For thousands of companies, a TMS (transportation management system) serves as the backbone of operations, logistics, and fulfillment.
Whether your company brings in six or seven figures a month, a TMS (transportation management system) can help you save a significant amount.
But what exactly is a transportation management system? How do you choose the right TMS for your business?
In this article, we will talk about what a TMS is and what you must look for in one.
What Is a TMS?
TMS stands for transportation management system. As its name suggests, a TMS lets companies manage their transportation operations. Since you have to operate a TMS digitally, your processes get automated. This means that you do not have to manually check everything related to your transportation operations. A TMS also gives you access to the best routes. The system will first evaluate your shipping orders, then suggest the best routes your vehicles can take to deliver orders. After this, your TMS can execute the shipment with the best carrier. Your TMS can then give support in terms of freight audit and payment. By doing this, a transportation management system lets you save time and money. In particular, you save your and your client’s time. Additionally, you don’t have to waste gas and money hiring someone to monitor your transport-related needs. But you don’t have to take our word for it. According to Logistics Management Magazine, companies that use a transportation management system can save approximately 5% to 10% on transport costs.
How to Choose the Right TMS: 5 Things to Look For
TMS can improve streamline processes, decrease overall transportation costs, and offer total supply chain visibility.
To help you choose the right TMS for your business, look for the following:
Ability to Integrate with Other Systems
Delivering orders to your customers all over the globe is a complex business that requires accurate tracking, visibility, and reporting across the supply chain.
Doing the said things efficiently and properly means that the systems or software you use must be able to integrate with each other.
In addition, doing these offers a lot of benefits. For one, having your electronic logging device or tracking software connected to your TMS, your clients can see where their shipment is without having your dispatcher make disruptive calls to your drivers.
Integrating an excellent transportation management system like FlexTMS with accounting software like QuickBooks (please link the preceding red phrase to the QuickBooks article). also automates your billing. Billing your customers becomes as easy as clicking a few times rather than tedious data entry from one system to another.
In a gist, a robust TMS must have the ability to integrate with many systems, whether it be on-premise or SaaS via an API (application programming interface).
Other systems of software you can integrate with a good TMS include warehouse management systems, customer relationship management systems, and fleet management systems.
Ability to Give Useful Insights
Your TMS should also have the ability to give useful insights. This is one quality many entrepreneurs miss. As a result, it cost them thousands of dollars.
When you deal with a lot of shipments, logistics, and customer service, it becomes hard to see the bigger picture. By the bigger picture, we mean the insights that can help grow your business.
One of the TMS features that can positively impact your business is the ability to determine trends and turn data into actionable steps that will scale your business.
These insights can also help determine whether you are meeting your KPIs (key performance indicators) or not. Your KPIs might include transportation duration, transport cost per unit shipped, percentage of loaded miles, driver safety scores, and driver turnover rates.
Hence, finding a TMS that can help you indicate whether you meet your KPIs or not is crucial.
Has a Fair Cost
Another factor you must consider when looking for a TMS is cost.
Contrary to popular belief, the cheapest transportation management software you can find is not always the best one. The best TMS has all the things you need for a reasonable price.
So, look beyond the TMs cost and look for a system that allows you to integrate with your existing systems, offers valuable insights, and offers excellent support. Choosing a TMS like this keeps your expenses lower and enables you to respond to your customers’ needs efficiently.
In addition, watch out for TMS vendors that offer an extremely low-cost solution. Many of these vendors often charge you extra for changes and support later. Over time, these costs pile up, making you spend more than what you would on a proper TMS.
Any TMS must be a cloud-based software. However, we include this factor in the list because you must evaluate the cloud service provider a TMS partners with.
Since a TMS must be cloud-based, TMS providers leave the management of servers, data security, upgrades, and other data-related actions to the experts. Hence, you must make sure that your TMS provider leaves your data in the hands of a capable and reputable company.
For instance, FlexTMS partners with Amazon Web Services (please link the preceding red phrase to the AWS article). By doing this, FlexTMS provides fast, secured, and reliable services to its clients.
Features Multimodal Transport
This is not a required feature for every business looking for a TMI. However, if your company currently includes or plans to include multimodal shipment, you must choose a TMI that supports all the modes of transportation you use.
These modes include railway, sea, air, and road. If you currently use or plan to use these modes, you should also consider the ability to support cross-docking and local & international transportation.
A transportation management system streamlines your processes, saves time & money, and generally makes your business life easier. By having a TMS that lets you do all of these, you get to spend more time doing things that highly matter to your company. Are you looking for an all-inclusive transportation management system that lets you work on what highly matters to your business? Check out FlexTMS now!