A lot goes on between the shipping and receiving dock. When freight travels, its route, shipping price, and mode of transportation need to be sorted.
When considering software types to manage your shipping operations — within the company or at the warehouse — the two most recognized systems are Enterprise Resource Planning (ERP) and Warehouse Management Systems (WMS). Each system offers automated functionality to perform a wide range of tasks and processes. Yet, there is another system that goes hand-in-hand with these applications.
Transportation management systems (TMS) are used by retailers, e-commerce businesses, manufacturers, distributors, and logistical providers to handle freight movement. This system’s basic role in the supply chain is to help businesses plan and execute the movement of freight between destinations, all while identifying processes that can become more efficient and cost-effective.
What Is a TMS?
Transportation management systems are used to streamline manual tasks by providing more automated functions. The basic features of a TMS involve providing rating, booking, and transportation processes. A TMS can determine the amount of freight that needs to be shipped, obtain rates for the freight shipment, decide on the path that the freight will take, and book the modes of transportation that will handle the cargo for the entire shipping process.
The system does this by focusing on three main aspects: planning, execution, and optimization.
- Planning: This feature allows companies and shippers to decide on the best modes of transportation to take with the appropriate carriers. Instead of contacting each carrier separately and finding the best rates, the TMS scours far and wide for carriers, low rates, and other offered services. It then places all the information on the same screen. The user can view all the options and shipping rates at once to select the right carrier and mode of transportation to use.
- Execution: A TMS offers a wide range of executable functions based on the application that it offers. The system can assist with freight billing, match loads, import orders, communicate with carriers, generate shipment documents, and track shipments. Other systems may offer advanced features such as invoice resolution and settlements and import/export documentation.
- Optimization: The optimization features allow companies to figure out what processes are working and where inefficiencies may exist. The system provides scorecards of carriers based on previous shipping history. It can also track performance and analyze data regarding shipping lanes. A company can then determine which transportation routes and carriers performed better than others to find the most cost-effective options while saving on costs.
There are two types of transportation management systems available on the market today: cloud-based and on-premises. While each will have the same basic functions, some key differences will set them apart.
An on-premises TMS provides a centralized location on your network systems. It pulls information from every computing device connected to that network. Then it can extrapolate the desired information and display it on an easy-to-use dashboard for quick use.
A cloud-based TMS system can also centralize all company computing systems, yet it is managed through the cloud. This system provides a faster way to deploy its capabilities without dealing with the company’s IT department handling all the security and upgrades.
Benefits of a TMS
A logistics TMS provides a wealth of benefits, especially when you are looking to select carriers, track shipments, and perform invoicing using real-time data. The top benefits include:
- Centralized capabilities: All carrier information, rates, shipment tracking, and other functions are accessible through one platform. You can easily pull up this information from any location, making it a benefit to remote workers.
- Shipping visibility: With a TMS, you know where shipments are at all times. Carrier information and supply chain updates are available in real-time, so you can always track the movement of shipments.
- Cost spending analysis: With this benefit, you can understand all TMS shipping rate charges and fees upfront. You can then comparison shop for the best rates and continually evaluate costs to make the most cost-effective decisions.
The main benefit of a TMS is to make it easier for manufacturers and businesses to select carriers, track shipments, and invoice customers. It provides a centralized network so that all data is easily accessible and can obtainable in real-time.
WSI Solutions for Freight Shipping
Here at WSI, we invest in the right technologies that help us offer tailored logistical services to our customers. We use a state-of-the-art global transportation network to oversee the transportation for all shipments so customers can take advantage of these optimized services.
Our transportation network uses comprehensive software solutions — that includes TMS functionality — to further process, dispatch, track, and bill shipments efficiently. Contact WSI today to learn more.