How does a TMS optimize logistics processes?

21 September, 2022 All about logistics

Transport is considered the core of supply chain because of the vast amount of decisive processes that derive from it – transfer, supply, and distribution; and for the competitive factors it affects – the cost of logistics and customer service.

We can simplify this complex process with a Transport Management System (TMS), which optimizes and makes the gathering, storage, processing, and distribution of information relating to the transport of products more efficient. A TMS may be operated by the companies themselves or by suppliers of logistics services.

There are currently TMS platforms that compare different transport companies to find out which one is better for each cargo and, thus, guaranteeing clients get the best service for the best price. The main function of a TMS is to optimize the operation and the administration of merchandise transportation in its diverse modes: land, sea, air, FTL, parcels, and others.

Usually, a TMS is part of a set of special technology systems for supply chains that integrate into other ERPs (Enterprise Resource Planning), WMSs (Warehouse Management System), FMSs (Freight Management System), YMS (Yard Management Software), among others.

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A TMS helps define the most convenient transport as per parameters such as costs, time, stops, order groups. They provide visibility for monitoring based on a history that includes pick-up, unloading, customs broker, etc. TMS also issue alerts in events such as delays, accidents, and unforeseen stops besides creating performance indicators reports relating to transport.

If we do not carry out a thorough analysis for choosing the best TMS, it will be harder to get a good return on investment. Evaluating, recommending, and managing the TMS platform that better suits the needs of a company is among the main services of a logistics company.

With a TMS, a specialized logistics company helps clients simplify transport planning processes, select suppliers per type of equipment and means of transport, optimize cargo according to routes and capacities, simulate costs and time, manage reports and statistics, and validate invoices.

Companies that outsource a transport management system through a specialized logistics company gain great benefits such as:

  • A reduction in transport costs due to a better planning and systematization of exceptions.
  • Improved levels of service that translate into increased sales.
  • Tighter control of the operation due to the optimization of transport management.
  • Improved cargo consolidation that leads to a level unreachable through manual analysis.
  • Process efficiency by avoiding mistakes caused by manual procedures; resulting in lower costs.
  • Monitoring of freight suppliers that allows for fee negotiation and improved service.

It is worth noticing that a TMS lets you optimize transport processes by making the best use of technology; therefore, going over their quality and efficiency is fundamental before automating them in the tool. Otherwise, the investment in software will be wasted by solving basic tasks that do not correctly meet the department’s goals.

The implementation of a transport management software must meet the specific needs of each company and see beyond brands, names, or history; otherwise, we run the risk of buying the wrong tool that does not meet the requirement of the organization, affecting competitiveness and having a negative impact on the clients’ experience and loyalty.

As part of their services, specialized logistics companies can offer the right TMS to meet the specific needs of your company because they acknowledge that this tool is the key to achieve a better efficiency and optimize not only the supply chain but the entire business.

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