The name of the game in today's supply chain is optimization. Regardless of the type of industry or customers you serve, finding creative ways of streamlining the operations for optimal efficiency is the objective that senior management often tasks their team. For shippers, optimization is all about creating efficient methods of transporting their goods throughout the supply chain, while ensuring on-time delivery, improving customer communication, without breaking the bank. When you're managing complex shipping operations across multiple carriers and routes, how do you ensure efficiency without compromising service? Believe it or not, all of these objectives can be achieved by way of using a modern transportation management system.
There are several types of Transportation Management Systems (TMS) on the market today, and just as many companies that customize them for unique industries. In this blog post, we'll outline 4 ways that a TMS can streamline the operations of your company, which saves you money, improves customer service, and ensures timely delivery of your commodities.
What is a Transportation Management System?
For those who are not aware, a TMS is a software (usually cloud-based) that facilitates interaction between your order management system, your warehousing or distribution departments, and through the supply chain. What most people don't know is that today's modern TMS's also integrate with CRM systems or Customer Relationship Management platforms, that attach customer interaction within the TMS. The main job of the TMS is to plan shipping routes, finding carriers best suited to the shipment, and processing payment.a0To learn more about how TMS fits into a broader logistics strategy, download our Modern 4PL for Dummies guide.
Beyond these basic services, the TMS offers multiple specific functions that help you optimize your operations. Let's dive into five of the best features of the modern-day TMS.
A typical TMS software includes:
- Route planning and optimization
- Load optimization
- Execution
- Freight audit and payment
- Advanced shipping
- Order visibility
- Track and trace
- Carrier management
Load Optimization
Although the name is rather self-explanatory, the function or meat and potatoes on how it works within a TMS is not as simple to describe. Essentially, the load optimization function—a core capability in platforms offered through Redwood's Modern 4PL approach—finds creative ways of reducing costs through shipping optimization and finding carriers that can deliver your goods quicker. Without getting too technical, the TMS uses complex algorithms to recommend carriers that can ship your goods based on the shipment size, location, and the delivery requirements. Basically, load optimization is designed to find the most efficient way of shipping.
Route Planning
Route Planning, on the other hand, is quite simple to explain and understand. This section factors in your company's overall shipping requirements, such as the volume of shipment, locations of deliveries, and the delivery time requirements to plan your pick-ups and carriers you use to ship your products. Based on your input and the type of TMS you use, this system has the potential of planning your delivery routes to reduce the shipping costs, expedite the shipment time, and improve overall shipping efficiency.
Reporting and Data Analytics
While planning and optimizing deliveries of your shipments is critical for streamlining your operations, it's just as critical to fine-tune and review data analytics. The modern TMS can collect data for each aspect of your supply chain operation and create reporting functions that break down every area of your business. The truth is that you can optimize every shipment and plan it perfectly, but if other areas of your business underperform—whether in payments, customer service, or other areas—all your work will fall flat.a0To see how real companies have leveraged TMS data and analytics to drive measurable results, explore our case studies.
Improved Customer Communication Methods
Several TMS systems integrate CRM solutions that allow you to improve communication between multiple supply chain partners to those involved in the delivery. These systems can set up a desktop, email, or SMS text alerts that let a customer, vendor, or your employees know where the shipment is, the expected delivery time, and alert them to any delays in the shipment. By improving customer service communication, you can improve the opportunity for repeat business. And as the old saying goes, "volume sales and repeat business solves all problems."
The best feature of today's modern transportation management systems is that most of them are cloud-based. This means that you can access them from any location, at any time, and in many cases, from any mobile device. This type of flexibility and convenience permits you to improve your operational efficiency across multiple segments.
Final Thoughts
A modern transportation management system is more than just shipping software—it's a strategic tool that can transform your supply chain operations. From load optimization and route planning to real-time visibility and customer communication, the right TMS delivers measurable value across every touchpoint in your logistics network. The key is partnering with a provider that understands not just the technology, but how to integrate it into your broader supply chain strategy through a Modern 4PL approach.
If you're interested in obtaining a customized TMS for your organization, partnering with a Modern 4PL provider like Redwood Logistics is a smart first step.