A Beginners Guide Into Transportation Management Systems (TMS)

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TMS is a logistic platform for planning, executing, and optimizing the shipment process. The TMS can perform the following jobs.

  1. TMS compares the rates & services of the carriers for shipment
  2. TMS books the shipment
  3. TMS tracks the shipment

 The user uses the transportation management system to ensure the efficacy of shipment, reduce costs, gain real-time visibility, and ensure customer satisfaction.

Users of TMS

These transportation systems are used by shippers and carriers. Other users can be retailers, distributors, wholesalers, manufacturers, e-commerce companies, and logistic providing companies like 3rd party and 4th party logistics. The TMSs are the best software to be used in supply chain management. 

Types of TMS

Some of the transport management systems focus on a single mode of transportation but the majority of the TMSs support multimodal and intermodal transportation. In the multimodal type of transportation system, two modes of transportation are used by a single carrier and they are also responsible for fulfilling the terms of contact. Modes of transportation can be truck, rail, air, and sea. 

Intermodal transportation is the type of transportation that requires more than one carrier and contract. The shippers get more control over carriers, prices, and modes of transportation on intermodal transportation. At the same time, intermodal transportation makes them more responsible for managing the processes. 

Significance of TMS

The transportation management system is the major requirement of any company that has to transport a large number of goods or to hire a service provider to do the same job. As time passes and business expands, complexities in the supply chain, transport mode, and regulation have made the task difficult and almost impossible without the use of the computer. The software and platforms are also being modified to speed up the process. 

TMS in SCM

The incorporation of transportation management software in the supply chain management system has increased the efficacy and accuracy of the SCM. The supply management system is the process of planning, controlling, and executing the flow of products through different stages of its life cycle. The life cycle of the product is raw material to production and distribution and transportation is required in all these stages. 

Functions of TMS

Following are some functions of TMS.

  1. Freight management

The TMS gets, stores, and updates the rates that the carriers ask to pay for shipment.  This is usually done on the internet in real-time. By keeping the current rates at one place, you can compare with the previous rate which saves your time as cost because, in the pre-TMSs period, this task was done by using a telephone or fax. Now relationships with carriers, negotiated rates, and delivery times are managed online. The TMSs also handle the paperwork involved in freight management like the contract with the carriers. 

2. Execution

Major actions of freight management like booking shipments with carriers are also executed by the TMSs.  Real-time visibility of movement of the freight throughout the transportation network is helping the users to track the shipment and inform the customer and suppliers. 

3. Planning

The TMS offers tools for planning and optimizing the shipment process. The TMS provides data and its analysis on price, service level, and transit time. This helps to choose the shortest and cheapest routes to transport goods. 

4. Administration

The TMSs have administrative features to support documentation and financial reporting requirements. These features are billing payments, and tools for comparing carrier’s quoted rates with the invoice amount. The TMS is also able to handle the settlement which is a more complex process. 

You can buy transportation management systems that can also be installed into your already existing system or on enterprise resource planning (ERP) software and supply chain management systems. By installing this software, boost your business

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