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How a Transportation Management System Can Benefit Your Supply Chain

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Supply chain operations may get increasingly complicated as a firm expands. Those sending a few cargo a week may not require a transportation management system (TMS). If you transfer cargo through several modes from multiple origin locations, a TMS may help you plan, execute, and evaluate your supply chain operations.

We'll explain the advantages of a TMS for your firm and examine how other operations use TMS features so you can decide whether you need one. A TMS is still a big investment for smaller organizations, even with cloud-based software. Before jumping in, know the perks.

Which companies use TMS?

Several sectors employ transportation management systems. Generally, organizations who invest in this software regularly move commodities. All manufacturers, merchants, and suppliers. Third-party logistics businesses (3PLs) that transfer clients' freight use TMS.

Transportation management systems are sometimes incorporated into ERM or supply chain management systems in bigger firms. Warehouse management systems may be integrated with TMS software (WMS).

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TMS benefits for Improving the Supply Chain

Companies that send products through numerous modes and carriers have many alternatives, data to arrange and analyze, and decisions to make. A TMS may condense information on easy-to-parse dashboards and synthesize complicated data sets into actionable figures.

As you explore the advantages of a TMS, it may be simplest to think about planning, execution, and analysis.

Inventory Management

By combining data from several sources, a TMS may improve supply chain visibility.
A supply chain manager may design a more effective strategy with this visibility. A TMS can help with:

  • Optimizing routes
  • Modify pricing and delivery recommendations
  • Carriers and quotes
  • Transit times and delays, particularly for international or multi-modal shipments

A manager of the supply chain may then utilize this information to formulate a sound strategy for improving the efficiency of the supply chain. This might entail leveraging the data contained inside a TMS to discover new methods to save money on freight, boost delivery efficiency, improve on-time delivery in order to promote customer happiness, or affect any other milestones that are significant to the business.

Even though a significant portion of this data is often accessible to businesses that do not have a TMS, it would need a significant amount of effort to organize, synthesize, and evaluate. The gathering and analysis of the data may be handled by a TMS, which provides supply chain managers with the information they need to formulate the appropriate strategies in order to maximize efficiency.

Execution of the Supply Chain

Once the phase of planning has been completed, transportation management systems may also assist improve the subsequent phase of goods movement, known as the phase of execution. This phase involves ensuring that freight is delivered to the appropriate location at the appropriate time.

A TMS may be useful for the following:

  • Making arrangements with carriers for freight, as well as electronically bidding on shipments
  • Documentation of freight management, including management, organization, and sharing
  • Monitoring shipments for both the goal of providing real-time information and assessing the overall operation of the carrier
  • The finalization of the freight transaction, including billing and payments
  • Electronic filings for a variety of documents, including customs declarations, filings for securities, export papers, and more

If your company collaborates with a number of distinct carriers, a TMS may be able to interact with their respective systems and automatically import all of the pertinent data from those systems into your TMS. Your TMS may be able to compile all of the necessary information into one area, making it unnecessary for you to go to a number of separate portals in order to get tracking details or download invoices.

You will not only benefit from huge time savings, but it also indicates that you have all of the information at your disposal that is necessary for the subsequent phase of supply chain optimization.

Inventory Analysis

A transportation management system may help supply chain managers optimise operations and find efficiencies.

A TMS may generate easy-to-analyze reports and dashboards after gathering supply chain data. More data isn't necessarily better. Supply chain managers may quickly become lost in data. The analytical tools in a TMS can transform mountains of data into actionable figures.

TMS may also provide performance insights. Your company may have gotten multiple late-delivery complaints. Instead of hand-sorting a year's worth of monitoring data, a TMS may instantly generate a report that includes:

Percentage of on-time/late shipments to determine whether this is a company-wide or customer-specific issue. See whether late shipments can be traced to a certain carrier using carrier statistics.

A transportation management system is a large investment, similar to the financial commitment required for purchasing other pieces of software. However, there is also the potential for a huge increase in advantages, in particular for businesses that transport a big quantity of products. Increased visibility, improved capabilities for analytics, and the efficacy of controlling everything from a single system all have the potential to serve as a launchpad for major time and cost savings.

You will have a better idea of whether or not a TMS will provide you with returns that will make the investment worthwhile if you compare the cost to the possible advantages of using the system.

Read our TMS Buyer's Guide

Navigate the TMS software landscape with our comprehensive buyer's guide - find the perfect platform for your trucking business today.

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