Choosing TMS, or a transportation management system for your company is a huge decision because there are a variety of providers and features. A TMS helps companies move freight efficiently, reliably and at lower rates. Implementing a TMS drives value by monitoring and evaluating processes, analytics and optimization. The technology routes drivers, schedules deliveries and reports business KPIs.
If only 35% of shippers are using transportation management systems, so choosing the right system positions you to be a market leader in logistics. These 6 questions will help you discover what kind of TMS you need.
While choosing a TMS, it’s important to pick one that meets your immediate business needs so that implementation is successful and there is quick ROI. However, don’t ignore long-term business goals. As a shipper, consider the likelihood that you’ll eventually operate in a different region, with different modes or ship different freight. Looking toward the future is important – you’ll want your TMS to be a long-term investment, not just a short-sighted solution to save money.
You’ll need a TMS with the capabilities to handle all of your freight, but you don’t want to pay for features that you don’t need. Ask yourself what functionalities a TMS must provide to improve processes. Think about if your company needs close inbound and outbound shipment visibility. Are cross-border capabilities crucial? Does the size of the carrier network matter? The answers to these questions often depend upon the provider of the TMS, but it is important to understand your business’s needs compared to the features of the TMS.
Get detailed, line by line pricing from a TMS provider. Installation, training, reports, and notifications may cost you 25 – 30% more than anticipated. You also need to know how much it will cost you to operate the TMS long-term. Are there charges for technical support, system updates and software upgrades? The cost to operate a TMS overtime may end up being more money than the original purchase price.
Your TMS needs to be able to handle the different ways you bill your clients. This information is not always immediately available to a logistics or supply chain professional, but it’s worth looking into. If the TMS does not support the billing functions you need, you will be missing out on a crucial benefit of a TMS. Automated billing and administrative duties are more accurate and much faster than manual processes.
Scalability is a crucial feature of a TMS. You won’t always be shipping the same loads over and over, sometimes you need to send one last minute, or make an infrequent LTL move. Your TMS needs to operate within the range of freight volume you ship. Accessibility to a carrier network is a crucial feature of a TMS, not just for handling diverse and/or infrequent loads but for moving freight quickly.
To get the most value out of your TMS and other internal systems, such as your ERP software, your TMS should integrate seamlessly. One of the most powerful benefits a TMS provides is visibility into logistics. Visibility is one piece of a much larger puzzle and is crucial in providing end-to-end visibility in a supply chain. End-to-end visibility may not be a priority for your organization now, but someday it will be, and then you’ll need a TMS that can support such a venture.
Choosing a TMS can be overwhelming. A TMS becomes an extension of your business – it evaluates ongoing performance metrics and enables productivity and service – so it’s important you evaluate the options and variables to make the best decision.