As a business grows, its supply chain operations can get geometrically more complex. If you’re only shipping a few loads a week, though, you might not need a transportation management system (TMS). However, if you move a significant number of loads via several different modes from several different origin points, a TMS could be a vital tool to help you plan, execute, and analyze all of your supply chain activities.
If you’re considering a transportation management system for your business, we’ll walk you through the major benefits. You’ll see how other operations leverage the features of common transportation management systems, so you can understand whether a TMS might be right for your business. Although cloud-based TMS software has made the price point more affordable for smaller businesses, a TMS still represents a significant investment. It’s important to understand the full benefits before taking the plunge.
Who Uses Transportation Management Systems?
Businesses in a wide variety of industries use transportation management systems. By and large, though, companies who invest in this software are those moving goods on a regular basis. That includes manufacturers, retailers, and suppliers. Third-party logistics companies (3PLs) who move freight on behalf of their customers also leverage TMS software.
When implemented in larger companies, transportation management systems are sometimes integrated into larger enterprise resource management (ERM) systems or supply chain management systems. TMS software can also integrate with warehouse management systems (WMS).
What Benefits Does a TMS Offer?
Businesses that ship a number of goods via different modes and carriers have a lot of options available to them, a lot of data to organize and evaluate, and a lot of decisions to make. A TMS can streamline a number of these activities into a single system, simplify information on easy-to-parse dashboards, and synthesize complex data sets into actionable numbers.
As you dive deeper into the benefits of a TMS, you might find it easiest to think in terms of three different areas of supply chain management: planning, execution, and analysis.
In other words, a TMS provides analysis tools that allow supply chain managers to leverage all available data toward more effective supply chain optimization. All of this creates even more opportunities for cost savings, greater efficiencies, and improved customer satisfaction, plus other priorities that matter to your organization.
Is a Transportation Management System Right for You?
As with many pieces of software, a transportation management system represents a significant investment. However, the benefits can also be significant, especially for operations that move a large number of goods. The increased visibility, expanded capability for analytics, and the efficiency of managing everything from a single system can be a springboard for significant savings in both time and money. By weighing the cost against the potential benefits, you’ll get a sense of whether a TMS will offer you the returns that make the investment worthwhile.
Looking for more ways to manage your freight more effectively? Our experts would be happy to help you analyze your transportation usage and budget to uncover new efficiencies. Reach out for a complimentary consultation to get started.