The supply chain is only becoming more complex. With the globalization of business, organizations are now responsible for coordinating the movement of goods among suppliers, manufacturers, and customers located around the world. This coordination is made even more difficult by the fact that each link in the supply chain operates independently, with its own objectives, constraints, and capabilities.
As a result, businesses need to be highly organized in order to manage their supply chains effectively. They need to have a clear understanding of their own objectives and how they fit into the overall picture. They also need to be able to identify which transportation options are best suited for each stage of the supply chain.
With careful planning and execution, businesses can overcome these challenges and ensure their supply chains are efficient and effective. That’s the value that a great transportation management system (TMS) delivers. Here’s a closer look at TMS software and its increasingly essential role in modern supply chains.
Define: What is TMS Software?
Transportation Management System Software, or TMS software, is a comprehensive transportation management solution that helps shippers optimize their freight operations. Sometimes referred to as trucking software, these systems include tools for carrier management, rating and routing, shipment tracking, and reporting. TMS software can help shippers save time and money by streamlining their shipping operations.
What Does TMS Software Do?
TMS Software is a full-service logistics platform that is used to manage and streamline the process of transporting physical goods for businesses. This type of software can be used for a variety of purposes, including managing fleet vehicles, tracking shipments, and optimizing routes.
TMS software is often used to improve the efficiency of transportation operations and reduce costs. In many cases, TMS Software can automate tasks that would otherwise be completed manually. This can free up employees’ time so that they can focus on other tasks that are essential to the business.
With so many items coming and going on a regular basis, TMS software provides an anchor for processes, protocols, and compliance. It stores critical details to ensure shipments are in compliance and maintain proper documentation.
TMS Software can also provide valuable insights into the transportation process itself. Companies can gain better visibility into the day-to-day movements of goods, delivery timelines, supply chain bottlenecks, load and unload times, and more. By collecting and analyzing data, businesses can identify areas where they can make improvements and help them save time and money by making changes to their operations – by land, air, and sea.
Who Is TMS Software For?
Businesses across multiple industries and revenue levels use TMS software to simplify and streamline their logistics. Any type of company that ships, moves, and receives physical goods can benefit from this type of software.
Examples of companies that use TMS software include:
- Retail companies
- Manufacturers
- Distributors
- eCommerce companies
- Logistics service providers (think 3PL, 4PL, etc.)
These categories span a wide range of users and industries. From construction to machinery to food companies, companies spending a significant amount on freight will benefit from transportation management software.
What’s more, cloud-based trucking software is making this highly coveted system more affordable and realistic for smaller companies with smaller budgets. No longer restricted by massive on-premises services and infrastructure and costly updates, more companies are seeing the benefits of TMS software and how it helps them manage the shipping part of their operations from anywhere.
How Does TMS Software Work?
TMS software has become increasingly popular in recent years as a way for companies to manage their transportation needs. There are many different types of TMS software on the market, each with its own unique features and benefits.
One of the most popular types of TMS software is web based TMS software. This type of software can be accessed via any internet-connected device. It provides users with a convenient way to manage their transportation needs from anywhere in the world. Web-based TMS software is also often more affordable than other types of TMS software.
Another popular type of TMS software is enterprise TMS software. This type of software is designed for larger companies that have multiple locations and need to manage their transportation needs across a wide area.
Both types of software work in similar ways – take a closer look:
Shipment Planning
Sending goods from your manufacturing facility or warehouse? Your trucking software will help you choose the best way to transport those items based on size, weight, current carrier rates (if using third-party logistics services), distance, and other variables. It even takes into account multi-leg routes if using a combination of shipping companies or transportation options (i.e., land, sea, and air).
TMS software gives you greater visibility into each phase of the transportation process. This helps you track your shipment as it progresses, anticipate possible delays or bottlenecks (such as a weather-related event), and plan for the most efficient route.
What’s more, you’ll also gain insights into tariffs, documentation, or other requirements when shipping internationally. You can plan to have your shipments properly packaged and labeled and avoid any delays that come with not meeting trade regulations.
Shipment Execution
Sending out a shipment of goods always comes with some level of risk. Using trucking software, you can mitigate those risks by having more visibility into how your goods are handled and how they progress through the supply chain.
The various execution features can vary between shipping software. Typically, you’ll be able to communicate with carriers, store and share all of your documentation, get real-time freight pricing, and handle your invoicing and billing. You’ll also be able to see your shipment statuses and acknowledge when your shipment has been received.
Depending on the system, you may also have the ability to do all of the above with international logistics partners.
Receiving a Shipment
When you’re expecting a shipment from a warehouse, manufacturer, or business partner, you can use your transportation management software to track its progress and ensure you’ve received what you expected. Have all of the necessary documentation in a single place to help with compliance and organization. Get real-time updates into your freight’s progress while also measuring each carrier’s performance.
Optimizing Your Shipping and Shipping Procedures
One of the biggest benefits of using transportation management software is the ability to collect data on all of your shipments and carriers. Gain in-depth reporting regarding your shipping networks, then use that data to make changes to your shipping procedures, lead times, and operations.
Most TMS solutions make this process easier than you think. With built-in dashboards and analytics, you can get important insights at a glance that will streamline your decision making.
TMS Software Example Use Cases
Knowing what transportation management software does is one thing. Applying it to your business is quite another. Let’s explore what using TMS software looks like in action:
Optimizing Route Efficiency
Shipping goods to another city, state, or even country comes with plenty of challenges. There’s more than one road to get there, and more than one carrier that’s up for the task. And in some cases, the shortest route isn’t always the fastest, safest, or most efficient.
Things like traffic, weather, the time of year, and other events can impact a route’s efficiency. To make the right route decision, companies need deeper insights into their options.
