A transportation management system (TMS) helps companies move freight from origin to destination efficiently, reliably, and cost effectively. There are many benefits that a robust TMS can provide, but the main reason most companies implement a TMS is to reduce freight spend. A good transportation management system will include analytics and data to help reduce expenses such as driver overtime, fuel, and inefficient routes.
While reduced transportation spend is generally the largest benefit of a TMS solution, benefits such as service level improvements, increased market share due to customer service improvements and inventory reduction processes should not be overlooked. Some additional benefits include:
- Increased visibility—Today’s supply chain managers need to make quicker decisions based on real-time data. With increased visibility, companies become more agile and more responsive to changes. An integrated TMS can provide end-to-end supply chain visibility; enabling better inventory forecasting and better accuracy and streamlining throughout the entire process.
- Improved customer service—TMS reporting and analytics enable you to monitor on time performance, track shipments, and identify service failures. This information can be used to upgrade and improve your service and support efforts, resulting in overall increases in customer satisfaction.
- Efficiency and productivity in operations—TMS systems enable companies to centralize the logistics function, providing support across the entire organization by synchronizing processes and eliminating bottlenecks in the system.
- Real-time tracking of drivers—One of the biggest benefits is the ability to gather data about how much time specific routes take in order to build a more efficient schedule.
- Streamlined billing processes—A good transportation management system will allow you to automate most, if not all, processes. The amount of time you’ll save on paperwork alone could make transportation management software worth the investment.
- Greater collaboration—A critical piece of the TMS solution is its capacity to connect the many partners that have input on the freight movement process. With increased collaboration, supply chain partners are able to identify opportunities not just for their business's own units, but opportunities that affect the entire supply chain.
Transportation needs change with time, as do a company’s requirements for its logistics and supply chain management. It’s tough to be competitive with pen-and-paper operations, which means it’s becoming increasingly important to adapt to and incorporate the technologies that are making the difference between lackluster and industry leading operations.
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by SBS Group