TMS Systems: The 3 Core Areas & 9 Main Features to Expect Upon Evaluation
Efficient management of transportation plays a major role in determining the success rate of an organization’s distribution system. Transportation incurs massive cost to the company thereby making the company strive hard towards achieving maximum returns on investment. Adoption of automated solutions by companies in such a scenario facilitates optimization of functional activities thereby expanding their line of operations and adding value to their supply chain. Often, the deployment of transportation management software systems or TMS systems is a great aid in reducing overall hard and soft transportation costs. There are many benefits to TMS systems, however, in today's post we will cover the core features to expect to see as you are evaluating either implementing a TMS system for the first time for your company or if you are looking to replace your current TMS system.
Role of Technology in TMS Systems
Technology is a vital cog in the process of transportation optimization. It can be leveraged at three basic levels:
Well designed TMS systems contribute in all these stages and helps to take a business global through effective management of freight flows and increased efficiency throughout the distribution network.
Evaluating TMS Systems
Demand for effective and easy to deploy TMS systems have gone up as organizations realize their cost-saving potential. But their historical lack of use means there’s no one truly dominant leader in the small and mid-size business markets.
Important considerations when selecting a TMS system include:
- Is your organization interested in an on-premise or SaaS deployment?
- Is your organization a small to mid-sized business? If so, does the vendor have an established reputation for serving the needs of business of this size?
- Does the system support all modes of shipping within your operation?
- Can the system offer specialized functionality to meet the unique delivery needs of your vertical market?
- Does your organization engage in global trade? Not all TMS systems include functionality for international logistics. This currently extends to our own TMS, the Cerasis Rater. We focus on North American over the road transportation. This is intentional. If your biggest pain point in transportation management is in LTL freight shipping, our TMS system is perfect. Cerasis is masterful at handling inbound, reverse, and traditional transportation moves, especially in the fast moving ever-changing LTL mode.
Key Features of TMS Systems
Features of an efficient transportation management system that contributes in making a supply chain lean and optimized can be broadly classified into three categories:
- Performance management
Mode and Carrier Selection
This feature aids in suitable selection of hte most favorable carrier and mode of transport based on service requirements in terms of cost, efficiency and distance. The system is designed to give the shipper choices of the best carrier to choose from based on previous performance, price and business requirements. This flexibility in feature allows a shipper to understand if one carrier over another is best suited. You may also find that you have multiple shipments that are more time sensitive and need to give those to various carriers best suited for specific lanes.
Route Optimization and Consolidation
The system is designed to provide the most optimal route for carriers. It can at once manage to plan and execute routing for hundreds of shipments either by consolidating, pooling, and even for multimodal transportation. Consolidating shipments not only saves cost but avoid needless unproductive multiple trips thereby preserving fuel and reducing carbon emission.
EDI enabled standard format of information exchange builds a benchmark for superiority. Organizations gain increased visibility in their functions and experience remarkable reduction in paper work. Integration of EDI within TMS Systems provide high end accuracy in data and speed up critical information exchange between the businesses and at the same time contributes greatly to create a green supply chain.
Integrated audit and payment module
Auditing and payment systems allow a TMS to calculate the freight charges, evaluate the service options and identify the areas of improvement. This enables prompt acknowledgement and resolution of overcharge related issues with the carriers and customers alike. Also links to ERP or any financial system allow efficient handling of payment procedures.
Integrated warehouse management system
Integrated WMS module within existing a transportation management system provides real time information about warehouse facility such as in and out inventories movement, material tracking, dispatching the shipments and many such key performance indicators. Access to this real-time information improves the process decision making.
Visibility features within TMS systems, provide a detailed view of every step of the transportation process thereby making them easier to manage. Accurate and timely visibility of the critical information of the entire supply chain enables to keep a healthy balance between demand and supply through proactive management of the flow of goods. This helps to bring down the overall cost of transportation.
Track & Trace
This feature allows real-time exchange of shipment information between carrier, distributor, and customer. Regular and competent sharing of shipment information across the organization through web-based access, increases visibility, accuracy rate of tracking and monitoring, and efficient management & reporting.
Business Intelligence and Analytics
This feature involves proficient use of data warehousing, dashboard functionality and report generation in standard or custom formats. It aims at collecting, analyzing & summarizing supply chain and transportation metrics and data to utilize them resourcefully for effective decision making, identifying needs & key areas of functional enhancement, and evaluating the effectiveness of existing strategies.
Not all TMS Systems Have the "Soft" Features Needed to Go that Extra Mile
Other soft features you should expect within TMS Systems include a hybrid SaaS TMS approach (which we introduced in our post last week):
- You're able to contact representatives to get a clearer idea as to which options are best for you and to ask any questions you might have. They'll work with you to get you the best results from your shipment.
- Accounting services are also present. This allows you to reach out directly to your customer service representative at anytime for invoice questions but also each shipment is verified and audited to combat against any future issues.
- Detailed and custom shipping and transportation data reports are available, too. These allow you to review current and past shipping processes and find out where you could be saving money, helping you develop new plans and strategies for the future.
- A dedicated carrier relations manager who can not only negotiate and maintain rate contracts but also take care of any freight claims or issues as they occur. Carrier relations and collaboration allow shippers to sustain success and scale quickly. Further, when you have more shipments and a larger transportation spend, it is vital to continue the level of carrier intimacy as if you were a smaller shipper to combat tighter and tighter capacity issues.
- In general, using a 3PL who also created the TMS to better align expertise and technology to reach your overall goal of effective transportation management all while having the ability to focus on your business core.
All in all, it really comes down to how well your shipping needs are being handled. You'll know when you've found the right transportation management system because it provides you with results without forcing you to work too hard to get them. Shipping is a key part of your company, and we're here to help. Contact Cerasis today to find out more about our products and services and how we can help you get more from your shipping logistics management efforts.