Using a Transportation Management System

Benefits of Using a Transportation Management System

A transportation management system can provide countless benefits to your business. Here are some of the positive effects a TMS can have for your business.

Cutting Costs
For most companies, the first and foremost reason for implementing any change is the potential to save money. Properly implemented and used, a TMS definitely has the potential to do just that. In fact, most of the other benefits on this list play into cutting costs and reducing spend on transportation and across the supply chain.

Savings come from several parts of the TMS: optimization, analytics, and more efficient processes. The actual cost of doing business in transportation (payment, auditing, consolidation) are frequently lower when a TMS is utilized.

Supply Chain Visibility
Visibility is a big issue for most companies who need a supply chain. Though it’s a priority for most organizations, very few companies feel they’ve truly achieved visibility throughout their supply chain. A well-integrated TMS can provide visibility, accumulating data and real-time information that can be used in more functions that just transportation.

More Efficient Routing
Routing software is one of the best cost-saving measures TMS can offer. Better routing means lower freight costs. Routing improvements wrought by TMS could come from the ability to route more complicated loads easily, helping save on wasted space and wasted miles.

Ability to Track Drivers and Their Loads
This benefits not only transportation operations, but also procurement, warehouse operations, and your end customers. Knowing where your raw materials or freight are is a critical point in warehouse planning, plus you can keep customers apprised of where their shipments are, improving relations and helping them plan, as well.

Cuts Down on Paper
Hard copies can be a real pain. You’ve got to print them, which comes with printing and paper costs. You’ve got to store them, which takes up space and leaves the documents vulnerable to things like flooding or pests. Important documents can be easily misplaced or misused. Plus, people just hate paperwork. A transportation management system can drastically cut down on the amount of paperwork needed for transportation operations, plus it cuts down on the human data entry down the line and the mistakes that go along with that.

More Effective Warehouse Planning and Productivity
Many of the other points on the list come together to equate a good TMS to better warehouse planning and productivity. With up to date information from transportation, warehouses can operate more efficiently. They can staff based on freight they know will be coming in or going out, and they can better control inventory when they’re in the loop on transportation’s capabilities at a given time.

Improved Customer Experience
A TMS lets you track carrier performance so that you can provide your customers with the best possible service, potentially providing the ability to analyze the true cost of shipping rather than just the immediate monetary output. More efficient warehouse and routing software may mean getting freight to its destination faster. TMS tracking features may make it easier for you to keep your customer in the loop, as well.

The Final Word
Maybe you already have a TMS, but does it meet your company’s needs? Does it provide you with all the benefits listed above? If not, give us a call at 800.MY.SHIPPING to see how we can help.

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Independent research shows that improved supply chain management can yield:

  • 25 – 50% reduction in total supply chain costs
  • 25 – 60% reduction in inventory holding
  • 25 – 80% increase in forecast accuracy
  • 30 – 50% improvement in order-fulfillment cycle time
  • 20% increase in after-tax free cash flows
  • Supply Chain Mapping

  • Review Market Conditions

  • Determine Operational Inefficiencies

  • Outline Opportunities

  • Implement Changes

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