What Is a Transport Management System?

Transport Management System

A transport management system is a Cloud-based logistic-solution software designed to efficiently and economically manage the transportation process and the subset of supply chain management.

Therefore, it is the best technology that will significantly allow you to efficiently plan, ship and track and deliver goods or products from one place to another.

Larger supply chains like Freight companies, the manufacturing and retail industry, e-commerce organization, and distribution companies have employed TMS for conveying and delivering the products in real-time.

Tracking the physical movement of goods is not easy but is an essential link that will ensure the goods have been delivered as documented, thereby minimizing complications around stock management.

Table of Contents

How Transport Management System Work?

TMS works by helping an individual how to plan, execute and optimize the physical movement of products.

However, for TMS to be functional, you must feature or integrated it with three central supply chain management systems, that is enterprise resource planning {ERP}, Warehouse management system {WMS}, and global trade management application {GTM}.

Integrating TMS with SCM will help you have robust carrier systems, data sources, transactional and communication systems.

Since the Warehouse management system is integrated with TMS, it will facilitate automatic entry of orders and coordination of tasks.

The primary role of WMS is to manage the inventory, which will automatically track the chain of the product movement from shipping to delivery.

Therefore, the WMS update will automatically update the ERP system, thereby updating the inventory.

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Hence, providing an efficient, economical, and straightforward transport management system for the invoice, order, and inventory.

TMS prepares and executes transportation from the ERP data stream, which has detailed information about the client and the order.

The client information is essential because TMS will update the client about the shipment and order status and customer relationship management.

After executing the shipment, the TMS returns information regarding the shipment to the ERP system for order management and accounting.

What are the Functions of Transport Management System?

Understanding how TMS works will help you maximize control and manage the shipment of products from one location to another.

Thus, it is purposely designed for the following functions, they include:

Freight Planning and management

Planning how you can deliver the product from one point to another requires an optimal model that is safe and secure.

Therefore, with TMS, an individual can plan and decide based on shipping mode depending on its cost and efficiency, the distance, and the route.

This is because TMS is capable of providing information regarding the transit time and trade and tariff quotas.

Hence, minimizing delays or time spent on the booking process and delivery time through traffic management.

Furthermore, it will help an individual to handle the workflow and paperwork for freight management, such as contracts and load tender for carriers charge for shipping.

Executing

TMS can help an individual to simplify the shipment process by matching the loads, evaluating the merchandise, and documenting for stock management.

Tracking the shipment of products will also be efficient since they will provide a real-time status update of the load to the distributors and the client after dispatching the carriers.

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Additionally, TMS will also alert unforeseen delays that might occur on the route, thereby providing transit exceptions for untimely delivery.

Optimization and Administration

Since TMS can plan and execute the shipment process, an individual can improve their chain supply management system.

And for that reason, an individual will have a real-time status update report regarding the analysis on delivery and carrier performance.

The significance of analyzing the shipment performance will offer a flexible and fine-tuned supply chain management system in-depth insight.

Moreover, it can provide the reserved information on custom reports for analysis to discover and eliminate discrepancies that might arise, thereby providing transportation intelligence.

Benefits of Transport Management System

Incorporating TMS into your business will benefit you through the following ways:

  • It improves the management of inventory by providing better visibility of the supply chain network. Hence, providing an efficient way of tracking the product movement from the warehouse to its financial destination.
  • It helps to reduce administration costs like documentation and billing because it significantly minimizes invoicing errors. Nevertheless, it also cuts down the distribution and warehouse costs by ensuring better coordination between the carrier and fleet management.
  • It ensures the orders have been delivered on time to the client, improving shipment services and client satisfaction. Besides, clients are also able to know shipment status.
  • It offers a detailed solution and insight capabilities that will allow an individual to access custom reports and invoices and create easy to analyze information.
  • It helps simplify the shipping processes because TMS provides trade and tariffs information, enables you to choose the suitable carrier for shipping the goods, and permits an individual to create a profile for shipment planning.
  • It provides a central location that will allow an individual to control the inventory, accounting, tracking the shipment, and freight management.
  • Since TMS cannot function without sufficient administrative features like WMS and ERP, the documentation and financial report will be accurate. Accurate documentation is significant when it comes to auditing, eliminating discrepancies, and also minimizes the cost of handling invoices.
  • It helps to minimize the import and export compliances shipment penalties because TMS provides custom trade and tariffs.
  • It eliminates time wasted on the booking process because it provides a central location for quoting, thereby eliminating traffic and saves on time, thereby minimizing delays that can attract penalties.
  • It eliminates human error because TMS will provide an updated status of the shipment route. Shipment status will help the carrier and freight management team decide what alternative to take if any problem arises to ensure the products are delivered without delay.
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Conclusion

Employing TMS in your business would be the milestone for managing the shipment of products.

Since it is hard to eliminate human errors, TMS will help improve the relationship between your organization and clients and minimize losses, penalties, and complaints.

Therefore, you should be to maximally use it for real-time delivery and significantly help you meet the clients’ demand.

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