What is a Transportation Management System?

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inventory management

Technology has become the cornerstone of warehouse productivity in an age where e-commerce businesses rely on fast and accurate order fulfilment services.

Many 3PL (third party logistics) providers incorporate the use of a transportation management system (TMS) to maximise warehouse efficiency, ensuring customer orders are shipped out as soon as possible.

This article covers the functions of a TMS as well as the benefits this has to both warehouses and e-commerce businesses.

What does a TMS do?

A TMS is a cloud-based platform that aims to improve operations within supply chain management, streamlining the entire transportation process.

The main aspects of a TMS include:

Planning and decision making

Using business insights, a TMS can identify the most efficient transportation process for goods under one dashboard. This feature ultimately helps to save on transportation costs by reducing the number of vehicle journeys and identifying shorter routes.

Transportation execution

With a TMS able to identify efficient transportation methods, warehouses can quickly create a strategy for specific functions such as dispatch and carrier rates.

Visibility

A TMS allows all members of the team to view and track the entire shipping process, ensuring an end to end visibility.

Reporting

A TMS can efficiently run reports so businesses can review key performance indicators, allowing you to measure the efficiency of processes and identify any areas of improvement.

Benefits of a TMS

The use of a transportation management system has a variety of benefits when it comes to improving order fulfilment efficiency, impacting both warehouses and e-commerce businesses.

Leading technology

The ability to view all aspects of the transportation process under one dashboard allows businesses to monitor, organise and manage the shipment process in the most productive way possible, helping you to save both time and money.

Simplify processes

A TMS allows warehouses to locate the right carrier for your shipping needs, quickly identify the most efficient route with real-time tracking, taking away the stress of the entire transportation process. Automated processes and lack of human intervention also reduce potential risks in order and shipment errors.

Tracking freight

The ability to track the entire shipment process allows businesses to be aware of any delays, with regular alerts, ensuring you are kept informed from the moment items are shipped to customer delivery.

Review analytics

With a TMS able to provide accurate reporting, businesses can review productivity within the transportation process, helping you to make informed business decisions in the future.

Improved customer service

With access to real-time data, businesses can inform their customers of any potential shipping delays, keeping them informed and updated throughout the duration of the shipping journey.

How is a TMS different from a warehouse management system?

A transportation management system is often integrated with a warehouse management system (WMS) as well as an enterprise resource planning (ERP) system.

Each of these systems provides different functions but can ensure maximum efficiency when used in conjunction with another.

A WMS solely tracks and manages movements within the warehouse such as inventory management, picking and packing.

An ERP system is a piece of software that integrates a variety of business processes, including accounting and human resources.

TMS challenges

Whilst transportation management services can be incredibly beneficial, there are several challenges which businesses could face:

Quote organisation

When dealing with multiple couriers, it can be challenging to maintain an organised system for the many different quotes you will receive from various carriers. As a result, it can be taxing when comparing costs between carriers.

Selecting the best carrier for the job

With customer orders sent all across the country, it is difficult for a TMS to determine the best carrier for a particular consignment.

Tracking multiple shipments

It can become confusing when warehouses are required to monitor multiple shipments in different countries, as this often has to be monitored via a separate dashboard.

Whilst there are a handful of challenges with the implementation of a transportation management system, it undoubtedly improves warehouse productivity as well as customer service on the whole.

Do you feel as though your e-commerce business could benefit from improved efficiency and customer service? It could be time to outsource your order fulfilment and give Pointbid a call on 0121 326 7368. With over 50 years’ experience in 3PL logistics, we can provide your company with a first-class fulfilment service.

 

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