Goods transportation logistics can be notoriously difficult, especially for large carrier organisations with diverse loads and increasingly complicated briefs from demanding customers. No matter what product you are trying to deliver, there are order-processing, cost-management and ever-changing driver communication implications to consider if you want to run a profitable business.
Any large transportation organisation will have to interact with multiple software packages, from CRM systems to document management; On-board computing to Enterprise Resource Planning (ERP). That is why a good transport management system (TMS) - which can integrate all of these diverse solutions into one easy-to-use platform - should be the engine of a company’s entire logistics process.
A TMS integrates all tasks
Without a TMS, you are always going to struggle to pull everything together effectively. A common consensus among carriers, freight forwarders and LSPs has identified dozens of individual tasks which, if all managed separately (and often manually), not only cause a considerable drain on resources, but leave them open to longer turnaround times and greatly-increased chances of errors.
Even the most basic of orders will require a carrier to:
- Create an order
- Quote the client accurately
- Store updated customer pricing and product data
- Create a CRM
- Communicate with the fleet
- Communicate with supply chain partners
- Log KPIs
- Invoice the client accurately
- Follow up with subcontractors
- Register empty goods
- Update vehicle management records
For years, carrier organisations have known they have to stay at the cutting edge to survive. A company that could effectively digitize their order process, inventories and invoicing would always have an advantage over competitors that were still stuffing all their documents into filing cabinets and cardboard boxes.
A TMS reduces risks
One recurring goal for carriers and LSPs is trying to minimize risk by creating a process that is complex, yet streamlined. One that covers every eventuality but is not encumbered by workarounds or corporate red tape. A TMS is the perfect tool to achieve this, because it can be programmed to handle last-minute changes or glitches without a planner having to tear everything up and start again.
The most important thing is always customer satisfaction, and carriers know that, as customers become more demanding, they too have to adapt and show their versatility. Where once they would have had to turn down a client’s last-minute change of plan, with a TMS they can usually turn that “No” into a “No problem!”
In order to optimize performance, data is becoming an invaluable commodity. Most LSPs and freight-forwarders are tough on driver or vehicle performance, and use strict KPIs to keep track. Without a TMS, a lot of data can fall through the cracks. There is a tendency to get the job done by hook or crook without being overly analytical or learning from past mistakes. The result? Poor performers are able to continue unchecked and under-achieving partners in the supply chain will end up reflecting badly on the entire operation.
A TMS is affordable for companies of any size
So moving to a quality TMS has long been the goal of all carriers, freight-forwarders and LSPs, but in the past it has only really been viable for the rich multinationals with their vast fleets and complex requirements, while smaller organisations have found them to be prohibitively expensive.
But, as is often the case with technology, TMS solutions are no longer out-of-reach for independent carriers regardless of their size or turnover. Because they are modular, they can be adapted to fit any brief, and can therefore be a valuable asset for companies only requiring a small selection of the features on offer. This means companies are only getting the modules they need, and don’t end up paying a fortune for services they never use.
A TMS pays itself back
Equally, as businesses struggle to balance the books, the cost of modular TMS can typically be recouped elsewhere - most notably by removing the need to hire dedicated planning staff. In many cases, the TMS itself can compensate for one or even multiple administrative FTEs, and ends up as a cost-saving tool, rather than an expensive overhead.
