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Software Development May 16, 2024

Transportation Management Software: TMS Guide

Writen by Vishal Shah

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What is Transportation Management Software

Transportation Management Software  (TMS) is an essential tool for everyone who works in the transport and supply chain fields and it helps to make the operations globally smoother and more efficient. In the following, we will analyze how TMS is a main component of today’s transport industry. We will be discussing how it aids in the planning of roads, checking freight costs, and the usage of the latest data for smarter decisions.

Be it the novice who is just beginning to explore logistics or the expert who has been in this field for years, this guide will help you to know how to select and use the best TMS that will suit your organization’s needs and enable your business to grow.

What is a Transportation Management System?

A Transportation Management System (TMS) is a set of software tools that are used to handle the process of shipping goods from one place to another. Lately, the transportation and logistics industry has experienced a considerable transformation and has been confronted with difficulties which include the necessity to deliver things fast since that is what the customers now desire. TMS has become more consequential than ever due to this fact.

In the simplest way, a TMS is a tool that aids the planning, implementation, and adjustment of the movement of goods. It is now a widely used and popular instrument in the field of managing supply chains and it is used by many people and companies such as manufacturers, distributors, retailers, and those who are providing logistics services.

For example, the trucking business is a good case to show the importance of a transport Management System. It can determine the optimal routes for the trucks to follow, thus making sure they use time and fuel efficiently. Besides, it helps to organize these routes in a way that is both efficient and the trucks make sure that they transport goods in the most effective manner.

Besides, a TMS verifies all the shipping activities are in conformity with the legal regulations, simplifies the paperwork, and handles the routine office tasks. Thus, all these advantages prove why the transport Management system is really worth it in the logistics and transportation fields of today.

How Does Software for the Transport Management System Work?

A Transportation Management System (TMS) acts like the central nervous system for the shipping operations of a logistics and transportation company. It operates in four major steps to streamline and optimize these processes:

Step 1: Connecting the Dots

The TMS is at the core of its ability to be linked with business systems like the CRM (Customer Relationship Management), the ERP (Enterprise Resource Planning), and the SCM (Supply Chain Management). This integration allows the TMS to gather essential data:

From SCM, it collects data on inventory levels, production schedules, and supplier locations.

  • Through ERP, it gathers customer information and billing data.
  • CRM offers information about customer purchase histories and preferred delivery options, thus, it learns about them

The total picture of the supply chain emerges, thus the TMS can make the right decisions for the next steps.

Step 2: Smart Routing 

With the data collected, the TMS optimizes transportation routes by considering:

  • Experience daily and past traffic data to prevent the routes that are crowded. 
  • Customer-relative delivery time periods and order priority. 
  • The size and weight of shipments determine the kind of vehicles and routes to be used; hence the messenger delivers the shipment to the select place thus saving on fuel costs. 

The end result is the traffic which is optimized routes that minimize the travel time, fuel consumption, and costs. 

Step 3: Efficiency Boost 

Once optimal routes are determined, the TMS automates the generation of necessary documents, enhancing efficiency:

  • Bills of lading (BOLs) and packing slips are automated in order to decrease the amount of manual data entry and the number of errors.
  • Custom, documentation for international shipping is also created automatically.

 The automation of the shipping procedure makes the whole process more efficient, the errors are eliminated and the staff can do more strategic tasks.  

Step 4: Accurate/Transparent Tracking

The TMS provides real-time tracking of shipments, ensuring transparency throughout the delivery process:

  • All the stakeholders, for instance, vendors, shipment providers, and recipients get the correct information about the goods.
  • Shipment monitoring gives way to the possible problems that might emerge and therefore, it is possible to manage them proactively. 
  • The integration of customer communication tools makes it possible for customers to get the required updates on their orders on time and in an accurate manner.

Transparency makes the customers more satisfied and loyal because it keeps all the parties on the same page throughout the whole shipping process. 

These steps include; planning, scheduling, communication, and supervision. Through these steps, a TMS controls and enhances all the different aspects of transportation logistics, making it a necessary tool for modern shipping operations.

Benefits of Transport Management Systems

The Transport Management Systems (TMS) are responsible for a lot of advantageous things which in fact, can really help to improve how the businesses handle shipping and logistics. Here are some of the main advantages:

Efficient Operations

 A major advantage of applying a TMS is the improvement of the operations and the way they go smoother and more efficient. These systems are equipped with the latest technology that enables them to anticipate the number of transportation needs and the cost of it. They can also predict when the orders will be delivered and recommend the best routes and carriers with the help of AI. This, in turn, not only makes the logistics process smarter but also the cost and time are reduced.

