In business, success in logistics translates to better sales opportunities, increased efficiencies, reduced costs, and improved customer experience. Transportation is an integral part of the logistics chain.
It is a strategically important framework for the inbound and outbound logistics movement and helps connect suppliers to customers. It supports the economic utilities of place and time. Place utility implies the availability of products to customers ‘where’ they demand it. Time utility suggests that customers will access goods or services ‘when’ they require it. The success of a supply chain intricately depends on the optimal use of transportation. Hence, the stakeholders must develop the proper transportation pipeline to support a company’s competitive strategy. An efficient approach will enable them to transport products and deliver them to the correct location on time.
Effective transportation management often spells the competitive differentiation and allows a company to maintain a strong foothold in the ever-evolving marketing landscape. Because of the significance of transportation, warehouse managers need to examine transportation in their supply chains. Various risk factors can compromise the efficiency of transportation management, such as sophisticated cyberattacks, driver shortages, deteriorating infrastructure, among others. Effective transportation management can keep a supply chain moving with minimal delays and mitigate various risks.
Transport software is a critical driver in transportation management and helps to improve its efficiency and responsiveness holistically. The transport software is a platform with the desired technological capability to manage and optimize regular transportation operations. Technology is a significant disruptor in various industries and enables them to maximize their potential and achieve more in less time and cost. To leverage technology in transportation, the stakeholders can contact a transport management software company to integrate custom-built software on their business platform. It will enable them to easily classify rates by cost and carriers, distance, transit time, or route type and select optimal shipment mode within no time. With this, they can significantly improve customer service and experience.
Functions Of Transportation Management System (TMS) In Logistics
TMS plays a vital role to streamline the following processes:
- Planning And Decision Making: A TMS supports decision-making during supply chain management. It leverages data to help the stakeholders select an effective transport scheme based on specified criteria. It helps them to adhere to the service level agreement appropriately and save associated time and costs.
- Transportation Execution: A TMS enables the stakeholder to optimize execution such as carrier rate acceptance, carrier dispatching, and Electronic Data Interchange.
- Follow-up: With the help of TMS, the stakeholders can easily track various physical or administrative transportation activities involved within the operation.
- Analysis: Based on the key performance indicators (KPI) of transportation, the stakeholders can analyze the reports to identify if the plan is aligned with the objectives for generating a higher return on investments. The TMS reports on the KPIs for every aspect taking place in the transit.
Benefits Of Implementing a Transportation Management System
The TMS adoption rates have increased exponentially in recent years. It is often used along with an ERP and warehouse management system. A TMS contributes various benefits to the supply chain. It includes tools for driver and vehicle management, carrier rate optimization, and financial performance management. A TMS equips the stakeholders with advanced tools to monitor, organize, and manage the shipment process. It resolves and mitigates unnecessary steps and leverages data to overcome inefficiencies caused due to flawed assumptions in transportation management. Better data access allows them to streamline critical business functions such as LTL and intermodal shipping, domestic and international transport, and inbound and outbound operations. With more data and real-time consignment tracking, the administrator can simplify and bring fluency to the entire process. TMS makes it easier for shippers to understand customers’ trends and respond to their contributions immediately. Hence, it contributes to better customer satisfaction and customer retention.
TMS implementation also helps in bringing down costs related to storing excess inventory. Better data accuracy and predictive analytics help businesses identify their fulfillment strategies to carry the desired inventory that is immediately required. It also improves load consolidation capabilities by helping you to optimize your carrier with little to no wasted space. The TMS solution provides businesses with a centralized dashboard to store and access information immediately. Dashboards help companies make changes, monitor KPIs, and receive instant alerts.
Choosing The Right TMS
For making the right choice, you need to consider your business requirements primarily. Review the various transportation modes, shipments made per month, location, and routing and consolidation capabilities. Determine the automation level for your software. Also, ensure that the TMS will enable your company to comply with legal and federal regulations. Assess the dashboard feature of the TMS. It should allow you to access large data volumes, record data, and secure it for real-time and historical visibility. You can choose to host the TMS on the cloud to save infrastructural costs and improve collaboration. Identify the type of ROI of your TMS. You can also ask your vendor to run a proof of concept to determine how it will leverage time, bottom-line, and risk mitigation savings. Lastly, review your vendor’s capabilities to determine if they will provide you with adequate support if it faces a downtime or requires upgrades.
To Conclude:
These are a few things you should know about Transportation Management System. With the right software in place, businesses can enjoy seamless transportation management and efficiently conduct business globally.
