What are Transport Management Systems?
Transport Managements Systems (‘TMS’) are software programs that provide a communication medium between a company’s Order Management System (‘OMS’) and the Distribution Center (‘DC’).
A TMS becomes a central hub of communication for the transport aspect of an organization’s supply chain. A TMS hence enables a three-way interaction between the carrier, shipper and ultimately, the customer. Modules offered by conventional TMS systems are load optimization, yard management, carrier management, order visibility, advanced shipping, freight payment and subsequent audit, route optimization and planning, execution and load optimizing.
In order to derive the maximum benefit from a TMS program, an organization should be able to meet the goals mentioned below:
- Cost efficiencies via optimized planning of routes, load optimization and carrier selection
- Improved accountability via increased visibility of the transport chain
- Broader flexibility to accommodate alterations in delivery plans
- Completion of fundamental execution requirements of the supply chain
Challenges that shippers face in the present economic environment
In today’s business landscape, managing the flow of transportation at a domestic and global level within the boundaries of a single system with a unified workflow is crucial to ensure an efficient and integrated supply chain. Businesses to this day, resort either to manual processes or several systems for managing their freight. This leaves little to no room for evaluating the quality of performance or service. Other businesses use legacy transportation management systems that are hosted. The problem with hosted transport management systems is that they are limited in their flexibility and are unable to provide an organization with a bird’s eye view of their supply chain. Currently there are no existing metrics or best practices, as a result of which businesses are still struggling to understand how they can effectively decrease their transportation costs and improve service quality.
Moreover, the effective planning and execution of an international shipment requires shippers to be aware of a number of things such as sailing schedules, trade compliance, requesting bookings, tracking and filing of imports and exports.
Using Transport Management Systems for managing global and domestic freight
One option that shippers need to consider is Transport Management Systems that are available as Software-as-a-Service (SaaS) and offer global and domestic functionality. Software designed for global logistics should ideally enable businesses to effectively manage all forms of transportation (domestic or global) under a single platform with a unified workflow. The entire supply chain should be fully visible and there should be direct communication between the carriers and shippers.
If shippers are able to deploy a global TMS, they will have an all-inclusive solution for managing domestic freight at a port-to-port level, which will have a direct impact on the company’s bottom line. Automated processes and communications and a unified workflow between all the partners of the supply chain, allow for improved efficiency and increased visibility of payments and linked discrepancies, before they create an impact on finances.
Technology designed for global transportation can significantly help in bridging the gap for companies with multiple divisions as they enable logistics management on a global and domestic scale within a single system.