TMS software can deliver better visibility into route planning by providing you with real-time traffic conditions, weather, the availability of equipment and personnel, and other variables that ensure an on-time delivery. These insights can help you make the best choice for shipping your items and keeping your customers happy!
Improving Finances and Cash Flow
Maintaining cash flow and a healthy financial picture is critical to any business operations. However, shipping is often seen as a cost center rather than a profit center, which means you’ll need to have plenty of funds on-hand to pay carriers, employees, and vendors.
One way to keep these costs low is to minimize shipment costs as much as possible. These costs span a range of line items, including freight charges, shipping materials, consolidation services, payroll, and facility-related expenses.
Using TMS, companies can gain a firmer grip on their shipping-related finances. It helps users define the best possible route for shipping goods based on real-time demand and fluctuating shipping fees. It can also help to decrease the shipping costs per item by consolidating shipments whenever possible, ensuring you never pay more than you have to.
Reducing Inventory Needs
Holding onto inventory can be costly, not to mention more of a hassle than it’s worth. Getting the inventory puzzle just right isn’t easy. As many companies learned during the COVID pandemic, demand for some items may fluctuate unexpectedly, leaving you with either too much or too little of a certain item.
The more inventory you hold, the more space you need to store it. That also means paying more for utilities, personnel, warehouse space, equipment – you get the idea.
One way to optimize your inventory strategy is to pair it with a transportation management system. Your TMS can forecast demand based on previous shipping activities, allowing you to generate accurate inventory models that will help you right-size your inventory. What’s more, this data becomes more valuable over time – the longer you use your TMS, the more accurate it becomes because it can look for shipping patterns over longer periods of time.
Enhancing the Customer Experience
The growing eCommerce market has created major competition between retailers. Consumers have become accustomed to rapid delivery times (like Amazon Prime’s two-day deliveries) and often choose retailers that can get them their items the fastest.
When time is of the essence, companies can turn to TMS to make data-driven decisions on which carrier to choose based on the recipient’s location, current shipping costs, package size and weight, and other variables.
TMS helps you save on transportation costs by limiting the number of shipping hubs to which the package will travel. It also helps you consolidate orders to make the final shipping cost as low as possible. This ensures an efficient movement of goods, not to mention happy customers when their items arrive by the estimated delivery date (or sooner).
Benefits of Using TMS Software
Implementing trucking software comes with a range of benefits for organizations, as well as their suppliers, logistics partners, and customers. Here are a few of the advantages your company might notice:
Simplified Supply Chains
TMS software is a crucial piece of technology for any business that wants to streamline its supply chain and improve efficiency. The software provides a central platform for managing all aspects of the supply chain, from sourcing and procurement to transportation and logistics – across all geographies, carriers, and methods of transport. It can also be used to track inventory levels, monitor supplier performance, and optimize routes.
It can also help businesses keep up with the ever-changing landscape of the supply chain industry. By using TMS software, businesses can ensure that their supply chains are running smoothly and efficiently.
Lower Costs – For Businesses and Their Customers
Transportation management software (TMS) can help businesses to lower their costs in a number of ways. By streamlining the process of shipping and transportation, TMS can help to reduce the amount of time and money spent on coordination and administration.
TMS can provide visibility into the entire shipping process, so that businesses can identify areas where they are spending more than necessary. A transportation management system can also automate many of the tasks involved in shipping, which can further reduce costs. When you can save on costs, you can pass some of those savings onto your customers to earn their ongoing loyalty.
Greater Business Visibility
You already know how important it is to have visibility into all aspects of your company. You need to know what’s happening at all times so you can make the best decisions for your business.
TMS software is designed to give you complete visibility into the shipping side of your business. It provides real-time data so you can see what’s happening at all times. You’ll be able to make informed decisions about your business that will help it grow and succeed.
Time Savings
When it comes to transportation management, time is of the essence. TMS software helps you save time by reducing the need for manual data entry and improving communication between shippers and carriers.
TMS software also provides real-time tracking of shipments, so you can quickly and easily see where your freight is at any given moment.
Centralized Data
TMS software is a great way to centralize your data. It allows you to keep all of your shipment information in one place, which makes it easy to access and manage. You can use TMS software to track your inventory, customers, orders, and more. Having this bird’s eye view of your data also helps you save time and money, not to mention it gives you the most accurate insights of your shipping operations at any given time.
Scalability
With better data visibility, companies are in a better position to scale based on customer demand. Using predictive analytics, organizations can cater to customers’ needs when demand shifts, allowing them to stay ahead of their competitors and deliver timely shipments.
What to Look for When Choosing TMS Software
TMS software isn’t a one size fits all. So, what should you look for when choosing a software solution?
We suggest starting with your business needs and goals. Is there a certain function you’re looking to improve with trucking software? Or, are you looking to empower your existing transportation dispatch system with more features and data centralization? The answers to these questions give you a good starting point.
In addition, you may also want to consider how you will access your TMS software. Cloud-based solutions give companies more options than ever. These also make it easy to deploy a new solution without making extensive changes to your IT infrastructure.
There’s also the matter of knowing who will be using the software. A complex system will take longer for your employees to learn. The longer the onboarding, the greater the time to value. Choosing a simpler solution can help to shorten the learning curve and start experiencing the benefits of your system sooner.
How to Implement TMS Software in Your Business
Choosing transportation management software is the first step. The next step is deploying the software in your daily operations. This part is easy when you have the right vendor on your side.
MessageXpress makes implementing TMS software a low-lift process on your behalf. Our industry-leading software automates key business processes so your team can concentrate on other things. It’s software they’ll use every day – without realizing they’re using it every day! Contact us today to learn more.
