What is a transportation management system (TMS)?
25 November 2020
Written by: Andreas Grundsell
Are you looking for ways to improve visibility and efficiency across your freight operations? A transportation management system could be the answer. Here we outline the basics, benefits and how to get started.
What is a transportation management system?
A transportation management system (TMS) is a platform that helps organisations prepare, execute, settle and analyse freight operations. A TMS is primarily designed for the freight buyer to plan freight movements, perform freight rating and shopping, select the appropriate route and carrier, and manage freight bills and payments.
A TMS serves as an all-in-one to:
increase efficiency and lower costs for your company;
meet external requirements to improve service level and competitiveness; and
comply with regulatory, environmental and market requirements.
TMS solution providers generally focus on different aspects of the freight procurement process. Some emphasise planning while others focus on tendering, execution or settlement. Practically all of them offer data analytics and visibility solutions, often referred to as “control towers.”
“A TMS is a platform that helps organisations prepare, execute, settle and analyse freight operations.”
It is also useful to understand what a TMS doesn’t do; it’s not a tool to optimise the real-time utilisation of transport assets. If that is an area of interest for your organisation, you should direct your attention towards route optimisation and fleet management systems. A TMS is primarily designed for the freight buyer.
Benefits of using a TMS
Use of a transportation management system is your path to:
Reduced freight costs
Increased control of shipments
End-to-end visibility of freight procurement and operations
Full track and trace of orders
Streamlined invoice management
Automated invoice validation
Accurate, real-time purchasing data
High-quality analytics for better decision making
Resilient, future-proof freight operations
Removing manual tasks is the first step to using your resources more efficiently, and TMS is a sure-first step in the right direction.
Take the first steps
If you consider the control and management of your products all the way to your final customer a core process, a TMS is something you should have in your company IT portfolio. Companies with an in-house TMS open up great potential for organisation-wide digitalisation and the benefits that come with it.
“Consider a TMS with scalable features that you can add to fit your short and long-term needs.”
To choose the best TMS for your company, consider one with scalable features that you can add to fit your short and long-term needs. Make sure the provider you choose is cloud-based and focused on high-quality analytics and end-to-end visibility. Service providers with a smart business network in their core offering ensure wide-reaching connectivity, interoperability and global regulatory compliance.