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7 reasons why you need a TMS

18 May 2018
Control Tower

A Transportation Management System is the key to tackling your logistic issues the efficient way. Why? Here are seven reasons a TMS makes all the difference for your company.

Transportation management systems are no novelty, but chances are you haven’t considered acquiring one for fear it would not suit your company. Too expensive, too complex, built to service only the large corporations… These are but a few of the oft-cited reasons not to consider a TMS, let alone implementing it. A few of them may sound familiar to you. Lately, though, things have been changing fast in the world of logistics, making a TMS a better idea than it ever was before. The advantages are so big and the disadvantages so small that it’s sheer unthinkable to simply brush TMS usage aside.

 

1. Yes, TMSes are affordable

As with all technology, a TMS at first was merely a tool for the big boys. If your company was spending less than 100 million euro on transportation, you could not justify the costs of implementing such a system. That was a bit of a disappointment, for all those who lacked such size were suddenly burdened with yet another competitive disadvantage. Sure, the big boys had to dig deep into their pockets for a TMS, but they did enjoy all the fruits these systems bore. The so-called Tier-1 shippers who worked with a TMS were able to plan much more quickly and efficiently, while smaller companies were stuck with their time-consuming ways of old. Excel sheets, anyone?

Just like with other technologies, though, TMSes have become much more affordable, mostly thanks to cloud solutions and young IT companies being more innovative and competitive every day. The big boys paid big money as they were the first to implement TMSes. This was because these sizeable concerns were dependent on parties like Oracle and SAP, who could only produce large-scale solutions at the time. These possibly entailed expensive hardware and pricey in-house development of and integration with other IT systems. Moreover, these integrations were not a one-off cost: every change in any other system held the possibility of having to adapt all the others.

For smaller players in the logistics branch, opportunity now comes a-knocking, as the newest transportation management systems have become a whole lot more accessible. The reasons are manifold. For example, a cloud-based TMS does not require expensive hardware and integration has become much more easy thanks to the use of API’s.

2. Implementation is fast

Many interested parties shy away at the thought of a lengthy implementation process. An IT project that takes a year to implement can badly weaken a company’s focus, as myriad examples have already shown. For smaller companies, this often counts as a reason to stay away from TMSes, as IT is not their core business. A lot has changed, though. Getting a TMS up and running is now much faster and does not require any important interventions, for all the reasons mentioned earlier. Modern cloud-based TMSes come fully equipped now and need only be fine-tuned to suit your company’s needs. Thanks to API’s, among other innovations, this adaptation is now relatively simple. The implementation time for a TMS has thus been drastically cut short, from several months before to a few weeks or even days today.

3. At last, an overview of all your data

A TMS is not merely a tool to better organise shipments, it also allows for cargo to be more efficiently transported from A to B. Yes, that too. But there’s more. A transportation management system acts as a sort of refinery for logistic data, a place where everything is concentrated and made visible. How many shippers actually have an eye on things like milestones, detailed costs, transportation times and other crucial logistic information? That’s what a missed opportunity looks like, because without insight, it is impossible to optimise. An overview of all available data is the key to more efficient planning as well as problem detection.

A good TMS does just that: it brings all the data together, including intel from logistic partners, and formats all of it in the same way, giving you more possibilities to analytically assess time and cost.

4. A TMS gives you more control

Your client is waiting for a shipment, the location of a truck is unclear or you are waiting for a supplier yourself. Everyone is impatient and demands immediate answers. The phone is ringing off the hook and you have scarcely any time to get hands-on with the actual problem. Sounds familiar? The good thing about a TMS is you will have a lot less of these kinds of crises as your transport will be much more efficiently organised. Of course, banning all trouble once and for all is utopian — something can always go amiss. But when you’re in a pickle, a recent generation TMS will get you there faster. What is more: you will be informed about anything going awry in a timely manner, allowing you to intervene before the situation escalates. The newest TMS solutions have built-in chat functions, allowing you to talk instantaneously with all concerned parties.

5. Lower costs

A TMS wins you time on several accounts, which in turn reduces your costs. By having more control over your choice of the right shipper, you can plan much more efficiently. Your resources are better managed and thus costs are going down. Thanks to a better insight in all your data, you are looking at a bigger picture which tells you where the bottlenecks are and how you can avoid them. You will have a much better understanding of the nature of your transportation costs. Many time-consuming manual tasks, like phone calls, emails and spreadsheets will be dwindling or will vanish altogether. In short: your employees waste less working hours on menial tasks and have more time on their hands to be really productive.

6. Digitalising is future-proof

When all your logistics data are spread out over several Excel sheets, a bunch of emails and maybe a few paper files, you have little control over them and few possibilities to look back and examine your intel to better predict the future. An old school TMS would show some improvements on this front, but not many: your data used to be locked in an enormous silo and could not be easily transferred to another system. That is not the case anymore. Newer TMSes have API’s which easily let you share information with other systems. You free up your data and thus create room for you to manoeuvre as well. Keep in mind that the possibility to disclose your data and integrate it with other systems is a nice-to-have trump card when dealing with other partners.

7. Keep your partners informed

Whether you are a shipper, 3PL or 4PL, you are always in touch with a lot of parties. The better they are informed, the least likely you are to encounter any issues. Clients these days expect regular status updates and want to be in the know. Nobody wants to just push a button anymore and then wait around for X time for the shipment to arrive at its destination. A TMS will meet those expectations and offer transparency on top. For instance, chauffeurs can use an app to communicate when they’ve made an attempt for delivery or if they’re stuck in traffic. That way, both you and your customers know what’s happening at all times.