cold chain
Cold chain management is another blockchain solution available in transportation management systems that is useful when different temperatures must be maintained at various checkpoints along the supply chain.
Perishable or temperature sensitive materials and products, for example, may require a cool temperature in the truck but a slightly higher temperature on store shelves.
The temperature can be monitored throughout the supply chain with cold chain management, with real-time information provided to the business and regulators in the country of origin.
Conclusion
A transportation management system (TMS) is a logistics platform that uses technology to optimize the physical movement of goods.
This type of system is frequently integrated into a larger supply chain management (SCM) system.
A powerful system’s visibility leads to more efficient transportation planning and execution, which results in higher customer satisfaction. A transportation management system (TMS) can assist any business in planning, executing, and optimizing the physical movement of goods.
Modern transportation management in general offers numerous advantages to businesses.
Cloud-based TMSA cloud-based transportation management systems offer many of the same business advantages as other cloud solutions.
Transportation management systems must become more robust and feature-rich in order to provide consumers with faster responses and businesses with more detailed information.
TMS become more intelligent as a result of machine learning, providing better recommendations and more accurate predictions.
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