8 Important Reasons Why You Need A Transportation Management System

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8 Important Reasons Why You Need A Transportation Management System

As part of digitizing their services, many logistics companies are now incorporating transportation management system (TMS) solutions in their operations, with great returns. Maersk and DHL are some of the biggest logistics companies that can attest to the accuracy, efficiency, and customer satisfaction that comes with a TMS. It is not easy for a logistics manager to build supplier relationships or put out fires when he has a thousand other tasks like meeting customer needs, analyzing routes to see what adjustments to make, fixing freight costs, and tracking shipments. Yet, all these are his responsibilities as per the job description. Thankfully, he can save himself all these hassles if his company implements a TMS. What is a TMS? What are the reasons and benefits behind its implementation? This article answers all these questions.

What is a TMS?

What is a transportation management system (TMS)’ This is a question many people would like to know how to answer and for every good reason. The hype around TMS is great, thanks to the many advantages and competitive points it offers companies that have embraced it. Simply put, a TMS defines a virtual platform logistics companies use to control most, if not all, of the activities involved in and surrounding the movement of goods. As stated previously, a logistics manager has so much to handle, and meeting all these demands without an efficient system like what TMS offers leads to errors, evitable mistakes, resource and financial losses, and burnout. As such, every logistics company should implement a TMS. Although the initial process is often challenging and calls for financial and time investments, the results are worth the commitment.

Eight reasons that make a TMS important

There are thousands of reasons why a transportation company needs some form of a TMS in place, and below are the first eight that top our list;

  1. A smart TMS ensures efficiency in transportation operations

The primary driver for having a TMS in place is to ensure efficiency. With so much at hand to do, a logistics manager is likely to focus on one area and lag on others. However, a TMS digitizes almost every operation with the company, improving seamlessness. For instance, instead of studying trends manually to understand how certain actions would impact the overall activities in the company. However, with a TMS in place, the company can simulate various situations and see their overall bearing. Besides, a TMS allows the use of models, further boosting demand and supply forecasting, which ultimately boosts efficiency.

  1. Mistakes and errors are reduced with an efficient TMS

You might also like to put up a TMS in your transportation company to reduce errors and mistakes, increasing accuracy within the company’s premises. When people have to use paperwork and entire data into the company database manually, chances are high that many errors and mistakes would occur. However, with a TMS, most of the processes are automated, eliminating the need to manually key in data. As such, the accuracy of data and operations improve, preventing losses that would result from evitable mistakes.

  1. A TMS ensures customer satisfaction

In this technological advent, the customer is always right and is right at the center of any business. This is because, without him, there would be no need to start the business since the chain would not be complete. One thing that helps a brand win customer trust is by meeting his needs, and that’s when a TMS comes in handy. It allows accuracy and efficiency, something your clients undoubtedly appreciate. Besides, when you can deliver their orders in time and undamaged, courtesy of TMS, they appreciate you even more. Last but not least, with TMS, you enable your customers to track their goods and know their live locations, further building on the company-customer relationship.

  1. An efficient TMS allows a company to assess risks better and be proactive

A proactive approach is preferred to a reactive one since the former sees way ahead into time and creates effective action plans to mitigate risks before they turn into a hazard. This is especially in the transportation and logistics industry, where anything and everything can become a risk and a hazard. Thankfully, a TMS allows a company to analyze routes, their risks, and appropriate mitigative actions.

  1. With a TMS, you can negotiate terms better and control freight cost

Business in the transportation world is always smooth until a need arises to adjust freight costs, particularly to increase them. Money is a sensitive topic, and even the smallest increment in costs can make you lose your loyal customers. Thankfully, a TMS allows you to visualize and illustrate how various parameters affect freight costs, and explaining this to clients should be satisfactory.

  1. A TMS helps you save time

Imagine how cumbersome it is to make calls or send emails to departments to notify people of an emergency. Now think about sending emails and people taking time to read them and respond- it wastes time. However, with a TMS in place, you key in information into the system, and the rest of the departments access it in real-time. Isn’t this time-saving?

  1. With an ideal TMS, you can save costs

A business, including logistics and transportation services, can only be sustainable if you can save costs. Thankfully, that’s exactly what implementing a TMS will help your brand realize. You will not need many employees since many processes are automated. Besides, with the visibility that a TMS enhances and tracking shipments, you can intervene in times of crisis, preventing losses that would occur should perishable goods overstay on transit.

  1. You can enjoy seamless operations and widened profit margins with a TMS

Since a TMS ensures efficiency, accuracy, and visibility, you can rest assured of enjoying seamless operations by implementing it. All departments can visualize any data simultaneously, hence no disruptions via calls or emails. Besides, the manager is left with only what he can comfortably handle. All these activities contribute to widening profit margins, and the company can realize more returns.

Conclusion

A transportation management system (TMS) is a way of digitally transforming logistics operations by implementing a virtual platform that the employees use to control all activities related to and surrounding transportation of goods. While it’s true that a TMS calls for huge financial investments, it’s worth the penny. If you want efficiency, accuracy, cost reduction, seamless operations, customer satisfaction, etc., you will definitely go for it.