What is a Transportation Management System
A transportation management system (TMS) is a logistics platform that allows a third-party logistics company (3PL) to help businesses plan, execute, and optimize the physical movement of goods. A TMS is a software solution that helps companies handle their freight operations.
Third-party logistics companies will operate and monitor the TMS as part of the transportation services, running as many transportation functions as the company requires. The customer ultimately chooses how involved the 3PL is in the logistics operations. Customers also have access to a custom-built transportation management system, which easily integrates with their supply chain.
Why is it important to have a TMS system?
In the rapidly evolving supply chain industry, there are multiple ways to achieve, enhance, and maintain visibility. It comes down to the vital supply chain visibility solution: a transportation management system (TMS).
TMS software is critical to supply chain visibility, providing excellent transparency in every shipment and transaction. It also consolidates the data from all inbound, outbound, and third-party shipments and provides real-time shipment visibility and tracking.
How A TMS Improves Industrial Supply Chain
A good TMS will allow you to prioritize preferred carriers and quickly post loads. Other capabilities should include efficient load tracking along with the following:
- Customizable user interface
- Self-serve LTL platform
- Freight posting to our closed network of pre-qualified carriers
- Automated rules
- Option to give priority to your preferred carriers
- Dock scheduling
- Consolidated billing and invoicing
- Track and trace shipments
- Status update notifications
Does your TMS allow you to change course to your backup plan when conditions change? Can you recalculate routes and assess carriers? Can your TMS do this quickly and accurately? In logistics, conditions can change rapidly causing supply chain breakdowns. If the answer is ‘no,’ your TMS system may not be powerful enough. Optimizing your business using a TMS can help take your business to the next level.
A TMS should be able to take in all the changing conditions and communicate with you, your carriers, and your customers. Transportation management systems today should be able to update routes in real-time. You need to know if there are any issues along the route, from traffic to warehouse and truck capacity issues. Not knowing this information can cost you significant money and damage customer relationships.
You also never know when you will need to change your business structure or overhaul your supply chain. Your TMS must be able to keep up and evolve. Adding third-party modules can be frustrating and costly.
A state-of-the-art TMS will boost logistics efficiency by optimizing carrier routing decisions and reducing redundant administrative activities. It will also decrease a company’s overall transportation costs by an average of 10 – 30 %, along with administrative and operational errors. A state-of-the-art TMS can save your business time and money.
It’s easy to measure your company’s KPIs in a TMS. A transportation management system gives you access to financial reporting based on your BOL information and provides consolidated billing. Through data analysis, you can track and measure your key performance indicators:
- Simple, configurable charts and graphs
- On-time performance
- Lane Analysis
- Volume trends
- Cost per mile
- Cost per Ton
- Financial reporting
- Trend analysis
- Visibility into the supply chain regardless of stage and location
Supply chain visibility
A high-quality TMS system should come with access to a customer tracking portal. This will give you visibility into your product flow and show you all the tracking updates on a map. You will see the location of your shipment and get updates on it.
A TMS also gives additional supply chain visibility to your customers. You can keep them posted on the shipment’s flow by sending instant notifications and updates generated through the TMS. It will represent you as a reliable shipper that prioritizes clients’ needs and shares control over the shipment.
A sound TMS system allows your company to communicate better with customers and carriers. Your current TMS is not doing the job if you cannot provide up-to-the-minute updates and keep all parties informed. This lack of transparency will affect your customer and carrier relationships before long and hurt your ability to manage transportation.
Supply Chain Planning
At state-of-the-art, TMS gathers data to allow greater visibility into your supply chain. You will be able to gather information in one place that in years past would have come from many sources. With this data, you can create a more effective plan. With that plan, your operations will run smoother and more efficiently.
Additionally, by utilizing tools like route optimization, carrier selection, and quote management, you can better optimize your supply chain. Plus, you can use TMS tools to predict transit times. This will help you anticipate delays and help you create a solid plan.
Supply Chain Execution
After completing the planning process, you want to continue optimizing your supply chain operation. Making sure your freight is getting where it needs to go on time.
A state-of-the-art TMS can help you with the following:
- Receiving freight settlement, invoicing, and payments
- Booking freight with carriers and digitally tendering loads
- Manage, organize, and share freight documentation.
- Track shipments and receive real-time updates, including carrier performance evaluations.
- Electronic filings for customs declarations, security filings, and export documentation
If your business utilizes a more extensive carrier network, a TMS may be able to integrate its systems into your own. With this, you can automatically pull relevant data immediately rather than navigate a number of other portals. You want to have that tracking information as quickly as possible, so having it in one location increases efficiency.
PLS Logistics Services commits to giving customers everything they need to be successful through our advanced technology. With more than 30 years of experience in the transportation and logistics industry, we fully understand all the major challenges customers face when trying to improve their performance.
With our in-house transportation management system, PLS PRO, we provide proprietary management, data storage, and reporting. Our technology easily adjusts to your transportation needs, regardless of the complexity.
Request a free demo today!