In today’s world, companies operate in an increasingly competitive environment. Globalization and ecommerce add to the complexity. Supply chain efficiency has always been helpful, but under current conditions, it is an absolute necessity.
Organizations must constantly evaluate what is working and understand the failures as well as inefficiencies. They must make constant improvements to survive and thrive within these circumstances. However, effective supply chain assessment is near impossible unless the business has a clear and consolidated view of the process.
This is the value of transport management systems or TMS. They collect and store real-time data from across the supply chain enabling unprecedented network visibility. Keep reading to find out how they enable constant analysis for improved performance.
And when you’re finished reading, check out the other articles in our ‘Shipper TMS’ series:
- How can TMS integration benefit shippers?
- Guide to buying the right shipper TMS for your business
- Best TMS providers for shippers
What is TMS integration?
TMS enables businesses to optimize the end-to-end movement of goods. It coordinates and streamlines cargo movement across the supply chain, ensuring real-time visibility. This leads to more efficient transport planning and improved customer service, helping businesses to grow.
A TMS serves as a store for detailed data about carriers and a source of communication. It is a transactional service for the planning and execution of shipments. The system must, therefore integrate with carrier systems for the download of external data.
It must also allow for customer order entry. The orders will often come from integrated enterprise resource management (ERP). Shipment information is then fed back into the ERP to close the supply chain loop.
How does TMS integration work?
Transport is a primary supply chain process. It comprises a number of activities from carrier movement to delivery plans and shipment tracking. It often involves complex inter-modal movements all of which must be managed and controlled.
In a small business with few shipments, it is possible to manage these activities on spreadsheets. As the business grows, transport-related activities become more complex and specialized software becomes a necessity.
TMS coordinates the transport of goods throughout the supply chain. All members of the supply chain, from producers to distributors and third-party logistics providers can use it.
An effective TMS provides real-time data on the location of the goods at any given time. Managers use the data to optimize the supply chain through the analysis of individual performance throughout the system.
Most TMS can integrate with Warehouse Management Systems WMS and ERP. Some systems will also integrate with fleet management software. Managers can choose on-premise or cloud-based systems.
What are the key functions of TMS software?
TMS organizes and coordinates transport data. This allows companies along the supply chain to get a synchronized view of performance from a day-to-day and overall perspective.
The main functions of a TPMS are listed below:
- Carrier management
- Procurement
- Load and route planning
- Load execution
- Freight tracking
- Payment
- Performance reporting
How much does a TMS integration program cost?
A TMS integration program can cost anything from $10,000 to $250,000 for the license. How much you end up paying will depend on the system architecture, the more complex the system the more you’ll pay.
Most TMS programs also come with an annual maintenance cost. This cost is typically a percentage of the initial outlay.
5 top benefits of TMS integration for shippers
For shippers, there are many advantages to using an integrated TMS. These are the top five.
Cost reduction
Freight costs have been growing rapidly over the last two years, which has become a significant cost for relevant companies. A TMS provides insight into the total supply chain cost so managers can analyze where the money is being spent and explore cost reduction opportunities.
Additionally, the system saves on administration as it automates many mundane tasks. Distribution and warehouse costs are also reduced as improved fleet management and supply coordination result in better space and labor use.
Increased revenue
TMS has a powerful reporting system allowing you to analyze your supply chain performance. This means that you can compare the delivery outcomes for various players in the system and make decisions that will enhance your overall delivery performance. Happy customers will keep returning, generating improved revenues.
Improved efficiency
TMS gives shippers better access to information to improve their operational movements and streamline their systems. They can use the information to consolidate loads and plan more fuel-efficient transport. All of this is made possible through shared information and integration across the entire supply chain.
Offers customer-compatible rates
Every TMS has a rating engine. This allows you to store your agreed carrier rates on the system so that you can compare shipping options and select the most efficient option for your cargo. The system enables the comparison of the most up-to-date costs across carriers and marketplaces because everything on the system is recorded in real-time.
Simplicity
TMS connects to the cloud, but it is also able to connect with IoT devices. From there, you can begin tracking your vehicles and your cargo, offering unprecedented supply chain visibility through real-time tracking. This simplifies processes and helps to keep track of fleets on a day-to-day basis.
TMS: Your key to cost-cutting and customer service
As technologies play an increasingly important role in supply chains, companies that fail to adapt to the changes will find it difficult to compete. The adoption of the best transport management system is an investment into your company’s future. It provides the visibility that will reduce costs and improve customer service, ultimately benefiting your bottom line.
FAQ
A TMS portal is a web portal through which your customers can track and manage their cargo across the supply chain in real-time.
A TMS should have data analysis and reporting features that you can use to compare carrier price and operational performance.
There are five main modules in a TMS. These are order management, freight management, transportation, manufacturing and analytics, and reporting.
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