What is a Transportation Management System?
Efficient delivery and distribution services that help to serve customers better and in a timelier manner are key to the functionality of many businesses today. In an attempt to bridge the operational gap in the logistics industry, it's important to have a transport management plan on the ground, and that's where a transportation management system (TMS) comes in.
A TMS is a logistics platform that integrates several technologies to aid businesses through the planning, execution, and optimization of the physical movement of goods, both internally and externally. It helps ensure that a shipment is in compliance with the orders and that proper documentation is produced.
Essentially, the supply chain is the lifeline of logistics and lifecycle management. For the supply chain to thrive, a transportation management system needs to help with the planning and procurement process, ensuring that there's an integration of data, access, and visibility to make up a powerful system that results in greater customer satisfaction.
This process will in turn lead to higher sales, which summarily is the aim of any business. TMS is important because it helps businesses stay relevant in the present dynamic trade system that we have right now.
Who Makes Use of a TMS?
Transportation management is useful to a wide range of businesses in different industries. Primarily, businesses that require shipment and movement on a daily basis will benefit from TMS. Some of them include:
- Manufacturers
- Distributors
- Ecommerce companies
- Retail business owners
- Logistics service providers
In several ways, the transportation management system touches several businesses in varying industries, and its availability has made it easier and cheaper to utilize and take advantage of.
The Advantages of a TMS
The key elements of a TMS include planning, execution, and optimization of the physical movement of goods, which can have benefits in the following ways:
Planning and Decision-Making
TMS uses real-time data and insights to make the most relevant reports available to carriers in one spot, ensuring better visibility across all systems. With TMS, business leaders and management companies can plan and make quicker decisions regarding their supply chain needs and distribution services.
Quick Execution of Plans
TMS also makes it easier for the management of businesses to create and execute better strategies. Since the system automates and monitors most logistics activities, it gives access to dispatch and carrier rate information, which will help the management team make more informed decisions.
Visibility
Integrated transportation management allows carriers to easily track their shipment and obtain insights and visibility of the entire process. Visibility helps to keep business owners, management teams, and shippers in the loop of the activities of the freight.
Measurement and Reporting
TMS is key to providing several reports on the measurement of distribution networks through Key Performance Indicators (KPIs). This will help carriers and distribution networks measure and report the various attributes of the supply chain system.
Risk Management
Businesses that transport hazardous materials will always be at risk of compliance and public safety. However, TMS can help to ensure that the strict rules are adhered to as much as possible and that there's safety for the carriers and recipients.
Integrated transportation management systems can manage risks by evaluating the safety compliance rules, ensuring that they're properly followed, automating processes, and ensuring due diligence in every affected area.
How to Select and Implement a TMS
Transportation management systems present key benefits to carriers in the entire supply chain system. However, this is subject to when companies ensure due diligence when selecting the TMS case. Here's a step-by-step system you should consider:
1. Identification of System Environments
First, identify your entire supply chain network. This will ensure that you look into your transportation needs, your execution and staffing costs, and every other component of your business process.
Mapping out your business process ensures that you identify the systematic environments that can give you an appropriate process map, and a network of challenges that need to be tackled.
2. Detailed Comparison of Standard and Web Services Integration
For your supply chain service needs, you have the options of standard service integration or web service integration. A detailed comparison of the two integrated transportation management systems regarding your business needs helps to make a well-informed decision.
Standard service integration entails several standard operating procedures that are established through defined roles and responsibilities, processes, and documents, all in an attempt to cover the TMS cases. On the other hand, web service integration involves a dynamic approach to integration through open internet technologies and universal protocols.
3. Set Realistic Integration Goals and Timelines
This is a very critical stage of the process. Here, you finalize the plans according to an established roadmap for present and future work. Ensure that the integration goals are realistic and that they reflect your organizational strategy. Also set realistic timelines for the implementation process, remembering that there'll be the need for the team to understand the proper use of the new elements.
4. Reserve Resources for Integration
Resourcing is also very important. This is the phase where costs are locked in, and ROIs can be projected from the benefits of TMS implementation.
5. Follow the TMS Provider's Integration Steps
A TMS will help to identify the best mode of shipment, best carrier, route, efficiency, and distance measurement to work with, but it's also important that you follow the provider's factory instructions to get the most out of the integrated transportation management.
6. Use the Testing Environment
Identify the useful test cases, document them, and review them from time to time. This ensures that you not only use a system that works for your supply chain but also get operators and partnerships that can give quick access to the components of the TMS.
7. Continue with Certification
There are several logistics and supply chain certifications that you can pursue as an industry professional. The APICS, CLTD, CSCMP, ISM, and much more help you to learn more about your organization's supply chain analysis and your end-to-end system, leaving you and your team relevant in the expertise field.
8. Obtain Production Access
There's a lot of work that's involved in the implementation process. Ensure that you obtain the necessary production and compliance access to be able to configure your environment across several platforms and systems.
9. Educate Your Team on the System
The team plays a key role in how the integrated transportation management systems and supply chain work. Ensure that you regularly communicate through meetings and training to have your team on board at all times. Take your team members through all the project planning, gaps, resources, and every step of the supply chain system.
10. Update as Needed
Optimize the system from time to time, and ensure that you invite external expertise to help you ask the right questions to ensure that your business expectations meet reality. Measure and track your performance, use reports to identify any gaps, and plan for any challenges that customers may experience.
Creating and implementing a transportation management system can be a long and complex process to go through, especially if your business isn’t properly equipped to handle it in-house. A third-party last-mile logistics partner like Ziing can properly handle your TMS needs while offering your business a cost-effective solution.
The Future of the TMS
The transportation management system is hinged on providing maximum customer satisfaction with the least amount of input and effort. As the years go by and customer expectations continue to rise, there's more pressure for the improvement of integrated transportation. The ever-evolving global trade policies are also another reason why supply chains have to keep innovating and investing in integrated transportation management.
Transportation management systems of the future will have more features, integrate new aspects of machine learning, and provide visibility for a better customer experience through:
- IoT fleet monitoring for improved real-time information
- Digital assistance to a better communication system
- Adaptive intelligence and machine learning for more accurate information and recommendations
- Blockchain technology for working on complex integrations among all parties
Conclusion
Now more than ever, integrated transportation management, through transportation management systems have made supply chain and distribution solutions more accessible and flexible.
As a result of TMS, everyone involved in the supply chain - the business owners, management team, shippers, customers, and end users - now have access to real time data and information, all of which have a positive impact on the growth and efficiency of the transportation management industry.
If you intend to take advantage of the benefits of integrated transportation management systems for your supply chain, contact us today at Ziing to learn how we can help.
