Centralized management is crucial to optimizing any operation—especially for an industry with as many moving parts as logistics and supply chain management. For example, there are in- and outbound deliveries to track, new shipments requiring scheduling and carrier selection, and invoices to process and audit.
Implementing a transportation management system (TMS) will help you streamline these workflows and gain data-driven transportation insight to realize further efficiencies.
But what types of insights and further benefits do transportation systems provide? In this article, we’ll cover everything you need to know about TMS platforms.
What is a Transportation Management System?
You may have heard that TMS integration can have a significant impact on your business, but what exactly is a TMS? A TMS is a software platform your business can leverage to manage all your logistical processes revolving around:
- Scheduling and selecting carriers – The shipping industry contends with fluctuating transportation pricing because of available truck capacity, changing routes, fuel costs, and other variables. When you schedule a new shipment, your TMS will provide currently available delivery options and pricing from different carriers to help you select the best option (i.e., modal optimization).
- Tracking and notifications – When inbound shipments are in transit, you need visibility to plan upcoming personnel and resource scheduling to receive and process the items. For outbound cargo, you’ll still want visibility to ensure the shipment arrives on time and undamaged to maximize customer satisfaction.
- Invoicing – Organizing and managing your carrier invoices consumes significant bandwidth with regular shipping activity. Centralizing and automating invoice management will reclaim valuable time and open opportunities for new optimizations. Furthermore, if you lack invoice visibility and parcel auditing capabilities, you’ll miss opportunities to submit refunds or determine negotiation leverage regarding carrier contracts—potentially losing substantial savings.
- Documentation – Shipping invoices aren’t the only documents you need to organize. There are also carrier contracts, individual bills of lading, compliance documentation, training materials, and e-signed forms.
- Data analysis and reporting – These processes involve distinct key performance indicators (KPIs) and metrics that help you determine your successes and areas to improve.
Because of these capabilities, TMS software platforms are essential management and workflow hubs for any logistics and supply chain ecosystem.
Are TMS Platforms and Warehouse Management Systems (WMS) Different?
TMS platforms and warehouse management systems (WMS) fit different business needs for companies managing complex logistics.
The easiest way to think of these two solutions is that your TMS primarily oversees in- and outbound transportation involving third-party partners (e.g., your suppliers and customers). In contrast, your WMS primarily manages internal logistics operations centered around supporting inventory, distribution, and fulfillment (e.g., “your warehouse to your store shelves”). So when thinking about “what is a warehouse management system?”, think of it as warehouse inventory control of what goes in and out.
Until shipments arrive at your facilities and following their departure, you’ll utilize a TMS. While they remain within your own facilities, you’ll utilize a WMS.
However, confusion can arise when companies operate out of multiple locations and transport inventory between them—especially if you rely on third-party logistics (3PL) and carriers for those shipments. There will likely be some functionality overlap between the platforms in these instances. When done effectively, third-party logistics can be beneficial. If you’re curious about why use third-party logistics, you can learn more about it to determine if it’s right for your business.
Do You Need a Cloud-Based Transportation System?
On the surface, cloud-based TMS solutions may seem applicable only for businesses operating out of multiple and dispersed facilities. One of cloud platforms’ primary advantages is facilitating access to computing and data from any location, which strongly meshes with geographically distributed operations.
However, cloud platforms also provide quick and seamless integrations with your other platforms (e.g., WMS) and enterprise planning resources (ERP). So, cloud platforms will likely be necessary for building any connected logistics management ecosystem.
A cloud-based TMS solution will also provide additional advantages and freight cost-saving opportunities through:
- Seamless scalability to grow with your business
- Quick implementation and training periods
- Automatic updates and patches
- Eliminating on-premise hardware requirements
Integrate Your TMS with Shipware
Your TMS solution is a crucial resource for transportation planning and managing all your in- and outbound shipping needs. Still, it’s not the only platform for providing substantial benefits to the freight and logistics side of your business.
Integrating Shipware‘s platform that provides optimization transportation insight and auditing will help you uncover opportunities to realize greater efficiencies and savings—like a 10-30% reduction in parcel and LTL shipping expenses.
We also offer consultancy services for important business junctures that affect long-term operational planning and budgeting, like carrier contract negotiations.
Book a demo today to find out where Shipware can help you save.
Sources:
- G2. Best Transportation Management Systems. https://www.g2.com/categories/transportation-management-systems-tms
