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 and supply chain management.
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, transit time, and transaction. It also consolidates the data from all inbound, outbound, and third-party shipments and provides real-time shipment visibility and tracking.
What factors to consider when replacing your TMS system
Is Your Company Expanding?
Is your company expanding into new markets in the near future? How many customers are you planning to add? What will your growth and new day to day operations look like? You will need a TMS that can support your business during this growth.
Many transportation management systems are stuck in the Stone Age and have not been updated for over a decade. Therefore, the TMS software you are using may not have the bandwidth to handle the complexities of your expansion and order management. Compare your current TMS to others on the market and see how they match up. You will want your TMS to have the option of self-configuration, allowing you to design your workflows, custom screens, and portals.
Using your TMS should not be hard. You need to be able to rely on all your systems working well together. If your TMS does not work well with the other software within your company, it is time to look for a better match. You will want a product that is compatible with as much of your software as possible.
You also must be able to simply teach the workings of your TMS to customers and new employees. If this process takes more than a few weeks, your current TMS is not functioning efficiently.
A good TMS system allows your company to communicate better with customers and carriers. It is not doing the job if your current TMS cannot provide up-to-minute updates and keep all parties informed. This will affect your customer and carrier relationships before too long and hurt your ability to manage transportation.
Lack of Security Updates
You have likely read hundreds of stories about cyber criminals attacking companies. Simply put, if your TMS is out of date, it is at risk of cybercriminals. You need up-to-date software to protect your data, and your TMS provider should be delivering frequent security updates.
In logistics, conditions can change rapidly. 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?
If the answer is ‘no,’ your TMS system may not be powerful enough. 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.
Are You Always Calling for TMS Support?
Nothing is more frustrating than continuously spending time on the phone with your TMS customer support team. This does not have to be hard. If you are on the phone trying to fix your TMS too often, it is time for a change.
What a TMS Should Do for You
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
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.
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.
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!