What Is a Transportation Management System?

What Is a Transportation Management System?

A Transportation Management System (TMS) is a logistics system that uses technology to assist companies in preparing, implementing, and managing the physical movement of incoming and outgoing items, and ensuring that the shipment is consistent with proper documentation. Such a process is often part of a larger system of supply chain management (SCM).

A TMS provides insight on day-to-day shipping processes, trade enforcement data and records and ensures a timely delivery of goods and services, which is sometimes called a transportation management system or transport management software. Transportation management systems also simplify the shipping process and simplify the management and optimization of their transport activities by companies, are they on land, air or by sea.

Why It’s Important to Have a Transportation Management System

In supply chains, transport systems play a major role, which affect all aspects of the project–from planning and purchasing to logistics and life cycle management. Strong and fundamental visibility of a strong system helps to plan and manage transport more efficiently and leads to better customer satisfaction. In addition, this leads to further revenues and encourages the growth of businesses. In a dynamic world of trade that we live in and transact in, it is critical to have a system that enables you to manage complicated business policies and enforcement processes successfully.

Who Uses a TMS?

Transport management systems are primarily used by companies which must regularly ship, transfer and receive goods, including:

  • Manufacturers
  • Distributors
  • Ecommerce companies
  • Retail businesses

Businesses work on a transport system in virtually every sector from infrastructure to life sciences. Main users are companies that spend $100 million or less on cargos per year, but the provision of cloud-based TMS solutions entitles smaller companies to benefit from the integration in their supply chain of a transport management system.

TMS Offerings

Businesses can purchase an external transport management system, which can be paired with their existing ERP and SCM systems. Some TMS solutions have the capacity for trade documentation or you can add a global GTM application to your TMS. Other applications within ERP and SCM packages are typically less rich in features.

Plan, Execute, and Optimize for Timely Delivery of Goods

A TMS can help, execute and optimize products movement in any corporate venture.

Planning: A TMS helps companies to choose an acceptable transport mode and the most suitable carrier for price, quality and scope. A strong TMS can provide visibility at all stages of the supply chain, and in addition to its global trading functionality, it can provide trades and tariff information, and if customs and other trading regulations may cause potential delays.

Execution: Transport management systems have different execution features, but they can include load matching, shipping correspondence, deliveries reporting and monitoring, and freight charging and settlement assistance. Some specialized TMS systems provide monitoring and tracing services— allowing carriers, retailers, warehouses and consumers to share real-time information. Such specialized systems can also be used to handle complex foreign logistics, including the proper supply of import and export documents to ensure that deliveries are compatible with the market.

Optimization: The capability to monitor and track quality usually includes reports, dashboards, analytics and transport intelligentsia for TMS optimization capacities.

The Benefits of a TMS

A TMS — and modern management of transport in general — offers companies many benefits. Some of the main advantages are:

  • Reduced client and end customer expenses
  • Simplification of location, methods and carriers supply chain processes
  • Faster and more reliable billing and reporting management of business operations
  • Visibility and safety improvement, especially for transit
  • Time savings—fewer manual steps result in fewer delays and faster delivery times
  • The opportunity to track goods on a single platform locally and worldwide
  • Import and export enforcement eliminates fines and delays in shipping
  • New insights into companies as better reporting leads to better decisions and processes
  • Better customer service and customer satisfaction with real changes and less gaps in delivery
  • The ability to scale the company to meet the demands of the customer for quick, on-time transport

The Added Value of a TMS in the Cloud

A transport management system based on cloud provides many of the same business benefits as other cloud solutions, including increased scales ecosystems, lower overall ownership costs, no charges for updates, and a higher investment return (ROI).

The IT system offers additional advantages in terms of quicker implementations, reduced learning and configuration times, automatic updates with the latest features, and enhanced security for a cloud based TMS.

The Future of TMSs

Customer expectations remain that, with real-time alerts received throughout the delivery process, not only for on-time deliveries but for two and even one-day deliveries. Changing global trade laws often pressure supply chains to evolve, often by investing in a transport management system.

Transport management systems need to become more reliable and rich in functionality, provide quicker customer response and more business information. Computer research allows Transport Management Systems to be smarter, to provide accurate advice and predictions.

Companies should opt for integration of emerging technologies in transport and global trade networks, to increase their exposure and provide better customer service. Some of these currently available innovative technologies include:

  • IoT fleet monitoring
  • Digital assistants
  • Adaptive intelligence and machine learning
  • Blockchain
  • Cold chain management

Learn more about how transportation management systems are evolving to support the supply chain of tomorrow.

SIPL brings best in class industry standards and practices for regulated operational control to scale your operations. To get more out of SIPL TMS mail us on [email protected]

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