A transportation management system (TMS) is a software application designed to streamline the shipping process by providing visibility and control over all aspects of transportation management.
TMS systems are used by organizations of all sizes, from small businesses to large enterprises, to ship both domestic and international orders.
Businesses that deal with the transport of physical goods know all too well how important an efficient and cost-effective transport management system (TMS) is.
A good TMS will automate and streamline many of the tasks involved in transport planning and execution, from route planning and load optimization to freight billing and cost management.
In this blog post, we’ll take a look at the key functions of a TMS and how it can benefit your organization so let’s start.
Key functions of the Transportation Management System
1. Planning and Optimization
One of the key benefits of a TMS is its ability to help you plan and optimize your shipping operations. A TMS can help you create shipping plans that minimize cost and maximize efficiency by taking into account factors such as lead time, mode of transport, and shipping routes.
A TMS can also provide you with real-time visibility into your supply chain so that you can quickly identify and resolve any potential issues.
2. Execution and Tracking
Once your shipping plans are in place, a TMS will help you execute them by providing tools for selecting carriers, booking shipments, generating documents, and tracking shipments. A TMS can also interface with your other business systems (such as your ERP or accounting system) to automatically update shipment records and invoice customers.
3. Analysis and Reporting
A good transportation management system will also provide you with powerful analysis and reporting capabilities. This data can be used to track KPIs such as on-time delivery rate and transport costs, which can help you identify areas for improvement in your shipping operations.
4. Load Optimization
Most businesses require their customers to ship products in certain sizes and quantities that match their own specific needs. This can often result in partial truckloads, which are both inefficient and costly.
A good transportation management system will have load optimization capabilities that help businesses fill those partial loads by consolidating multiple orders into a single shipment. This can result in significant cost savings and improved customer satisfaction levels.
5. Route Planning
A TMS will also have built-in mapping capabilities that allow you to plan the most efficient routes for your trucks. This takes into account not only the actual distance involved. But also factors like traffic congestion, weather conditions, weight restrictions, and more.
By planning the most efficient routes possible, you can avoid costly delays and maximize the use of your resources.
6. Freight Billing
Freight billing can be a complex and time-consuming task. Particularly if you ship to multiple destinations or use a variety of different carriers. A good TMS will automate much of this process by automatically generating bills of lading, invoices, and other necessary documents. This can save your business a significant amount of time and money.
7. Cost Management
Transport costs are one of the biggest expenses for any business. So it’s essential to have a handle on them at all times. A good TMS will provide you with detailed visibility. Into all aspects of your transport spending, including fuel costs, driver expenses, maintenance costs, and more.
This information can be used to negotiate better rates with suppliers, improve fleet efficiency, and reduce overall transport costs.
8. Tracking and visibility
Another important function of a TMS is to provide you with real-time tracking information for all shipments in progress. This information can be used to keep customers up-to-date on estimated delivery times, monitor shipments for potential delays, and quickly resolve any issues that may arise en route.
A transportation management system (TMS) is a powerful tool that can help organizations of all sizes streamline their shipping operations. By providing visibility into the entire shipping process, a TMS can help you reduce costs, improve efficiency, and increase customer satisfaction.
It is a vital piece of software for any business that ships physical goods. A good TMS will automate many tasks and make your life easy. So, if you’re looking for a way to improve your organization’s shipping operations. A TMS is a good place to start.
Thanks for reading!