What is a Transportation Management System?

A transport management system (TMS) is a division of a supply chain management system that focuses on all matters concerning transportation operations. By implementing a TMS, a transportation company can move freight reliably, efficiently and cost effectively. The TMS processes include freight transported inbound or outbound, domestically, or internationally. It can be used in conjunction with assets owned either by the company or an outside provider.

What use would a TMS provide to my business?

There are four key processes that a TMS can provide to a transportation company.

The first is planning and decision making. A transport management system will plan the most efficient transportation schedule. The user can decide the parameters that the TMS works under. This can include scheduling by cost effectiveness, by job importance, by lead-time, or by route.

The second is transportation execution. A TMS will execute the decided upon transportation plan. This means alerting the assigned driver of their job, alerting the customers or recipient that the job is under way and tracking the job until completion.

The third is transport follow up. A TMS has the ability follow up on all transportation operations. This can include traceability of goods shipped, custom clearance, sending invoicing and booking documents, sending transport alerts to the clients or recipients.

The fourth is measurement. When implementing your TMS it is important to programme in your key performance indicators. This way the TMS can send KPI reports. Standard KPI’s include:

• Cost per metric. For example mile or kilometre; weight; cube; pallet;
• Percentage of on time pick up or delivery performance;
• Productivity in monetary terms, for example cost per unit weight or shipping unit;
• Productivity in operation terms.

How can a Transport Management System benefit my company?

A TMS can offer many benefits to a transportation company, including:

1. New Delivery Capabilities

By utilising a TMS you can streamline the way you ship by tracking and planning the best routes, and triaging jobs based on importance. This functionality allows for a more efficient service and schedule so your transportation company can take on more jobs with the time that is saved.

2. Greater Customer Service

A TMS can keep your customers automatically informed of the shipping process throughout every stage. This level of communication will keep the customers happy as they can see where their goods are at all times. It also means the customer will not be calling or emailing requesting status updates. This frees up valuable time for employees.

3. Streamline Accounting

When a job is completed a TMS will automatically close it off and send out the invoice to the client. This will significantly reduce the wait time for payment. Also, by automating payment and auditing services, your TMS can catch inaccurate charges and duplicate payments.

4. Supply Chain Visibility

By linking your TMS with a Warehouse Management System, you can have complete supply chain visibility. Supply chain visibility will allow for better inventory forecasting and a reduced incidence of data-entry errors.

If you have any questions, or are interested in a Transportation Management Solution, please contact our dedicated experts here.

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