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Transportation Management

Transport Management

A transportation management system (TMS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system.

A TMS usually “sits” between an ERP or legacy order processing and warehouse/distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions. These solutions are evaluated by the user for reasonableness and are passed along to the transportation management provider analysis module to select the best mode and least cost provider. Once the best provider is selected, the solution typically generates electronic load tendering and track/trace to execute the optimized shipment with the selected carrier, and later to support freight audit and payment (settlement process). Links back to ERP systems (after orders turned into optimal shipments), and sometimes secondarily to WMS programs also linked to ERP are also common.

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A transportation management system (TMS) helps companies move freight from origin to destination efficiently, reliably, and cost effectively. TMS encompasses solutions for moving freight in all modes and also includes intermodal movements. The TMS processes include freight transported inbound or outbound, domestically or internationally; using transportation assets owned either by the company or an outside service provider. The freight managed by a TMS ranges in size from parcels to bulk commodities.

Perhaps no other supply chain application offers so many ways to save money or drive value. But the main reason companies implement a TMS is to reduce freight spend. A TMS achieves these savings based on process enforcement, analytics, and optimization; with virtually no other supply chain application offering so many different forms of optimization.

There is a particular focus on the degree to which a TMS can reduce freight spend. Several methods can be used to reduce freight spend, with the different “savings buckets” having different levels of savings.

Shippers that implement TMS solution compared to traditional methods of transportation management perform better in terms of service levels and freight savings.  So let’s explore a few areas where there are further benefits of a TMS.

  • Visibility across the entire transportation network
  • Real-time data through one single SaaS solution
  • Continuous improvements and cost savings
  • Manage all aspects for the transportation process
  • Centralize control to manage transportation
  • Scale infrastructure and quickly adapt technology to changing business needs
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