What is TMS in the supply chain?

by Josh Biggs in Ecommerce on 24th January 2022

The Transportation Management System (TMS) is defined as follows:

Transportation management systems, sometimes known as “TMS,” are meant to make the shipping process more efficient. Supply chain management is a subset of supply chain management that deals with transportation solutions. A transportation management system (TMS) enables shippers to automate the procedures they already have in place while also receiving useful insights that help them save time and money on future shipments.

Anyone who works with Warehouse daily, including distribution corporations, e-commerce businesses, and other businesses, understands that the shipping process has several moving elements, both physically and metaphorically. From the time of quotation until delivery, companies involved in freight transportation are constantly searching for methods to reduce costs and streamline operations. With the use of transportation management systems (TMS), shippers now have a tool at their disposal to do exactly that.

Important functions of a TMS

Shipment planning, execution, and delivery are the three primary functions of a transportation management system (TMS), optimizing linked supply chain operations such as billing, carrier selection, pricing strategy, and others.

Transportation management systems assist shippers in determining the most cost-effective method of transportation, the lowest rates, the most dependable carriers, and the best-performing lanes like Warehouse Miami. A transportation management system (TMS) may offer shippers visibility into shipments and assist them in managing customer expectations via proactive event management (minimize delays, provide information on market changes, etc.)

Execution: The execution functions of a transportation management system might differ significantly depending on the technology and emphasis of the transportation management system. A TMS with more extensive features can automatically integrate orders, aggregate them into loads, tender shipments via automated processes, offer insight into shipments, settle and reconcile bills, and perform various other functions.

Optimizing: A transportation management system (TMS) that analyses shipment performance — from operational statistics (OTP/OTD) through carrier scorecards — assists shippers in optimizing future shipments. Atop that, price insights and data analytics dashboards help shipping experts to cut transportation costs and enhance company operations by identifying underperforming lanes, carriers, and other business solutions.

TMS challenges.

Keep quotations in a logical order.

As a shipper, you don’t want to spend your time on the phone or hopping from website to website, looking for the best prices offered by the numerous carriers in your network. The process of dialing several carriers and seeking prices may be a time-consuming one, diverting your focus away from other elements of your organization that need your attention.

Choosing the most appropriate carrier.

Not all packages are created equal. Shipments that are time- or temperature-sensitive, need special delivery services, or must be handled with extraordinary care are all possible scenarios. Therefore, not all shipments should be handled by a single carrier due to this. Even while certain carriers may be better suited for long hauls, others may be able to provide you with the specific services you want for a modest additional fee.

Keeping track of shipments

Unlike consumers, businesses do not necessarily utilize the same carriers for all their shipping needs. Multiple shipments may be en route simultaneously, traveling on a variety of different business vehicles all over the world. As a result, the process of monitoring freight may become quite difficult to manage. If you do not have a transportation management system, you or someone within your business may be required to manually input shipment numbers into forms on several different carrier websites.

Observing and gaining knowledge. 

If you don’t have a transportation management system in place, you could have a basic gut sense about who has been the cheapest carrier over the last year or which carrier has had the best proportion of on-time shipments. However, without the benefit of technology, it’s difficult to say for definite. 

Categories: Ecommerce