A Transportation Management System (TMS) is a software solution designed to help businesses manage their transportation operations efficiently. A TMS Transportation Management System can help businesses optimize their logistics processes, reduce costs, improve customer service, and gain real-time visibility into their supply chain.
How Does a Transportation Management System Work?
A TMS Transportation Management System works by centralizing and automating transportation processes such as shipment planning, execution, tracking, and payment. Transportation Management System software can provide businesses with data that enables insights into shipping rates, carrier capacity, transit times, and route optimization. This allows companies to make informed decisions about their transportation operations and ensure that they are meeting their business objectives.
What Does a Transportation Mangement System Do?
A TMS provides a range of features and functionalities to help businesses manage their transportation operations more efficiently. Some of the key TMS features that enable shippers to organize their data and automate business processes include:
- Carrier selection and management
- Freight rating and billing
- Route optimization and planning
- Shipment tracking and visibility
- Freight audit and payment
- Access to valuable data
The Control Tower Method
The Control Tower method is a logistics management approach that involves the use of a centralized hub (or “control tower”) to monitor and manage all aspects of the supply chain, including transportation, inventory, and production. Transportation Management Systems are often used to support this method.
The Control Tower method with TMS enables companies to streamline their transportation operations, reduce costs, and improve overall supply chain efficiency. By having a centralized view of transportation activities, companies can identify potential issues and quickly adjust to avoid delays and disruptions. This approach also allows for better communication and collaboration between different stakeholders, such as carriers, suppliers, and customers, which can lead to better overall performance and customer satisfaction.
Data Centralization Across Inbound & Outbound Logistics
Inbound logistics refers to the movement of goods and materials from suppliers to manufacturing facilities or warehouses. Using a TMS Transportation Management System, data from various sources such as carriers, suppliers, and distributors can be centralized to optimize inbound logistics. This includes managing transportation routes, carrier selection, and delivery schedules.
Outbound logistics, on the other hand, involve the movement of finished products from the warehouse to the customer. A TMS can assist companies in tracking customer deliveries, managing inventory, and optimizing transportation routes to reduce costs and improve customer satisfaction.
A TMS can integrate with other systems, such as manufacturing, carriers, and distribution, to optimize inbound logistics. Manufacturing generates critical information that needs to be tracked through the entire supply chain, such as GL, purchase orders, and product information, which can be captured and stored in the TMS on a shipment level.
Large shippers usually have relationships with multiple carriers, including LTL, parcel, air, and ocean, and all related information such as rates and tracking can be stored in the TMS. With EDI and API connections, all of this data can be sent to a consolidated system to track the movement of goods from manufacturing to distribution.
For outbound logistics, a TMS can integrate with customer systems and use EDI / API connections to track deliveries and ensure on-time delivery to customers. This integration allows businesses to manage customer relationships, optimize outbound transportation operations, and enhance the customer experience.
Unlock Data & Analytics Capabilities:
The true strength of a Transportation Management System lies in its ability to offer valuable data regarding transportation operations. To fully leverage this powerful data, it must be integrated with other data sources and tools in order to inform better business decisions about transportation operations. By combining transportation data with inventory, supply chain, and other data sources, a TMS can contribute to driving operational improvements and help businesses optimize their transportation operations.
Some Advantages of a Transportation Management System Include:
- Improved access to transportation operations data
- Reduced transportation costs and improved efficiency
- Improved customer service
- Increased productivity and reduced manual processes
When implementing a Transportation Management System, businesses must consider factors such as cost, functionality, and scalability. They should also assess their current transportation processes to identify areas for improvement and determine the necessary features for a TMS.
In summary, a Transportation Management System is a software platform that enables businesses to manage transportation operations more efficiently. The Control Tower approach centralizes transportation data, offering valuable insights into operations. Implementing a TMS can provide significant advantages such as increased efficiency, reduced costs, and improved customer satisfaction.