How to Select the Best Transportation Management Software for Your Business
Transportation Management Software (TMS) improves the interaction between the order management system of a company and its system dealing with warehouse management as well as the center of distribution.
The main goal of Transportation Management Software is to study all the processes involved in the coordination and planning of delivering persons or goods from one place to another and help with the planning and execution of transportation. Transportation Management Software serves as the management center for logistics in a shared channel of carriers, customers, and shippers. The main modules of Transportation Management Software are load optimization, route planning and optimization, yard management, carrier management, advanced shipping, and order visibility.
Transportation Management Software mostly is vital between a legacy order processing module and distribution module. A typical example of this is the Transportation Management Software suggesting routing solutions between inbound orders and outbound orders to be evaluated. Transport management software has the ability of defining the most efficient transport schemes based on the company’s parameters.
With Transportation Management Software, companies are able to maximize the return on the user’s transportation spend and accurately forecast on demand and shipment volumes.
Transportation Management Software allows the implementation of transportation plan such as carrier dispatching, therefore allowing companies to follow up any administrative operation relevant to transportation such as editing of reception, sending of transport alerts, and invoicing and booking of documents.
Transportation Management Software manages the following processes of transportation management; transportation execution, transport follow-up, planning and decision making, and measurement. The processes enable Transportation Management Software to handle management of maritime transport, tracking transportation in real time, setting up of transport costs and scheme simulation, optimizing and planning of terrestrial transport rounds, optimization of vehicle load and route, and batching of shipment orders.
Transportation Management Software can be linked with ERP systems. Linking up with ERP system, Transportation Management Software has the ability to generate electronic load tendering and tracking of the executed optimized shipment with selected carrier.
What are the Features of Transportation Management Software
Transportation Management Software provides the following features; automated carrier selection, route optimization, shipment consolidation, freight estimate optimization, freight estimate optimization, freight settlements and payments, mode and carrier selection, carrier contact management, international logistics functionality, integrated warehouse management system, multi-modal transportation facility, track and trace, analytics and business intelligence, product visibility, parcel shipping support, benchmark data capability, yard management, and risk management.
- Automated carrier selection: It enables you to determine the smartest carrier and mode options for each delivering, therefore improving the procurement process.
- Route optimization: It enables you to determine the most efficient route to save and gas and maps by using traffic data, road speeds, maps, modal limitations, and fuel costs.
- Shipment consolidation: It enables you to cut shipping costs by scheduling shipments and arranging them in efficient sets, therefore maximizing their load consolidation.
- Freight estimate optimization: It provides an excellent platform for calculating the cost of delivery based on mode of shipping, cargo weight, and delivery distance.
- Freight settlements and payments: It enables your accounting staff to work on invoices with audit freight and shipment bills, create vouchers and payments, allocate costs, and reducing payment errors and establishing tolerances for match-pay settlements.
- Mode and carrier selection: It enables you to select the most suitable selection of carrier and mode of transport that is based on service requirements in terms of distance, efficiency, and cost.
- Carrier contract management: It provides an excellent platform for tracking all your individual terms and carrier agreements in real time, displaying of the total costs that includes accessorial charges that enable you to pick the lowest cost carrier.
- International logistics functionality: It supports foreign currencies, multi-language interface screens, and helps you to select ocean or air carriers.
- Integrated warehouse management system: It enables you to get real time information about your warehouse facility such as dispatching the shipments.
- Multi-modal transportation facility: It enables you to guide your freight to be transported using other forms other than road, therefore enabling international business.
- Track and trace: It provides an excellent platform for allowing real time exchange of shipment information between distributor, carrier, and customer.
- Analytics and business intelligence: It enables you to use warehouse data proficiently, improve functionality of dashboard, and improve on generation of reports in modern formats.
- Product visibility: It provides you with the full visibility of your products and tracks the entire shipment status for you.
- Parcel shipping support: It enables you to handle parcel rating and routing.
- Benchmark data capability: It enables you to benchmark data that you need for negotiating collected from service information and carrier rates.
- Yard management: It enables you to oversee the movement of trailers and trucks in your company’s manufacturing facility, warehouse as well as distribution center.
- Risk management: It provides an excellent platform for automating audited process and generating of reports that are in line with the country’s cross-border customs requirements and regulatory programs, therefore enabling you to avoid international shipping risks.
