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September 12, 2018

5 Tips to Identify the Right Transportation Management System



If you are into retail, distribution, manufacturing, e-commerce or suchlike business, you would know the importance of planning and executing the physical movement of goods. This highlights the importance of the Transport Management System (TMS), without which foolproof delivery of goods is well nigh impossible.



TMS, in a nutshell, is a logistics platform that helps in managing and optimizing daily operations of transportation fleets. It is a subsidiary of Supply Chain Management and is an essential requirement for the smooth-running of most businesses.  

Need for TMS

In the present day fast-paced business environment, your ability to deliver the product to your customers in the quickest possible way will dictate getting future business from them. This is the reason why overhead shipping costs now exceed even the essential costs, such as utilities or payrolls, both direct and indirect.

A recent study carried out by Pitney Bowes supports this. In its report, it states that there will be a rise in parcel shipments at a rate of 17 to 20 percent between 2017 and 2021. As far as the logistics costs are concerned, they are set to increase up to 50 percent by 2020. 

The spiraling shipping costs have made TMS crucial, not only to keep the burgeoning shipping costs in check but also to avoid compromising on the overall service quality. There are many types of TMS solutions, so you will need to find the one that serves your purpose.

Five tips for identifying the right TMS

#1 Be capable of analyzing financial aspects

The right TMS helps in analyzing the financial aspects of each logistical route. It provides suggestions for reducing expenses by minimizing factors, such as fuel consumption and driver overtime. What’s more, it does so with minimal paperwork. This saves both time and money on bulky paperwork. Not only this, it also reduces administration expenses and incorrect billing and invoice errors, thus giving a fillip to overall efficiency.

#2 Integrating smoothly with existing systems

The right TMS smoothly integrates with the existing systems currently in use for managing the transport needs of your company. The existing systems may include customer relationship management, purchasing and order management systems, supplier relationship management and warehouse management carried out by scalable and automated 3PL freight software.

Not only this, TMS also helps in monitoring the lifecycle of orders and shipments in real time and also provides updates. This enables timely action regarding depleting inventory and makes the supply chain network more accountable. Such integration makes planning and execution quicker and without a glitch.

#3 Flawless routing

Since the shipment sizes have shrunk and order cycles shortened, routing becomes a critical aspect. The right TMS implements pool distribution that works out to be faster and cheaper for delivering goods. In this, complex orders are broken down, shipments are prioritized and best routes are selected. It also has greater visibility and control.

This overall visibility enables you to assess the optimality of routes taken by the drivers. TMS not only helps in keeping an eye on the drivers by tracking them and gauging their efficiency, but also in highlighting ways for further improvement.

#4 Supply chain visibility

The right TMS provides a bird’s eye view of the whole supply chain system. Equipped with full operational visibility and real-time data enables speedy action in resolving any issues that may arise, as also for seizing any opportunities. This also improves accuracy in shipping facilitated by real-time tracking and full supply chain visibility. This, of course, will be huge plus in the eyes of your customers.

#5 Improving customer experience

Fast delivery impresses customers. However, taking this a notch higher by catering to last minute order changes and customized delivery will make the customers patronize your business. Of course, achieving this is no cakewalk, but TMS, especially the new generation tier-1 TMSs, enables you to bridge the gap between order management and warehouse management systems, thereby improving customer experience.

Conclusion

In the ever-changing business environment, TMS has become an indispensable tool for improved business practices and deliverance. The right TMS offers to enhance your company’s overall efficiency and productivity, and prevent shipping errors and discrepancies. This, in turn, will attract customers and get you repeat business.



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