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A key factor in maintaining an uninterrupted supply-chain management flow is the seamless movement of goods from one destination to another. Hence, businesses of all sizes are adopting innovative transportation management systems to gain better operational control and visibility over the goods movement and ensure on-time deliveries. Before we dive into the details, let us explore ‘what is TMS’ or a transportation management system.
A TMS or transport management system allows businesses to unlock cost-efficient and scalable delivery operations for the lowest price. They can reduce their paperwork, get access to optimized routes, track freight movements effortlessly, and maintain greater transparency with customers for enhanced satisfaction.
Businesses can also overcome challenges such as transportation costs, reduce maintenance costs and ensure optimum vehicle capacity utilization.
But then again what is TMS and what are its core offerings? How does a TMS enable businesses to scale their logistical operations and manage multiple 3PL providers simultaneously?
In this blog, we will explore the various functionalities of the transport management system, core competencies, key features, and future trends to look out for.
Before we dive into the details, let us begin with a detailed overview of the transport management system.
TMS stands for transport management system (TMS) which helps businesses automate their logistics transportation and plan, monitor, track, and manage the logistics operations via a unified dashboard. Enterprises can also leverage TMS to manage their logistics partners and unlock a 360-degree view of all the transportation processes.
The logistics supply chain is a complex process. There are multiple moving parts and managing them along with the actual shipments is an operational overhead. Further, manual management and tracking of asset movements, performance, and strategic planning result in poor operational efficiency.
A robust transport management system assists business users in planning, integrating, optimizing, and executing multiple transportation steps in the supply chain without a hitch. Businesses can create strategic plans for the management of different types of deliveries, onboard multiple logistics partners, and have a unified management dashboard for all types of communication, collaboration, analytics, reporting, and much more.
Listed below are some of the core competencies of a transport management system.
Based on cost, efficiency, and distance, a TMS assists a business or enterprise in choosing the best carrier and mode of shipment, including optimized multi-leg carrier routes. The platform offers visibility into every stage of the supply chain and information on trade, and tariffs, including potential delays due to customs and other trade rules.
The capacity to analyze and track performance through reports, dashboards, analytics, and transportation intelligence is one of the core competencies of TMS. As a result, shippers can optimize upcoming shipments with historical data for shipment performance, including operational statistics (OTP/OTD) and carrier scorecards.
The executive function of TMS varies from one system to another. Some key functionalities include managing transportation for carrier communication, tracking shipments, and supporting freight billing and settlement.
Smart TMS solutions also offer track and trace services, allowing real-time information interchange between carriers, distributors, warehouses, and clients. Businesses are able to effortlessly manage various complexities of international logistics, including documentation of import and export papers and assurance of trade compliance with shipments.
Apart from storing carrier details, TMS is also a transactional and communication system that lets users organize, carry out, and track shipments. The platform has to be integrated with carrier systems to obtain data.
Orders usually arrive automatically through a TMS-integrated ERP. A TMS can also be connected with a warehouse management system (WMS) for better coordination of the processes that take place at the interface between warehouses and freight shippers, such as labor scheduling, yard management, and load management.
Order processing involves the three primary SCM systems- ERP, WMS, and TMS. To deliver the right products to customers at the right time and as effectively as possible, the three must share specific forms of data and standard documents. However, a few challenges may arise in the working of transport management software. Some of them are mentioned below.
It is impractical to spend time hopping from one website to another and asking carriers in your network for the best prices when working with various shipments. Requesting quotations from various carriers can be time-consuming, taking a toll on overall productivity.
There are different types of shipments and the transportation needs for all of them might also vary. There are instances when shipments need to be handled very carefully, delivered at a specific time frame, or maintained at a particular temperature.
Consequently, not every package can be handled by a single carrier. While certain carriers may be better suited to long-distance shipments, others may be able to provide short-distanced but premium services.
However, working with multiple service providers in a manually-managed system is neither scalable nor efficient. Hence, most businesses are stuck with non-optimized transportation management and suffer from cost leaks and poor productivity.
Not every order is sent in an individual package from the source hub or origin. A number of them can also be a part of a bigger bag, called the Mother Bag.
Hence, the procedure of tracing freight can become exceedingly complex. Without a TMS, businesses need to have human resources for filling out forms on numerous carrier websites with shipment numbers, or for making calls for shipment status. This, in turn, can lead to multiple issues, such as partial or incorrect information about the shipment movement that also amounts to poor customer experience.