What are the Key Performance Indicators (KPI's) of Transportation Management Software
The key performance indicators of Transportation Management Software are; freight cost per pallet shipped, percentage of sales related to outbound freight costs, transit time, accuracy of freight bill, percentage of truckload utilized, mode selection versus optimal, shipment traceability, on-time pickups, and on-time delivery.
- Transit time: It enables you to calculate the number of hours and days between collection from you to delivery and paying of customers.
- Freight bill accuracy: It enables you to calculate the magnitude of freight invoices that are error-free by the sum of magnitude of invoices from freight.
- Mode selection versus optimal: It enables you to include all combinations of transport modes such as rail, air, and road.
- Percentage of truckload utilized: It enables you to know the utilized truckload by analyzing volume of freight carried against real vehicle capacity.
- Shipment traceability: It enables you to track and trace your fleet.
- Freight cost per pallet shipped: It enables you to know the cost of each pallet shipped by dividing total costs of freight by the size shipped units per period.
- Percentage of outbound freight costs on net sales: It enables you to know the cost of outbound freight by dividing freight costs per net sales.
- On-time delivery: It enables you to automatically calculate the delivery time by using POD and other business intelligence.
- On-time pickups: It enables you to know how often your transport provider arrives within the required time.
What are the Benefits of Transportation Management Software
Transportation Management Software provides the following benefits; warehouse efficiency, cash flow improvements, inventory reduction, advanced delivery capabilities, increased customer service, reduced freight expenses, track deliveries in real time, minimize paperwork and errors, and increase supply chain efficiency.
- Warehouse efficiency: It helps you to reduce time spent on management of freight and increase the time of working on duties of the warehouse.
- Cash flow improvements: It helps you to reduce the shipper payment per freight invoice.
- Inventory reduction: It provides an excellent platform for planning better for your inventory and also enables you to have an accurate forecast of your inventory.
- Advanced delivery capabilities: It helps you in creating a master bill for lading, therefore enabling you to have individual logins with the use of your multiple locations which are manageable by one person.
- Increased customer service: It is achieved by getting valuable information on how many times customers receive their products on time, therefore making sure your customers face no delayed deliveries.
- Reduced freight expenses: The transportation management system provides savings by optimization and analytics on how to reduce freight spend.
- Track deliveries in real time: It provides you with the information on the amount of time a route takes, therefore helping you to create an efficient route schedule.
- Increase supply chain efficiency: It is achieved through tracking of inventory, track deliveries, and other processes allowing you to increase productivity.
- Minimize paperwork and errors: It is achieved as all the accounts are automated, therefore reducing time spent on paperwork and also carrying of quotes forward to an invoice, hence reducing any incorrect billing.
What are the Latest trends in Transportation Management Software
The latest trends in Transportation Management Software are; outsourcing of freight data and payment management, addressing the truck driver shortage, increase of collaboration and inter-management of transportation management trends, and use of IoT to fix today’s logistics industry.
- Freight data and payment management outsourcing: Shippers now use big data analysis and software-as-a-service systems to help them outsource freight data.
- Address on the truck driver shortage: Transportation Management Software is now providing strategic approach to logistics that will address the truck driver shortage.
- Collaboration and inter-management trends: The TMS system is increasing collaboration with transportation management trends to achieve a greater return on investment and lower shipping rates for the client.
- Use of IoT to fix logistics problems: Iot is applied to warehouse processes, therefore improving warehouse processes.
How to choose the right Transportation Management Software
Choosing and purchasing Transportation Management Software is a tedious process as the benefits and features differ from each other. The following is what to consider when choosing and purchasing Transportation Management Software;
You may like to read: Top Transportation Management Software and Top SaaS, Cloud Transportation Management Software
- Plan: The TMS system should meet your immediate business plans so that the implementation is successful and achieve a quick ROI.
- Price of the system: You have to know the line by line pricing of the Transportation Management Software, that includes installation prices, the price should be affordable.
- Billing capabilities: It should be handle the different ways you bill your clients.
- Integration: It should be able to integrate with other internal systems you own such as the ERP software.
Top Transportation Management Software
You may like to read: Top Transportation Management Software
Top SaaS, Cloud Transportation Management Software
You may like to read: Top SaaS, Cloud Transportation Management Software