One of the subset of the supply chain management is the TMS or transportation management system. Please read on to learn more about this system and how one can benefit from this.
What is Transportation Management System?
A TMS or transportation management system is the division of the supply chain management regarding transportation operations and it might be part of the enterprise resource planning (ERP) system.
A TMS system typically “sits” between a legacy order dispensation or ERP and warehouse or allotment module. A usual scenario will involve procurement (inbound) and shipping (outbound) orders to be assessed by TMS preparation module, providing a user with different recommended routing solutions. Such solutions are assessed by a user for equanimity and are passed next to the transportation provider study module to pick the right module and also the most affordable provider. When a certain provider has been picked, the solution generally creates electronic shipment tendering and trace or track to carry out the optimized consignment with the preferred carrier then later to assist freight inspection and fee (settlement process).
TMS system manages 4 major transportation management processes. These include:
- Planning & decision making – a TMS software will identify the most effective transport schemes in line with given parameters that have a higher or lower significance according to a user policy – transportation cost, fewer stops and shorter lead-time possible to guarantee quality, and flows reordering coefficient.
- Transportation implementation – TMS would permit the execution of a transportation plan like carrier rate acceptance, EDI, carrier dispatching and a lot more.
- Transport follow-up – a TMS software would let following any administrative or physical operation about transportation. This includes traceability of transportation event by event, editing of function, custom clearance, booking and invoicing documents, and conveyance of transport notifications that include accident, delay and non-forecast stops.
- Measurement – a TMS requires a logistics KPI or key performance indicator that will report the function for transportation.
TMS comes with different functions but are not limited to the following:
- Preparing and optimizing terrestrial transportation rounds
- Inbound & outbound transport mode as well as transportation provider selection
- Motor carrier management, air, maritime and rail transport
- Real time transport tracking
- Service quality control in the form of key performance indicator or KPI
- Vehicle load & route optimization
- Transport rates & scheme simulation
- Shipment batching of the orders
- Cost control, key performance indicator reporting and data
- Typical KPIs
All of these logistical functions are should be examined as to how every parameter works.
Benefits of TMS
A multitude of advantages the distribution corporations, manufacturers, and any individual who ships freight may get by using any TMS software. They go usually way beyond only the shipping freight cost. When you look at your freight & transportation division as more than only the cost then you’re thinking in the correct direction on the way your business will be holistically helped to leverage TMS for the highest ROI.
A transportation management system or TMS software is also helping the companies to move shipment from its origin to its target destination in the most effective, reliable and cost-effective way. It encompasses the solutions suitable for transporting freight in all the modules and it involves intermodal movements. The processes of TMS include freight moved outbound or inbound, internationally or domestically through the use of the transportation assets that are owned by a company or any external service provider. The freight that has been managed by TMS differs in size ranging from parcels up to mass commodities.