In traditional approaches to transport management, business users have to simmer through hundreds of options manually. They need to study each service provider to identify the cheapest and the most effective logistics partner.
But there is no standardized and data-driven way to get performance insights for all the components, such as riders, fleet providers, carrier partners, etc. Thus, the businesses are unable to identify any kind of operational inefficiencies or the most profitable logistics partners for them.
This leaves potential room for errors that might later take a toll on your supply chain operations in the form of rising costs, lack of operations management, inefficient inventory management, etc.
In a recent survey, 36% of the respondents believe predictive warehouse analytics helps in building a more balanced supply and demand model. TMS handles the sourcing of goods, scheduling of transportation, and payment of transactions. The platform also enables organizations to identify potential threats and take remittances.
Listed below are some of the most significant benefits of using a transport management system.
A TMS can offer a number of advanced capabilities, such as onboarding and working with multiple carrier partners, and managing all the shipment movements via a single dashboard.
It streamlines the carrier selection procedure offering a prioritized ranking of carriers and logistics partners on the basis of previous performances and many other custom criteria, such as area served, type of transportation, vehicle type, etc.
A TMS also allows businesses to match loads to the right carriers and optimize vehicle capacity utilization, thereby reducing vehicle lease and fuel costs.
With a TMS, managers and other stakeholders can keep tabs on moving freight and get alerts for any unforeseen delays or transit exceptions from a single dashboard. They can check which shipment has crossed which milestone and by what time would they be delivered to the end customer.
All these insights can be shared with all the stakeholders including the end customers which not only reduces the confusion but also helps reduce customer queries for checking the shipment status.
As businesses have real-time visibility over shipment movements, they can plan and optimize the delivery processes in an even better and more strategic manner.
Fleet and transportation management involve multiple decisions, such as carrier selection, vehicle make selection, routing, efficiency, etc. TMS offers smart business intelligence or data-driven insights for all these and many other such decisions.
Now, one might ask, what is TMS business intelligence? Let us find the answer.
A TMS comes with smart data analytics and reporting capabilities which means that organizations can store, process, query, and visualize the data in multiple ways to taking smart decisions. The data-rich insights into various components of the transport system, enable businesses to opt for the most profitable partners and steer their operations toward sustainable growth.
A TMS considers multiple factors, such as fuel cost, transport speed, and rider performance, to determine the best cargo and transit route for the delivery process. Choosing the right carrier can significantly bring down your overall spending by 2-7% annually.
Smart routing functionalities help reduce the overall cost of delivery as the riders are traveling via the most optimized routes. The managers can see the routes being taken by the riders which help in arresting issues such as empty miles and fake deliveries. As the managers can use the TMS to optimize the vehicle capacity, they can reduce the number of trips by maximizing the number of shipments delivered in one go.
Further, an intuitive TMS solution provides insights into your spending and identifies areas where money is being increasingly overspent. Lastly, with multiple carrier options to choose from, managers are able to negotiate better and ensure the costs do not take a toll on the budget.
As the managers have access to real-time information about the logistics and supply chain movements, they can manage and plan the operations in a strategic manner. AI-enabled TMS solutions enable businesses in identifying processes and operations that lead to exorbitant costs.
For example, a TMS can automate the redundancies and identify the processes leading to cost leakages and inefficiencies. It can also help make these processes better and more efficient via smart planning and actionable insights.
A robust TMS platform accelerates organizational performance via instant course correction, inventory tracking, route optimization, in-depth reporting capabilities, etc.
Stats show that 30% of companies witnessed an increase in customer satisfaction after TMS integration. Since the customers are also able to track the order status in real-time, it results in greater accountability from logistics providers.
By integrating a TMS with warehouse management, customers receive alerts when their orders are shipped, along with a live tracking link. As buyers get access to every inch of the delivery process, businesses no longer have to deal with check calls.
They can also get granular insights into the order movement across all the key milestone events, such as hub-to-hub movement, destination hub-to-delivery location, etc.
Okay, so TMS is a great choice. But does it mean that every TMS is a relevant choice for every business?
The answer is no.
So, what is TMS must-have feature list or the key considerations every business must have while choosing a TMS?
Let’s find out.
Carrying out an uninterrupted supply chain network flow means ensuring maximum products are shipped out at the same time. A robust TMS calculates the amount of loading space available in trucks, trailers, and containers and how much of it can be optimally used.
Intelligent TMS platforms offer 3D load planning capabilities for enhanced space utilization and also allow load management for planned and unplanned deliveries keeping the custom optimization parameters in mind.
