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Posted by Stephanie on June 10, 2024

To manage a warehouse effectively, you must handle the logistics of the items that are stored there. Making sure your goods reach their intended destinations efficiently is necessary to keep your customers satisfied and loyal. If you don’t have a comprehensive transportation plan in place, there’s a higher chance that you’ll encounter logistics delays and costly roadblocks.

You can plan, optimize, and execute your primary logistics tasks with Transportation Management System (TMS) software. TMS software uses sophisticated technology that can help you manage the incoming and outgoing movement of your goods. You can also use this software to ensure your shipments are wholly compliant with industry regulations. TMS software is often a smaller part of a supply chain management (SCM) system. In this guide, you’ll discover “What is TMS in logistics?” and what it can do for your warehouse.

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What is a TMS?

A transportation management system (TMS) is a type of logistics platform that streamlines the process of shipping goods to and from the warehouse. These systems provide real-time data that you can use to make immediate decisions about your day-to-day transportation operations.

They also provide you with the trade compliance documentation and information you need to ensure your shipments are legal. It’s possible to plan, execute, and optimize the movement of your goods by sea, truck, rail, or air with a TMS.

This software is often integrated with other systems like WMS and ERP. A warehouse management system (WMS) allows you to more effectively organize your warehouse operations, control your inventory, and handle order fulfillment. As for Enterprise Resource Planning (ERP) software, this system allows you to manage all business operations from one platform.

Key Functions of TMS

Transportation management systems offer numerous features that you can take advantage of to enhance the efficiency of your logistics tasks. You can use this software to organize and centralize all transportation data, which should help you:

  • Plan and forecast the needs of your network
  • Perform route optimization, load planning, and carrier selection
  • Track and execute your shipments
  • Automate specific processes, such as load booking and tendering
  • Cost efficiency and strategic planning
  • Real-time tracking and visibility of shipments
  • Analyzing transportation data for continuous improvement
  • Automating processes to limit manual work and errors
  • Create comprehensive reports for network KPIs

Benefits of Implementing a TMS

Implementing TMS software into your operations can be highly advantageous for your facility’s performance as well as your company’s bottom line. The main benefits of this software include the following:

  • Significant cost reduction for your business as well as the end customer
  • Better contract negotiations and avoidance of billing errors
  • Minimizing empty miles by optimizing routes should help you save on fuel costs and improve fleet utilization
  • Comprehensive supply chain visibility and real-time tracking of shipments
  • Enhanced customer service
  • Simplification of all supply chain processes across carriers and geographies
  • Better decision-making
  • Proactive management of disruptions and delays
  • Improved communication with customers
  • Timely and accurate deliveries, which can lead to higher customer satisfaction
  • Comprehensive business insights because of better reporting

TMS software should help you reduce costs considerably. This software can optimize your destinations and shipping routes, which will make your drivers more efficient and lower your transportation costs.

The other option is to use a vast network of documentation and spreadsheets to keep track of shipping routes, which requires ample manual labor. TMS software allows you to centralize this info for more efficient management. By reducing labor costs and freeing up your employees to handle more complex issues, you can boost your facility’s productivity.

TMS software provides improved forecasting as well. If you ship your products internationally, your supply chain can be complex. TMS software helps you make precise projections when planning shipment routing, pickups, and loading. You should be able to track shipments across multiple timelines with ease. By ensuring timely delivery of your goods, you can increase customer satisfaction.

Users of TMS

Transportation management systems are often used by businesses across numerous industries that need to move, ship, and receive goods regularly. The primary industries that use this software include the following:

  • Manufacturers
  • Distributors
  • Retail storefronts
  • Ecommerce companies
  • Businesses that offer logistics services, which include third-party and fourth-party companies as well as logistics service providers (LSPs)

There are a wide range of different types of companies that regularly ship and receive goods, ranging from small businesses to large enterprises. These businesses include The Home Depot, Target, Trader Joe’s, and Costco.

Companies in practically all industries can benefit from a transportation management system. Whether you manage a life sciences company or an office supplies business, you should consider implementing TMS software.

Integration with Other Systems

As touched upon previously, TMS software is usually integrated with WMS and ERP systems for streamlined operations. For example, you can use a transportation management system to handle the movement of all freight to and from your warehouse. A warehouse management system (WMS) is useful for controlling inventory and operations. Enterprise resource planning (ERP) software integrates data from different parts of the organization to provide a comprehensive overview of your business and its deficiencies.

Analyze the information that these systems collect to determine how you can improve your operations, reduce costs, and keep your customers satisfied. Keep in mind that seamless data exchange between these systems is only possible through API connectivity. You’ll be able to monitor all components of your supply chain and improve your business once you install every part of the system.

Choosing the Right TMS

To choose the right TMS for your facility, you must first assess your business needs and the complexity of your supply chain. If you have a highly intricate supply chain that involves global deliveries, consider opting for a TMS provider that can accommodate a growing company. Evaluate TMS providers based on factors like scalability, customer support, and industry experience.

You can rely on TMS providers that have great reputations and high ratings on websites like the Better Business Bureau. Make sure the TMS you select can be properly integrated with WMS and ERP systems. Future-proofing with advanced technologies like IoT and AI is also highly important.

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The Future of TMS

TMS software has a bright future. From artificial intelligence and machine learning to the Internet of Things (IoT), there are numerous emerging technologies that should enhance TMS software solutions. Modern customers expect on-time delivery and real-time updates. You’re also tasked with managing the constant changes that occur with global trade regulations. While existing TMS solutions offer many benefits, the software must become more advanced over time. Transportation management systems need to be feature-rich and scalable.

Consider the advantages of using IoT fleet monitoring technology in your warehouse. IoT sensors and devices accommodate real-time monitoring, which can help you reduce your maintenance and fuel costs. You may also be able to prevent delays and bolster driver safety.

A combination of IoT, AI, and machine learning allows for better predictions and constant system monitoring. Machine learning can be applied to historical trends and data, which will help you plan capacity, discover at-risk shipments, and predict transit time. If you find goods that are about to expire, you can remove them from your inventory before they’re packaged and shipped to customers. Artificial intelligence should help you locate alternative delivery routes when traffic is high.

Digital assistants have also become increasingly popular in recent years. Data-driven chatbots can provide immediate responses to customer queries about their orders, which should lead to higher satisfaction and better retention rates.

Consider blockchain technology as well. This type of system is designed to record transactions in a peer-to-peer network. However, you can use blockchains to create comprehensive integrations with customers, carriers, and shippers. You may be able to provide customers with more transparent and intelligent tracking capabilities.

Blockchain technology also allows for cold chain management, which can be helpful when you need to maintain products at different temperatures throughout the supply chain. Let’s say that you’re storing goods that should be shipped at cold temperatures but stored on shelves at elevated ones. Cold chain management allows you to monitor temperatures at every stage of the supply chain. You’ll receive real-time information that allows you to make quick decisions. There’s also a possibility that self-driving trucks will allow for more efficient last-mile delivery.

Conclusion

TMS software can help you optimize your logistics and supply chain operations. By reducing delays and improving transportation efficiency, you can maintain customer satisfaction and grow your business. To stay competitive and meet rising customer expectations, invest in a powerful TMS that you can integrate with your ERP and WMS systems.

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