Safety of Goods 

TMS becomes an important factor in ensuring the safety of all goods, particularly those that are sensitive. It utilizes electronic devices such as RFID for the instantaneous location and control of the shipments. This is particularly relevant for those items that require delicate handling as it avoids the problems of damage or loss during transportation.

 Legal Compliance and Documentation

 Besides, TMS is also helpful in the legal aspect, and syncing the related documents becomes easier. It is a vehicle that has the ability to monitor drivers’ sleep cycles and provides thus, the corresponding proof for the meaning of the law on transportation. TMS keeps comprehensive records of fleet services so that all the operations are in line with the standards. For freight brokers TMS is helpful since it can be linked with the systems of shipping carriers and data platforms, thus, it facilitates the exchange and tracking of transportation documents.

Transportation Management System Software Features

  • Transportation Management System (TMS) software comes with many features that help businesses manage their transportation and logistics more efficiently. 
  • One key feature is route optimization, which helps plan the best routes for shipments by considering traffic, distance, and delivery times. 
  • TMS also offers real-time tracking, allowing businesses to keep an eye on their shipments at every stage and handle any delays or problems quickly. 
  • Additionally, TMS can connect smoothly with other business systems like customer relationship management (CRM) and enterprise resource planning (ERP). 
  • This connection means that data can be shared easily across different parts of the business, helping to make better decisions and get a clearer view of the logistics operations. 
  • Another important feature is cost management, which helps businesses find the most cost-effective shipping options by comparing different carrier rates. 
  • TMS also automates a lot of the paperwork and administrative tasks involved in shipping, like managing documents and billing, which reduces mistakes and boosts efficiency. 
  • Overall, these features help businesses streamline their shipping activities, improve customer service, and cut down on costs.

Must-have features of Transportation Management Software

In the process of selecting the Transportation Management Software (TMS), there are some important features that you should ask for that are really significant in improving the management and running of your logistics operations. These features are designed to help the transportation management area and ensure that from planning to delivering everything runs smoothly and efficiently. Here’s what to keep an eye out for: 

Transportation Planning

This is a basic section of any TMS. It incorporates devices that allow the user to determine the best routes for shipments and the schedules for deliveries, considering the delivery time, the vehicle space, and the driver schedules. Super good transportation planning can cut down a lot of the costs and thus, enhance how the services are delivered. 

Transportation Execution 

This feature, in other words, is all about the transportation plan coming to life. It comprises of devices for the distribution of jobs to carriers, management of freight bills, and monitoring of shipments at the moment. These features are the ones that make it possible for businesses to monitor their shipments, change the plans when required, and make sure the deliveries are made on a time schedule.

Process Optimization

 This implies the constant enhancement of transportation processes by means of data analysis and performance measurement. A competent TMS will have the analytics and reporting tools which will help to identify the trends, to measure how you are performing compared to your goals, and to find ways to cut costs and improve the service. This is of vital importance for making the right decisions which helps in the enhancement of efficiency.

Administrative Tasks

TMS can automate many routine paperwork tasks like managing documents, invoicing, paying carriers, and conducting audits. Automating these tasks reduces the chance of mistakes and lets your team focus on more important work.

Third-Party Integrations

A strong TMS should easily connect with other business systems like ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and WMS (Warehouse Management Systems). These integrations help keep data consistent across different systems, improving the accuracy of your information and how quickly you can respond to changes in demand or supply.

The Cost of Developing Transportation Management Software

The cost of developing Transportation Management Software (TMS) can vary a lot and depends on many different factors, so it’s hard to give a one-size-fits-all price. When you’re looking to create a custom TMS, you need to think about how many features you want, how big and complex the software will be, how secure it needs to be, and what kind of technology you plan to use.

Where you choose to get the software developed can also affect the price. Generally, the costs can range from $50,000 to $300,000. To get a better idea of how much you might need to spend, it’s helpful to consult with a company that specializes in developing this type of software. They can give you a more specific estimate based on exactly what you need.

In the end, Transportation Management Software (TMS) is a must-have for any company that is doing logistics and transportation. It eases the processes, speeds up the operations, and increases the security and compliance of the supply chain. The TMS is not only a tool to be used for the setup, management, or improvement of the transportation processes, but it also fulfills a broad range of needs. It is compatible with other business systems and delivers information and analysis instantly.

If you are contemplating getting or making a TMS, be sure to think carefully about the things you specifically need and the amount of money that you can afford so that the software can assist you in achieving your business objectives and is indeed worth the money you spend on it. With the proper TMS, your business will have greater management of operations, reduce operating costs, and be the reason for the customer’s happiness.

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