As a third party logistics company who offers both managed transportation services alongside our web based TMS Software, also known as a transportation management system, which we call the Cerasis Rater, we are always interested in what the marketplace of shippers has to say about TMS software.
The Benefits of TMS Software and Mastering the Tactics
If you have followed our blog, you may have caught our post on the top 5 benefits of of TMS software. We urge you to also explore our the TMS category of our blog to see more insights around the transportation management system landscape.
For a quick recap, the 5 benefits of a TMS software are as follows:
- Increased Customer Service
- Warehouse Efficiency
- New Delivery Capabilities
- Inventory Reductions
- Cash Flow Improvements
Again, make sure you check out the post fully to see the explanations. Many of you may read those top 5 benefits and ask say, “Those are the top 5 benefits?! Where is process improvement? Where is reduced overall costs?” No worries, we do in fact talk about those more in our other TMS software posts, but most of those are tactics that you can improve by way of implementing a transportation management system, or features of the TMS software, but the benefits stated above are outputs from improving tactics. So, now that we are talking about tactics (GASP…TACTICS?!) as a way to get to desired benefits from using a TMS, we wanted to highlight a great study conducted by Software Advice on the TMS software market(make sure to check out their slideshare presentation at the end of this post too!) and what small to medium shippers are doing (or not doing) with their transportation management systems and what features or tactics are important to these shippers. Surprisingly, and perhaps that is because we practice day in and day out on process improvement, strategy, and desired outcomes for our shipper customers, a lot of TMS software users and shippers are still stuck in the weeds. Shippers are still somewhat focused only on tactics, and not yet still hitting, in general, a maturity to have the tactics mastered, where the focus is on improvement of those tactics, staying strategic and efficient, and pivoting based off of analyzing shipping data and activity to continuously see better performance out of their transportation departments. However, if you are still stuck in the weeds and tactics of shipping, but don’t feel you can put enough resources in house to get to a strategic level, it may be time to reach out to an expert. Let’s dig a bit deeper into the study.
Key Findings from the TMS Software Study by Software Advice
Every year, Software Advice speaks with thousands of prospective buyers looking for the right transportation management software (TMS software) for their companies. Most are from small businesses (those with annual revenue of $100 million or less), which means these conversations give Software Advice unparalleled insight into these buyers’ reasons for purchasing new software.
They recently analyzed a random selection of 385 of these interactions to uncover small business TMS buyers’ most common pain points and their reasons for purchasing new software. This report outlines the trends they uncovered.
- Nearly 80 percent of buyers seek basic functions, such as route optimization and shipment tracking, in a new TMS software solution (note the features or tactics focus).
- Twenty-four percent of buyers are still using manual methods (e.g. pen and paper) to handle transportation management needs (these shippers are STUCK in tactical and not strategic mode).
- Among buyers in our sample, a majority (68 percent) are looking to implement a new TMS within the next three months or less (this is a great first start!).
Majority Want to Optimize Routes and Track Shipments
When asked which features they were looking for in a TMS system, 77 percent of prospective buyers said they needed to either plan and track the routes for product shipments or track actual shipments themselves. (This number was a combination of 52 percent who stipulated a route optimization solution and 25 percent who wanted shipment tracking.)
Route tracking and optimization allows users to monitor the location of inbound and outbound transports and tweak their routes based on distance, weather and a number of other factors. Essentially, shippers want options, and options they should have. When you have options such as the cost of the shipment, the time it gets there, and what accessorials are available, then you can route your shipments to your specifications, giving you more control.
Shipment tracking, meanwhile, enables users to follow items that are shipped and provide accurate estimated times for arrival (ETAs) for those shipments. This is where the core benefit of increased customer service comes from. These two tactics (route optimization and shipment tracking) allow you to with control and knowledge better inform your customer and also make sure you choose the route that is optimal for all parties’ needs.
Shippers Want Options from TMS Software, Especially In LTL Shipping
The study then quoted a logistics consulting firm who stated in their own studies that 24 percent of the prospective buyers they spoke to requested tools that would assist with price quoting and cost comparison, and 15 percent said they wanted TMS software that would assist with dispatch capabilities.
Quoting and Cost Comparison with Inbound/Dispatch Options: We find that too when we are talking to shippers. Our TMS software, the Cerasis Rater, brings up rates from several carriers once you input class and destination and our inbound freight management program (soon to come with a vendor login so they can route their own shipments inbound to our customers) allows for dispatch capabilities through our freight routing specialists using our TMS.
LTL Freight Shipping and Integration: Thirteen percent wanted a system that could focus specifically on less than truckload (LTL) shipping, which refers to relatively small freight, while another 13 percent said they needed TMS capabilities as part of a wider WMS or inventory management software (IMS). At Cerasis we have seen that when we integrate into an ERP or a warehouse management system to our TMS software, we drive out more inefficiencies for the shippers using our TMS.
Nearly One Fourth of Buyers Still Using Manual Methods
Although a breakdown of prospective buyers’ current methods revealed a variety of different techniques, the single largest group (24 percent) fell under “manual methods,” which often meant that buyers were still using pen and paper to manage their transportation operations.
[Customers using manual methods] need to make arrangements, shipment by shipment, based on the requirements of that shipment and not based on a mass distribution price-based process according to the logistics consulting firm. However, there are options for this. With an expert carrier relations team, rates for shipping can be secured via an RFP for specific lanes and then stored and called up for specific shipments, rated and processed. It is in the manual processing of freight shipments that is ripe for data entry error and unnecessary inflation of costs due to errors. The automation of process provided by a TMS can truly help drive value and bottom line savings.
Again, since we are using the “best of breed” functionality for transportation management each and every day, it really blew our minds to read this startling fact:
20% of buyers said they are currently using spreadsheet software to manage their transportation operations.
Another 17 percent, meanwhile, said they were using a TMS program that was either outdated or lacked the functionality they needed.
Final Thoughts on TMS Software Study
Of course, at Cerasis, we are fortunate to use a transportation management system or TMS software, every day. Our shippers have the advantage of continuous updates to the performance and functionality of the Cerasis Rater TMS due to our in house development and technology team. However, one thing is clear, not all are enjoying the benefits that can be realized from implementing the TMS because they are still stuck on tactics. In today’s competitive business environment, when a business can stay strategic by elminating inefficient process and waste in transportation management, they can focus back on their core and thing of how they can make business decisions and new initiatives that continue to drive their business forward. A great TMS Software is truly a freer of resources, time, money, and effort so businesses can grow. That is why we have the little tagline when it comes to our freight technology: “Tools so powerful, they can build businesses.”
What about you? Do you use a TMS software? Why or why not? What benefits do you see and what features do you want out of your TMS? Let us know in the comments below!