Selecting the correct software system for the business helps to attain process efficiency, gain visibility into the supply chain, and decrease general transport costs. One such software is the transportation management system (TMS) which is a subset of supply chain management regarding transportation operations (Mei & Eliot, 2017). TMS has become an indispensable tool in a growingly competitive and complex transportation landscape. Whether employed by the manufacturer or a third-party logistics provider (3PL) such as DHL or Kuehne + Nagel, a TMS can decrease transportation costs, enhance performance and upsurge customer satisfaction.
The following article examines top 5 features to look for when choosing a transportation management system.
1. Powerful optimization engine
At present, there exist many TMS solutions such as in the market, but not many is equipped with optimization engines with the aim to create the most optimized route plans which satisfy multiple constraints in delivery, and to create route plans which save cost and maximize vehicle's capacity. When selecting a TMS, it should have at least one of the following powerful optimization engines:
- Load Optimization: Arrange packages or pallets on the vehicle taking into account rules like Stackability, etc.
- Route Optimization: Plan Shipments in the best possible manner on available Vehicles by means of available routes.
- Strategic Freight Management: Arrange bids by carriers for long-standing contracts based on Risk, Capacity and Cost.
- Selection of Carrier: Arrange carriers for each shipment considering allocations, business shares, and costs.
2. Real-time Tracking
TMS should offer track-and-trace capabilities for products as they move through the network and provide a comprehensive view of each stage of the transportation process in that way making them simpler to manage. When choosing a TMS, it should be made sure that it offers an enhanced accuracy rate of monitoring and tracking, and efficient management together with automated notifications for events on the road.
For example, the logistics firm, KOSPA Logistics, employs the TMS Abivin vRoute which provides real-time visibility of products from carriers and fleet using real-time in-transit updates from GPS data aggregators.
3. Carrier contracts management
The core of the TMS is the contract. Consequently, the potential TMS should have the ability to enable the organization to efficiently leverage the preferential terms and negotiated lanes established for the business by consolidating the contracts in an e-database that has the competency to offer access and state-of-the-art decision support tools for the transportation management team.
Such a TMS has been developed by Abivin, as well as another Canadian multinational technology company, which can handle multimodal contracts with substantial flexibility, offer role-based access and ease of set-up. The platform supports thousands of agreements in real-time. Customizable geography descriptions for effective dates, transit times, zones, lanes, and notice of expiring agreements can be integrated into the profiles of carriers.
4. Integration with leading ERP, WMS or OMS system
Information silos are the enemy of the connected supply chain. By incorporating TMS information with other inner sources of data, such as ERP and WMS or OMS, the businesses can attain approximately real-time visibility into products from purchase through inventory and transportation. This integrated outlook of the products through the whole supply chain can be realized through a single portal that gets data from several sources, combines it and offers it in a searchable and easy-to-use cockpit that acts as a single reference point for tracking visibility through the supply chain.
Through ERP and WMS or OMS - TMS integration, manufacturers and distributors are intending to strengthen end-to-end visibility across shipping and warehouse functions like order processing, record access, and general ledger information, offering a more all-inclusive view of processes that should result in better planning and coordination (Stackpole, 2014).
5. Reports and Business Intelligence
Reports are one of the simplest means to comprehend and convey important information. Therefore, when choosing a TMS, it should provide classic reporting tools like charts and dashboards along with specialized maps to visualize patterns of shipping. Reporting can give rapid means of sharing vital data and analysis which can be helpful in understanding trends. Furthermore, a TMS needs to have a logistics KPI (key performance indicator) reporting function for transport.
For example, the TMS system employed by Transwide Analytics uses visual reports covering key transport metrics to offer a comprehensive performance view, individual carrier scorecards, and freight costs. This provides actionable insight to create smarter, faster, data-driven business decisions (Transwide, 2019).
Must have: Security
In addition to reporting, a TMS system protects the business from data breaches, has sufficient backup processes, and can meet rising performance demands as the needs change. As per the experts, a good TMS should always maintain security and safety for consumers. Key statistics should only be available to approved users, whereas outside users should only be able to access the system by invitation. Furthermore, all user logins should be recorded through an integral access logging process, and the events log keeps track of all main events in a shipment or cargo’s progress.
TMS platform should also be equipped with security management kit software that detects unauthorized hardware or software changes with the management of profile. It should block Windows access to outsiders, usage of non-approved USB mass storage devices and assist the administrator securely managing BIOS (basic input/output system) passwords with access management (TMD Security GMBH, 2018).
Overall, it can be concluded that TMS can act as the enabler of seamless local and global trade and supply chain management. Consequently, when looking for a TMS to streamline the supply chain, it should have the features such as powerful route optimization engine, real-time tracking, carrier contracts management, ability to be integrated with leading ERP, WMS or OMS systems and the reporting.
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Top 5 features to look for in a Transportation Management System (TMS)