A TMS is a system that may enhance operations, boost sales, and deliver better customer service for any logistics firm. There are several advantages to using a TMS to help businesses transport freight from origin to destination accurately and cost-effectively. Before deciding on a transportation management software, consider the system’s worth and how it may benefit your business. The following are some of the advantages of a TMS.
Reduce Freight Costs
One of the most significant advantages of a Transportation Management System is the reduction of freight costs. As a supply chain visibility tool, it assists shippers in identifying problems as they occur. Another significant advantage is its potential to reduce resource costs. Tasks that are normally handled by accounting or shipping staff, such as verifying charges, can be automated using the Transportation Management System.
Enhanced Customer Service
A Transportation Management System can help you better serve your clients by tracking essential performance metrics like on-time delivery and damage rates utilizing data. This data may then be utilized to replace low-performing transportation partners or in-house drivers with high-performing alternatives.
Enhancing Communication
In any hectic maritime environment, communication is essential. Shipping and warehouse managers must maintain open lines of communication with drivers, loading teams, partners, and customers to offer updates and obtain information. Another critical aspect to note is that transportation management systems centralize communication by allowing SMS and email messaging and alerts, order changes, and shipment notifications.
Warehouse Productivity
So, how can a TMS contribute to warehouse efficiency? The more you utilize your transportation management system, the less time you spend on freight management and the more time you have to concentrate on other tasks, such as warehouse responsibilities. Furthermore, by integrating your TMS with other systems, such as your ERP, you reduce the number of days spent on data input and rectifying errors caused by entry errors. When coupled with a Warehouse Management System, you have the entire Supply Chain insight you need to make business choices that create additional cost savings and minimize inefficiencies.
Real-Time Tracking of Deliveries
A TMS allows you to see where your shipments are in real-time. Alerts for cargo arrivals or delays can be sent to organizations. Having the capacity to detect service disruptions provides organizations the advantage of knowing about them as soon as they occur, allowing them to make necessary modifications. Tracking data may also be used to calculate the time it takes to complete a route in order to create effective route schedules.
New Capabilities for Delivery
A robust TMS allows you to improve your shipping process. For example, you could wish to build up pool point distribution programs or inbound programs between different sites within your business to increase overall efficiency and cost savings. A Transportation Management System may let you simply generate a master bill of lading and have unique logins for each of your locations, which a single person can then handle.
Inventory Reductions
When you have trust that your customers will get their shipments on schedule, you can better prepare for the inventory you have on hand. Having an accurate inventory estimate is becoming increasingly crucial as eCommerce freight transportation continues to rise in the foreseeable future.
Improved Billing Procedures
Electronic billing, auditing, and processing are all possible with a Transportation Management System. The TMS should be able to compare an invoice to the actual shipping rate when one is received. If they are equal, the system can approve payment and generate a customer bill. This streamlines accounting operations and frees up accounting personnel to concentrate exclusively on exceptions.
Cash Flow Enhancements
According to Inbound Logistics magazine, by utilizing efficient transportation accounting, such as freight payment, auditing, and consolidation services inside a TMS system, a shipper may move from paying $11 per freight invoice to only 5 to 10% of the amount. Furthermore, by using an outsourced supplier of freight accounting services, a firm may save 2% to 5% of its overall freight expense by identifying erroneous charges or repeated payments.
Insights into Business
A TMS can offer a wide range of data and convert it into usable knowledge that can be used throughout the company. KPIs may be tracked using standard reports, and bespoke reports can be generated to examine things like rate disparities or on-time service performance. Data can reveal why trends deviate from expected outcomes or how to build on favorable ones.
Parting Shot
Every organization would find the benefits stated above very beneficial with an effective Transport Management System in place, as the objective of every business is to offer quality products and services to please consumers. A TMS system may be tailored to your company’s specific requirements. This adaptability is provided to enable optimum gain and efficacy. So, if you don’t already have a TMS, now is the time to obtain one!