TMS or Transportation Management System is best defined as “software solutions that facilitate the procurement of transportation services; the short-term planning and optimization of transportation activities, assets, and resources; and the execution of transportation plans” (Ross 316). TMS is a subset of Supply Chain Management (SCM) software, primarily focused on transport logistics. The scope of TMS applications has changed since their beginnings. While the transportation automation processes are the centerpiece of the software, the flashpoint of Web-enabled TMS is its ability to serve as the foundation for the networking of information between many external parties, including carriers, suppliers, customers, and LSP across a logistics e-marketplace (Ross 316). The TMS product can then be used as a central dashboard that enables a collaborative network of customers and carriers. TMS is also closely aligned with Warehouse Management System (WMS). No other supply chain application offers so many ways to save money and increase value.
Companies are then able to utilize their TMS to achieve several goals, such as reducing costs through better route planning, improved accountability with visibility into the transportation chain, greater flexibility to make changes in delivery plans, and completion of key supply chain execution requirements (Rouse). Companies that are able to successfully implement their TMS will see increased customer service, warehouse efficiency, inventory reductions, and cash flow improvements (Robinson). Using the TMS, companies will be able to see carriers that they have previously worked with and the percentage of time loads were delivered on time to the customer. They can then use this valuable information to increase customer happiness and make sure they do not have an issue with delivering to the customer. The more a company uses their TMS, the more they will decrease time on freight management and more time working on other projects such as warehouse duties (Robinson). Companies will then be able to integrate TMS into their ERP systems, thus decreasing possible errors and spending less time on data entry or correcting previous mistakes. A successful TMS gives companies the confidence that their customers are receiving their shipments on time. This will allow for them to better plan for inventory that is already on hand. Having an accurate forecast of the inventory is important, as e-commerce freight shipping continues to increase for the foreseeable future (Robinson). One final improvement that comes from using TMS is a company may be able to reduce how much they pay per freight invoice, all the way down to only 5 to 10% of the original cost (Robinson). Overtime, this all adds extra value to the company and the services they provide. They will then be able to transfer the value to the customer by offering the lowest cost for their services. For example, they may be able to offer the lowest cost for freight transportation in a competitive bidding event. This will lead to a strong relationship between the freight company and those that they are providing services for.
An example of TMS is Freightview, a standalone TMS designed for small to medium-sized businesses that ship less-than truckload (LTL) freight and work with multiple carriers or brokers (Burnson). It is web-based and offered as a SaaS. Freightview gathers all of its user’s negotiated LTL rates into one place, allowing them to compare options quickly and conveniently. The TMS simply makes the company more effective, as it keeps track of all their data and converts it into charts, graphs, reports and spreadsheet downloads (Burnson). Users can then view this data and make critical decisions when it comes to further transportation needs. A company can then schedule pickups, prepare bills of landing, print shipping labels and track shipments. It also features a unified address book, which prevents the user from ever adding