What good is any platform if it adds up to operational complexities? A low-code easy-to-use TMS solution helps businesses to reduce IT dependence and provide valuable analytics to users within a few clicks.
In addition, an intuitive user interface makes Ad-hoc reporting frictionless and easy to navigate through, saving significant time and effort.
Smart TMS allows business users to get a real-time view of the goods’ movements from one place to another. In other words, they can monitor the truck continuously and don’t need to get in touch with the driver to find out where it is.
Attaining a 360-degree view of the freight movements is imperative to ensure seamless transport management and thereby, a robust supply chain network. Moreover, buyers also receive a live tracking link via SMS, WhatsApp, or Email to effectively monitor the freight from their end.
Route planning and optimization are another must-have in a TMS as it enables the businesses to complete the deliveries in a timely manner all the while keeping the fuel and operational costs minimum.
Route planning and optimization features also enable businesses to evaluate, analyze, and allocate consignments to the right vehicle and find the most efficient route based on consignment mapping with the vehicles.
Transportation management can be complex and paper-intensive, particularly the settlement phase. TMS simplifies this phase by producing digital bills of lading, bill customers, and carrying out freight audits.
This helps to automate payments, improve claims management, and optimize billing and invoicing procedures. The managers can implement smart and digital ways to manage the CoD orders, cash reconciliation, rider payout management, etc.
The market fluctuations and changing customer expectations make it hard for managers to accommodate the sudden dips and demand surges in delivery volumes. Therefore, having a TMS with cloud capabilities is a must.
Smart TMS solutions running on the cloud make it possible for businesses to scale their operations up and down as and when required. This functionality stems from advanced data analytics that offers predictive insights into the market.
They can also leverage the pay-as-you-go capabilities of the cloud platform and save on operational costs.
Next, we share some future trends in the transport management system market.
With a predicted CAGR of 8.6% by 2030, the global market for transport management systems is expected to reach $7981.5 million by 2030. Logistics providers must adapt to evolving global trade regulations by making investments to stay ahead of consumer expectations.
Future-ready TMS platforms provide AI-enabled smarter decision-making via actionable insights and process-oriented dashboards. Many TMS solutions are becoming more sophisticated owing to machine learning, making better recommendations and more precise forecasts.
Businesses are deploying cloud-enabled capabilities to identify critical roadblocks and upscale logistics operations.
These cutting-edge technologies offer multiple advanced features, including:
Businesses are increasingly deploying IoT and device sensors to attain in-transit visibility of driving conditions, routes, and assets. New-age innovation in cellular networks such as 5G also enables users to monitor the container temperature and surrounding conditions. As a result, businesses can reduce their fuel and maintenance expenses, increase driver safety, and cut back on delays.
Digital assistants in the form of chatbots provide prompt, conversational solutions to shipment-related questions, reducing check calls and increasing customer satisfaction. Virtual assistants are becoming more intuitive to provide quick redressals of customer grievances.
An intuitive TMS solution enables business users to anticipate transit times, plan capacity, and identify at-risk shipments by applying machine learning to past data and patterns. AI-enabled TMS platforms also offer dynamic routing features to overcome traffic obstructions and minimize times lost in transit.
Shippers, customers, and carriers are now all integrated under one purview owing to blockchain technology. TMS integrated with Blockchain technology will enhance visibility for both shippers and consumers regarding the shipment status.
Carriers are provided with greater access to log updates to the blockchain, keeping the concerned parties updated with real-time information.
Cold chain management is required for maintaining different temperatures at multiple checkpoints along the supply chain. For instance, certain products need to be kept at lower temperatures during transit.
Yet, at the same time, those products might require slightly warmer temperatures on store shelves. With cold chain management, the temperatures are effectively monitored, and the real-time data is shared with the company and regulators.
Shipsy’s AI-powered logistics platform is the one-stop solution for industry leaders to seamlessly connect cross-border and local logistics and improve supply chain operations via intelligent 3PL management. Our state-of-the-art solution equips you with visual interfaces and drag-and-drop features for enhanced user experience and actionable analytics for smarter decision-making. Now gain a 360-degree view of the entire transportation process with process-oriented dashboards and say goodbye to empty miles.
Shipsy is transforming logistics ecosystems via smart transportation management and end-to-end logistics management services across multiple industry verticals and has helped businesses unlock:
For more information about the transportation and route optimization platform or to get started with Shipsy’s smart offerings, please schedule a custom demo today.
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