A Transportation Management System (TMS) is a powerful tool that enables businesses to gain control over transport costs and create better visibility of internal logistics processes, resulting in higher customer satisfaction. This will make a company more competitive, and boost sales thus helping businesses grow. Considering the ever-evolving global trade environment, it is important for businesses to have a system that will allow them to successfully navigate complex transportation processes, collect available data and analyze them accordingly.
The 8 key benefits of using a TMS are:
1. Freight cost savings
A TMS helps to reduce costs through optimized multimodal transport selections, consolidated shipments, freight audits, and pre-billing functionalities. The freight audit feature verifies carrier invoices against rates and contracts, thus identifying overcharges and discrepancies. Pre-billing validates transportation charges before carriers send their invoices, reducing billing inaccuracies and disputes. By catching errors upfront, the TMS minimizes manual corrections, carrier disputes, and delayed payments. Automatically selecting the most cost-effective carrier is also a significant cost-saving for many companies who start using a TMS.
2. Improved visibility and control
With a TMS, businesses can track their shipments in real time, receive alerts on any issues, and gain better visibility into the entire transportation process. This helps companies identify potential problems before they occur, which can prevent delays, improve customer satisfaction, and enhance overall supply chain performance.
3. Increased efficiency and reduced operational costs
By automating transportation-related processes like; automated carrier selection, automated communication with carriers/forwarders, automatic document creation, etc. a TMS can help companies reduce the amount of time and resources required to manage their transportation operations. This allows companies to focus on other important aspects of their business and improve overall efficiency. The ability to automatically communicate with your carriers/forwarders is very important to realize these savings and is not something all TMS vendors offer in an effective way.
4. Enhanced customer service
With a TMS, companies can improve their delivery times, reduce errors, and provide better communication with their customers. This can help improve customer satisfaction, loyalty and becoming the supplier of choice, which can lead to increased revenue and growth.
5. Data analysis and insights
A TMS can provide companies with valuable data and insights into their transportation operations, such as carrier performance, shipping costs, delivery times, and compliance insights. This information can be used to make data-driven decisions that improve supply chain performance and optimize transportation operations.
6. Increased collaboration
A TMS can help improve collaboration between different departments within a company and with external partners such as carriers, brokers and suppliers. This can lead to better coordination and more efficient supply chain operations.
7. Better inventory management
A TMS can help companies manage their inventory levels more effectively, by providing real-time visibility into inventory levels and shipment statuses. This can help prevent stockouts, reduce inventory costs, and improve overall supply chain efficiency.
8. Environmental impact
(TMS) plays a vital role in supporting environmental goals and meeting Scope 3 requirements for businesses. By optimizing transportation processes, a TMS helps reduce carbon emissions and minimize the environmental impact of logistics operations. Through route optimization, load consolidation, and mode selection, TMS enables businesses to operate more efficiently, leading to reduced fuel consumption and greenhouse gas emissions. Moreover, the data and insights provided by a TMS allow companies to measure and report on their transportation-related emissions, addressing Scope 3 requirements for corporate sustainability reporting. By adopting a TMS, companies can proactively contribute to their environmental commitments, promote sustainability, and align with global efforts to combat climate change
The impact of investing in a Transport Management System goes further than the immediate benefits such as cost savings, improved efficiency, and enhanced visibility. A TMS's power also lies in its intangible benefits to organizations. Strengthened customer service and brand reputation are also part of the recipe for success in an ever-changing logistics landscape.
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The 4 key points to take full advantage of a TMS
Anyone considering investing in a TMS or replacing an existing package as a company should focus on 4 aspects. This makes it possible to tackle the most important challenges of today and the near future.
