Transportation management software
What is transportation management software?
Transportation management software (TMS) plays a key role for shippers in the era of digital logistics. But what is a TMS? What features does it offer? And how can businesses benefit?
Transportation management software (TMS) – sometimes also called a transport management system or transportation management program – is a software solution for managing logistics processes. It helps optimize the physical movement of goods.
A TMS includes transport planning and optimization. It also covers transport execution and supply chain visibility.
Control tower monitoring is part of it too. Additionally, it manages freight costs, including freight purchasing. Finally, it handles internal accounting and reporting.
Transportation management software is an important part of the supply chain system. It usually works together with enterprise resource planning (ERP) and warehouse management systems (WMS).
Strong transportation management software helps businesses plan and carry out transports more efficiently. It reduces admin work and errors. This software also lowers shipping times and costs, leading to better customer satisfaction.
Key features of a TMS
Transportation management software supports transportation management through five key processes centered around planning, execution, and optimization:
Planning, decision-making, and optimization
A TMS improves transport planning by using set rules based on user choices. It focuses on factors like transport cost, lead time, number of stops, and environmental impact. The next step is then to execute the planning.
Transport execution
A TMS supports the complete execution of the transport planning. It manages and improves transport operations by working with carriers and parcel services. It combines execution with planning, optimization, and visibility. This approach helps create a foundation for full automation and ongoing improvement.
Supply chain visibility and control tower
TMS solutions offer visibility across physical and administrative operations associated with transports and shipments. This includes tracking transport events. A TMS can manage receiving, customs clearance, invoicing, and booking documents. It can also send transport alerts for delays or unexpected incidents.
Freight cost management
Transportation management software helps manage and improve all freight cost processes. This includes calls for bids, purchasing, and managing carrier rates. It also covers invoice auditing and billing.
Measurement
A TMS includes different reporting and analytics tools. These tools help generate and analyze key performance indicators (KPIs) for transport and logistics. Some typical KPIs:
- Percentage of on-time pickup and delivery services
- Cost per unit of measure: kilometer, kilogram, container, pallet, etc.
- Productivity in monetary terms: cost per unit, weight, shipping unit, etc.
- Productivity in operational terms: shipping units per order, weight per load, etc.
Typical TMS features
- Planning and optimization of multimodal transport chains
- Selection of inbound and outbound transport methods and providers
- Assignment to transport companies (road, rail, air, sea)
- Real-time supply chain visibility
- Service quality monitoring using KPIs
- Order consolidation and route optimization
- Transport cost and planning simulation
- Freight cost management
- Cost oversight, KPI reporting, statistical analyses
- Freight billing
Who needs a TMS?
Each segment has its own needs. However, all these businesses share something in common. They ship or manage large amounts of goods.
They also handle high-value items. Additionally, they participate in complex transport or supply chain networks. They also often have complex processes with a wide range of transport modes, routes, and transport partners.
TMS in the cloud: What are the benefits?
For a long time, transportation management software was a major expense, feasible only for large enterprises. Today’s licensing models, such as cloud-based solutions, have made TMS technology affordable for many smaller companies too.
Analysts watching this trend predict that the market for cloud-based TMS solutions will experience strong growth in the coming years. So what benefits does the cloud bring to TMS tools? Four main points stand out:
- Scalability: The cloud infrastructure allows businesses to adapt the software to their transport needs.
- Real-time updates: A cloud TMS updates in real time. This gives users quick and easy access to the latest features and improvements.
- Flexibility: A cloud TMS makes businesses more flexible overall without the need for major investments in IT infrastructure.
- Collaboration: A cloud TMS makes it easier to work together and enables global access to key logistics data.
In a nutshell
Transportation management software (TMS) can generally help businesses optimize transport and supply chain processes, cut costs, and boost productivity. That’s why it’s so important to choose the right TMS and provider. Getting this right ensures that you get the best possible solution for your unique needs.
Taking your first step toward flexible, efficient transportation management software is easy.
Arrange a no-obligation appointment with our AEB experts for transport management software and systems
