Your transportation management system (TMS) is there to connect every aspect of your supply chain, so you can fulfill customer orders and meet market demands timely and effectively. The right TMS will improve transparency, service, connection, communication, forecasting, reporting, and decision making to improve your business operations.
Not all transportation management systems will offer the same services and benefits. So what should you look for in your TMS that's going to show strong results and success?
In this blog post, we explore the key TMS benefits that will push your business to the next level with efficiency, scalability, and transparency.
What Is a TMS?
A transportation management system (TMS) is a software that connects internal and external processes for the logistics process. The TMS helps facilitate the interactions between enterprise management systems and warehouse systems, as well as cultivating a network of shippers and carriers throughout the supply chain. It functions as the primary hub for executing transportation operations as well as organizing all logistical needs for a business or delivery carrier.
A TMS software will often provide services like route planning, load optimization, freight audit and payment, invoicing, advanced shipping, order visibility, track and trace, carrier management, customs clearance, transport alerts, and measurement of KPIs.
Learn more about transportation management systems, the tech every LTL shipper needs.
TMS Benefits
- Plans and optimizes route efficiency
- Streamlines vehicle load optimization
- Collects vast amounts of data
- Reports and analyzes data
- Assists in financial planning and strategy
- Reduces freight expenses
- Offers freight negotiation
- Provides scheme simulation
- Assists with transportation provider selection
- Acts as a network hub for supply chain
- Offers access to the transport industry best practices
- Tracks and traces shipments
- Enhances supply chain transparency
- Develops operational efficiencies
- Minimizes loss, damage, and errors
- Improves customer service and communication
Key Components of a Strong TMS
Not all transportation management systems are created equally. You can get "good" TMS systems, or you can get incredible ones that will enable your business to grow exponentially. If you're making the investment in a TMS, why not go for exceptional right off the bat?
Here are the essential aspects of a TMS that are truly unique. If your TMS has these capabilities, then you've got a system that will bring you on the path towards a future of growth and progress.
Cloud System
Today's most advanced logistics systems are hosted in the cloud.
A cloud-based TMS is offered as Software as a Service (SaaS) that can be accessed online from a remote location. This is by far one of the best TMS benefits. The fact that the user does not have to host the server themselves makes this a less capital intensive and easier to implement option that also allows for continuous and seamless upgrades with each new version of the software. This kind of accessibility—powered by a cloud delivery model—enables a high level of scalability and growth.
Blockchain Connectivity
Blockchain technology connects every partner to the processes they need to be able to monitor as a team. Fortunately, blockchain tech has also begun to play a rather central role in most modern TMS platforms.
TMS platforms that make use of the blockchain allow for every movement, transaction, and detail of data that is recorded in the cloud be made available for all stakeholders to access. The blockchain is a fast, secure way to pull together all partners for a high level of transparency in the supply chain. It allows for less friction, faster invoicing, fewer errors and losses, better timelines, and a heightened analysis of goods movement.
To stay ahead of the curve (or event at least to stay up with the times), your TMS should be blockchain accessible. Learn more about the future of blockchain and how a TMS benefits your supply chain.
System Integrations
Your TMS should be able to communicate with all of your other logistics systems, like your order management system (OMS), enterprise resource planning (ERP), and warehouse management system (WMS). These all work together to ensure you can deliver on customers' orders effectively and efficiently. All management systems have to work in tandem to streamline the process; otherwise, you end up running into even more roadblocks and inconsistencies along the line.
The transportation management system is often the "missing link" for supply chain management. Warehouses have systems and businesses that have systems, but it's the in-between transport that ties it together to make sure goods are delivered from A to B with success. That's why your TMS needs to be able to integrate and evolve with your other management systems, operating as the central hub of intellect. Without it, critical portions of the supply chain remain trapped in siloed systems with limited visibility.
The goal is total transparency and connectivity.
Note: Transportation management systems that can link to blockchain tech often also offer a lot of integration options.
AI and Machine Learning
Artificial intelligence is coming to TMS and other management systems, and it's revolutionizing operations. Not only can transport systems connect through the cloud, but machine learning can also analyze and leverage a tremendous amount of data within seconds.
AI helps identify issues in real-time while offering recommendations for decision making. It can also enhance forecasting in terms of inventory, transportation, and production plans. This enables a faster fulfillment of customer orders and greater transparency along the supply chain, which radically enhances the customer experience. Machine learning is also utilized to efficiently utilize company assets, resulting in fewer losses, greater safety, and higher profit margins.
Logistics Partnership
A lot of companies are opting out of the rigorous (and often unsuccessful) process of attempting to implement a transportation management system all on their own. Instead, smart organizations are choosing to work with a trusted logistics partner. Redwood's TMS implementation approach handles the heavy lifting, ensuring strong and effective implementation while also improving service in both the short- and long-term.
When working with a cloud-based TMS through a 3PL, you get access to a wide array of software across multiple clients. This reduces costs while also improving AI operations that are used for your business. You only have to pay for the software you need, while still tapping into some of the industry's leading information and operations. See how organizations achieve measurable results through our case studies.
Final Thoughts
Implementing a cloud-based TMS isn't easy, but it's crucial in order to have a comprehensively connected system internally and externally. A TMS can allow for the highest level of transparency, which improves daily operations, reduces costs, minimizes errors, and streamlines operations.
You don't have to make the decision or do the implementation on your own, though. Working with a trusted partner for your TMS ensures you get the most connected service, with a successful launch—and that nothing falls through the cracks.
FAQ
What is a TMS and why do I need one?
A transportation management system (TMS) is software that connects internal and external logistics processes across your supply chain. You need a TMS to improve transparency, reduce freight expenses, optimize routes, track shipments in real-time, and make data-driven decisions that enhance your overall business operations.
What are the main benefits of using a TMS?
Key TMS benefits include route optimization, load planning, enhanced supply chain visibility, reduced transportation costs, improved customer service, real-time tracking, better carrier management, and access to advanced analytics. A strong TMS also minimizes errors, streamlines operations, and supports scalable growth.
Should I choose a cloud-based TMS or an on-premise solution?
Cloud-based TMS solutions offer significant advantages including lower upfront costs, easier implementation, automatic software upgrades, remote accessibility, and greater scalability. They operate as Software as a Service (SaaS), eliminating the need to host servers yourself and allowing for continuous improvements without major capital investment.
How does a TMS integrate with my other business systems?
A strong TMS should integrate seamlessly with your order management system (OMS), enterprise resource planning (ERP), and warehouse management system (WMS). These integrations ensure all systems work together to deliver customer orders effectively while maintaining complete visibility across the entire supply chain.
Do I need to implement a TMS on my own or should I work with a partner?
Many organizations find greater success working with a trusted logistics partner for TMS implementation. A TMS partner handles the complex setup, ensures effective integration with existing systems, provides ongoing support, and gives you access to advanced features and multi-client networks that reduce costs while improving operations.