The role of technology in Transport Management
Transport Management Solutioning has been sought after by all and sundry since the time transporting became an industry. For those who aren’t familiar with what is Transportation Management, let’s get that out of the way.
Transportation Management’s aim is to reduce transportation cost and increase delivery reliability through collaboration across all modes and providers. Transportation Management allows companies to manage their international and domestic transportation, tackling supply chain complexity with integration to partner systems with a single control layer for monitoring the life-cycle of transportation. Bids are completed on the platform, contracts are awarded, execution is monitored, and changes made based on detailed analysis of transportation data. Shippers, suppliers, and logistics service providers all collaborate in the cloud with Transportation Management. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions. These solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider. Once the best provider is selected, the solution typically generates electronic load tendering and track/trace to execute the optimized shipment with the selected carrier, and later to support freight audit and payment (settlement process).TMS products serve as the logistics management hub in a collaborative network of shippers, carriers and customers. Common TMS software modules include route planning and optimization, load optimization, execution, freight audit and payment, yard management, advanced shipping, order visibility and carrier management.
The business value of a fully deployed TMS should achieve the following goals:
- Reduction of costs through efficient routing, load optimization, carrier mix and mode selection.
- Improving the accountability together with visibility into the transport chain.
- Enough flexibility at hand for last minute contingencies, to alter the delivery plans.
- The key supply chain execution requirements
What does Transport Management comprise of?
SOURCING: It all start with managing the entire life-cycle of transportation sourcing. Optimizing bid events, standardize contract management, and drive contract compliance with a secure, single view to the contracted rates and carrier allocations plans comes next.
RATING: Then transportation rates are centralized and standardized across various modes and geographies. Optimize carrier, mode, route and rate selection based on preconfigured business rules, available services, and carrier capacity commitments.
PLANNING: Consolidate, plan, optimize, and schedule across all modes and geographies.
TENDERING: A universal communication platform joining shippers with a networked multi-modal carrier community.
FREIGHT PAYMENT & AUDIT: Receive freight bills electronically, standardize the data and format, and audit against the contracted rate and shipment activity. Resolve discrepancies through a collaborative dispute workflow with transportation providers. Payment vouchers are triggered following bill approval.
All of the above factors help reduce transportation costs. Since they eliminates billing errors in the audit process, standardizes globally on one transportation management platform, reduces transportation provider switching costs by gaining faster deployment and low cost of ownership.
There are many benefits of TMS that manufacturers, distribution companies, and anyone who ships freight realize. They go often way beyond just the cost of shipping freight. If you can look at your freight and transportation department as more than just a cost, then you are thinking in the right direction on how to holistically help your business leverage a TMS for the maximum ROI.
A transportation management system (TMS) helps companies move freight from origin to destination efficiently, reliably, and cost effectively. TMS encompasses solutions for moving freight in all modes and also includes intermodal movements. The TMS processes include freight transported inbound or outbound, domestically or internationally; using transportation assets owned either by the company or an outside service provider. The freight managed by a TMS ranges in size from parcels to bulk commodities.
Perhaps no other supply chain application offers so many ways to save money or drive value. But the main reason companies implement a TMS is to reduce freight spend. A TMS achieves these savings based on process enforcement, analytics, and optimization; with virtually no other supply chain application offering so many different forms of optimization.
There is a particular focus on the degree to which a TMS can reduce freight spend. Several methods can be used to reduce freight spend, with the different “savings buckets” having different levels of savings.
Shippers that implement TMS solution compared to traditional methods of transportation management perform better in terms of service levels and freight savings.
The benefits of a TMS are quite a few,for example, when you have the ability to use a TMS with reporting and analytics you are able to see the affect of your choices within that TMS, leading to increased customer service. So how does a TMS help in warehouse efficiency? The MORE you use your transportation management system the more you decrease time on freight management and more time working on other projects such as warehouse duties. Furthermore you get the overall combined Supply Chain visibility you need to make business decisions that drive further cost savings and decrease inefficiencies.A robust TMS offers the ability for you to optimize the way you transport.When a TMS gives you confidence that your customers are receiving their orders on time, it allows you plan better for your inventory you have on hand. Having an accurate forecast of your inventory is increasingly important as eCommerce continues to increase for the foreseeable future.By employing proper accounting, through payment, auditing, and consolidation services, within a TMS solution, an entrepreneur can make quite a bit of profit.
TMS is what big enterprises are leaning towards and something startups are massively relying on. It is here to stay and will be a dominant need in the entrepreneurial market for a very long time indeed.