Logistics is crucial to any business operation, especially for the industries that make consumer goods available to the market. The timely and systematic transfer of goods, supplies, equipment, and people make up the core of supply chain systems. Logistics, therefore, is integral to all businesses that get materials, labor, and business process solutions from partner suppliers within and outside their country.
The bigger the enterprise, the more complex the logistics. To help simplify, automate, and streamline these processes, transport companies and businesses use specialized software that aids in planning, executing, and monitoring the movement of goods. This software is called a Transport Management System or TMS.
What does TMS stand for in logistics? What is its purpose, and how do businesses benefit from using TMS software in logistics and supply chain management? Below, we answer these questions and delve into further detail about TMS.
What Is TMS?
Supply chain managers, finance officers, and owners of transport businesses will already know what is TMS in logistics and why it's essential for commercial enterprises. Transport management software provides an all-in-one platform that offers three primary tasks:
- Find different shipping or carrier options and compare their prices
- Book shipments
- Track shipments from pick-up or drop-off to delivery
The most common users of TMS logistics software are shipping companies, carriers, and businesses that facilitate logistics to other firms. Other industries benefit from it, too, primarily retail and manufacturing. Wholesalers, retailers, distributors, e-commerce businesses, and businesses that produce or sell consumer goods are among the top users of TMS.
If you belong to these industries and still don't utilize TMS, now is the best time to learn what does TMS stand for in logistics and how your business can benefit from it.
Five Ways Business Logistics Benefit from TMS
Using TMS software in logistics management helps businesses in many ways:
- Improving Efficiency
Before TMS existed, supply chain professionals and warehousing staff painstakingly tracked goods and inventory by checking and counting all items, and logging the numbers into record books by hand. This system has worked for many decades but is prone to errors and demands a large staff.
TMS exponentially cuts down manual work by automating and streamlining procedures and eliminating redundancies. For example, warehouse employees no longer have to do menial, repetitive tasks like counting inventory every other day because all sales and new stock will have been logged in the TMS.
TMS also pulls through for logistics companies whenever a vehicle breaks down en route to delivering cargo. Instead of spending hours on the phone looking for nearby service providers, companies can get the information from the TMS platform immediately.
- Increasing Visibility
TMS makes it easier for organizations to ensure data transparency and accessibility. People authorized to access the platform can track goods and materials in real time. Analysts can determine if current supply chain solutions are efficient or have much room for improvement. TMS also syncs with electronic logging devices (ELDs) and provides platforms for planning trips and setting drivers' schedules.
Since TMS provides real-time pricing and scheduling information from transport companies, order fulfillment and supply chain specialists can quickly pivot and modify logistical decisions as soon as vital indicators like price or transport duration cross certain thresholds.
- Achieving Scalability
TMS automates data entry, enterprise resource planning (ERP), warehouse management systems (WMS), and transport management, among other things. It becomes easier for transport operators and enterprises to scale up or down, depending on the current market demand. TMS technology empowers supply chain and logistics teams, enabling them to manage a large number of shipments at once during seasonal peaks.
- Maximizing Integrations
Selecting a TMS that offers many integrations can help improve logistics for businesses that use transport and courier services and the carrier companies themselves. For example, a trucking company can issue fuel cards to their drivers and electronically send money for fuel instead of disbursing cash. All card recharges are tracked and recorded electronically, so it's easier to monitor expenses and collate the sums for accounting.
Improved efficiency and operational visibility, but with less data entry – the additional integrations in TMS can make your workflows more efficient.
- Make Customer Service More Agile
TMS gives businesses a plenty of useful logistics information, allowing them to be more agile in accommodating customer needs and demands. For example, many customers choose cheaper shipping options even if it means waiting days or weeks to receive their purchases. However, the reverse happens during the holidays: many shoppers will pay more for same-day delivery whenever possible.
TMS simplifies the supply chain process across geographic boundaries, carriers, and transportation modes, reducing the time and resources needed to plan and execute shipments. Since you can compare shipping rates across carriers and routes, you can offer cheaper or faster shipping options, depending on what your customers need.
Shopify reports that 74% of consumers want to see shipping costs upfront, and 68% want to know the estimated times of arrival (ETA) when buying online. With TMS, businesses can provide this information and gain more customers.
Knowing these benefits offers insight into what is TMS in logistics and supply chain management. In the next section, you'll find additional context and examples of what TMS brings to logistics operations.
More On the Role of TMS in Logistics
Carriers and companies that use TMS software in logistics management utilize different carriers' pricing and scheduling information. The platform allows them to plan supply chain routes to deliver goods and supplies to their intended destinations – safely, quickly, and affordably.
Earlier versions of TMS only support one mode of transport, but many platforms today offer information on two or more. These multimodal and intermodal TMS platforms help users facilitate transport over land, air, and sea via cargo planes, ships, trains, and trucking services.
Using TMS in logistics planning allows users to:
- Access information repository for all logistical and supply chain activities.
- Have a reliable communication system where they can plan, deploy, and track shipments in one place.
- Automate logistical data entry (including customer orders, their chosen shipment options, and couriers).
- Have an order management system (OMS).
- Integrate their order management system and ERP into logistics management, making it easier to track inventory and sales.
ERP functionality alone brings several process systems into the fold:
- Order management
- Inventory management
TMS platforms can also provide WMS functions:
- Inventory tracking
- Order fulfillment
- Warehouse staff management
Get the Best Out of TMS From Miler
There's no denying the benefits of using TMS in logistics. Unfortunately, not all TMS are created equal. Some TMS platforms support more third-party integrations than others, for example. Others boast extensive customization options that allow companies to save on costs (i.e., paying only for TMS features your company needs).
To enjoy the maximum benefits of TMS, choose a software provider with a stellar reputation in the tech and freight industries.
Miler, an end-to-end transportation and fleet maintenance platform, has unparalleled expertise developed over decades of bringing custom TMS solutions to customers. We have implementation engineers ready to assist in setting up new accounts for businesses and a customer support team ready to offer live or offline technical support.
We're happy to answer any other questions about Transportation Management Systems. Contact Miler today to learn more about our pricing, software, and services.