5 Scenarios That Prove You Need a TMS

From inefficient route planning to high transportation costs, and from breached SLAs to poor customer reviews, the inability to orchestrate efficient transportation management can translate into numerous business risks.

In today’s fast-paced and highly competitive market, businesses need to stay ahead of the curve to ensure efficient and cost-effective transportation of goods. 

However, businesses often fail to identify the need for Transportation Management Systems (TMS), overlooking the potential benefits it offers.

They fail to identify the root cause for delayed deliveries, high operational costs, and shrinking revenue owing to the disparate nature of their transportation management ecosystem. 

These scenarios not only leave a huge dent in the bottom lines but also impact the overall trust and transparency in the transportation ecosystem and can drive customers away. This is where Transportation Management Systems (TMS) come into play. 

Here, we share 5 such scenarios that indicate the need for a TMS and explore how intelligent transportation management software can help in all cases.

TMS Software Necessity Checklist: 5 Instances Where You Can’t Do Without It

#1 – High Transportation Costs

High cost of transportation can be a significant business risk, especially because multiple cost variables are responsible for them.

Inability to optimize freight costs, inefficient route planning and optimization, longer transit times, increased fuel consumption, and higher labor costs – all these factors result in inflated transportation expenses and reduced profitability for companies.

By implementing a transportation management system, companies can address these challenges, and create efficient routes and reduce transportation costs, leading to improved delivery efficiency and cost savings across all the business components. 

Transportation management systems also offer optimized load planning and load consolidation, optimal routing, and efficient resource utilization, contributing to lower fuel expenses, reduced market vehicle requirements, and decreased average delivery times. These cost-saving measures enhance profitability and improve the overall delivery efficiency.

#2 – Mismatched Fleet Requirements 

Delivery demand fluctuations, seasonal rush, order spikes and declines, and the inability to match the right number of drivers and vehicles for efficient fulfillment are some of the most common recipes for transportation disasters.

Manual fleet, resource, and order management inhibit transportation managers from anticipating the right number of assets required for timely and efficient delivery fulfillment.

A transportation management system can easily overcome this challenge via in-built algorithms for intelligent delivery and transportation planning. It also provides an integrated vendor portal that simplifies and streamlines vendor management. 

Businesses can easily partner with vendors, compare available market vehicles, communicate seamlessly, and manage indents for transportation.

This automated vendor and asset management process empowers businesses to manage fleet requirements efficiently, have the upper hand in negotiations, optimize costs, and procure vehicles efficiently.

#3 – Lack of Visibility Across the Supply Chain

Another extremely common scenario is the lack of visibility across multiple components, such as vendors, vehicles, shipments, orders, etc.

This inhibits businesses from getting reliable ETAs, real-time information on shipment whereabouts, robust financial management, and control over the moving parts of their supply chain. 

With multiple carriers involved, communication and coordination often happen through individual calls, texts, emails, and chats. This lack of visibility leads to confusion, discrepancies, and inefficiencies. 

By implementing a transportation management system, businesses gain real-time visibility into shipment movements, enabling them to track shipments, monitor key milestones, and ensure efficient monitoring.

This enhanced visibility improves the end-customer experience, and cost savings, and reduces operational inefficiencies. 

Raising invoices, levying penalties, sending alerts for shipment statuses, etc., becomes easier, and businesses can enjoy reliable and robust supply chain operations. 

#4 – Service Level Agreements (SLA) Breaches

Missing the deadlines for shipment pickups or drop-offs, delayed shipment movements among hubs, delayed deliveries, or loading/unloading – all these events breach SLAs in the shipment lifecycle.

Many times, businesses don’t even know about these delays and end up paying additional charges, such as detention, demurrage, leasing costs, etc. 

Delayed shipment movements also affect the ETA SLAs for the customers, leading to poor customer experience. In a manually managed transportation ecosystem, these breaches go undetected owing to the lack of customer feedback. 

On the other hand, a transportation management system offers real-time shipment tracking, which provides businesses with a comprehensive view of all shipments and assets in transit.

Hence, they can monitor shipments via a single dashboard, eliminating the need for individual tracking and communication with multiple parties. 

Real-time tracking also reduces inefficiencies caused by faulty driver behavior and ensures transparency throughout the transportation process. Customers can be provided with real-time updates on shipment status, enhancing the overall experience. 

Further, transportation management system solutions come with dedicated modules for customer feedback management.

These modules allow customers to submit feedback for successful, failed, and delayed deliveries, helping businesses identify areas for optimization. 

#5 – Clunky Operations Management Owing to Manual Elements

Manual data entry, document handling, and siloed communication with carriers and vendors – these manual processes are prone to errors, delays, and inefficiencies, further adding to operational costs and reducing productivity.

Inability to raise and manage indents, lack of unified collaboration with multiple parties in real-time, and poor visibility across performance milestones – these are some critical indicators that a business needs a transportation management system.

Transportation management software integrates disparate systems, including businesses, end customers, transportation partners, and drivers.

This integration facilitates seamless communication and collaboration across stakeholders, ensuring that information regarding finances, shipping operations, and shipments is easily accessible and shared. 

Managers can easily manage indents, track shipments, carriers, expected arrival times, and more on a single platform. This centralized information reduces customer query calls for shipment status checks and enhances overall customer satisfaction. 

Also, the integrated performance evaluation modules enable businesses to set performance metrics, measure performance, and gain actionable insights.

These insights help businesses choose the best transportation partners for future consignments and improve overall productivity. 

TMS software also streamlines the management of proof of delivery (POD) and non-delivery reports (NDR) that help manage and prevent fraudulent activities such as fake delivery attempts or wrong deliveries. 

Conclusion

Investing in the right TMS software, such as Shipsy, can increase visibility, reduce transport costs, and improve customer experience. Businesses can plan, procure, execute, track, and audit the most efficient transportation for every shipment and unlock 360-degree visibility across all the business components.

They can assign, track & manage deliveries across their fleet, market vehicles, and 3PLs, and consolidate loads for optimal FTL & PTL mix, to unlock the following benefits:

• 14% Decrease in overall transportation cost
• 20% Decrease in average delivery time
• 40% Decrease in market vehicle requirements

For more information or to catch Shipsy’s intelligent TMS solution in action, please get in touch with our experts and schedule a personalized demo today.

Frequently Asked Questions

What are some of the most valuable TMS functionalities?

Route optimization, real-time tracking, load planning, vendor management, carrier management, in-built invoice and billings management, and dispatch planning are some of the most valuable TMS functionalities that streamline logistics, enhance overall efficiency, and reduce costs.

Why do you need a transportation management system?

A Transportation Management System (TMS) is essential to optimize logistics operations. It helps reduce costs, enhance efficiency, improve customer service, streamline routing, provide real-time visibility, and ensure compliance with regulations, making it indispensable for effective supply chain management.