.A transportation management system (TMS) is a subset of supply chain management concerning transportation operations. And may be part of an enterprise resource planning system
Top 5 Areas of Focus on a Long Term Logistics Strategy
The top five areas that are important when focusing on a long term logistics strategy are:
- Maintaining high levels of customer service (96%)
- Lowering costs (94%)
- Improving efficiencies and productivity in logistics operations (93%)
- Attaining the ability to target logistics initiatives that drive business growth (79%)
- Improving Asset Utilization (74%)
Maintaining high levels of customer service In Using Transportation Management Systems
With a TMS you can have tools and features that notify customers of when their shipment is coming. Or you yourself can login and see where the shipment is at any time. Furthermore, when you have a TMS that allows you to run various metrics and reports to analyze. You can see which carriers are getting your shipments in on time to your customer. And which ones are not causing high levels of claims. When you weed out the bad, based on data, and focus on the good. You can then ensure with greater predictability that you will have a hassle free experience and confidence in getting your freight to your customer. You may also use that same data to better collaborate with carriers. And those in the supply chain to sit down and address these facts and proactively improve. So you continue to increase the customer service metrics.
Lowering Costs with A TMS and Managed Transportation Services
Remember, lowering costs isn’t simply about the freight rate. It’s about total costs. As more and more manufacturers look at the total costs of business decisions and the total costs of their operations long term. The hard costs you see that are invoiced are not the only costs considered. In logistics and transportation management, when it comes to costs, you must also include the “soft” costs.
These are things like the time it takes to process a freight shipment. The errors that come up due to not using automation features that are available in a TMS, or even the time dealing with such things like freight and transportation accounting or freight claims that a logistics service provider could handle as a value-add , such as managed transportation services to the TMS software offering, really do add up over time. If you aim to grow your business, which I am sure you do, the added costs of more resources and time to process more and more freight. A good TMS reduces time and allows you to scale cutting out many other unforeseen soft costs.
Improving Efficiencies and Productivity in Logistics Operations with a TMS
This improvement area in a long term logistics strategy by implementing a TMS is highly related to the second point of lowering costs, but let’s go with another angle. Have you ever noticed that when you have a very good process or system for doing something in your job, you have to think less about how you are going to get the job done effectively? The system is sound and allows you to rinse, repeat, and scale by not only following a sound process, but getting muscle/mental memory to get better and better as you use the system.
Attaining the Ability to Target Logistics initiatives that Drive Business Growth
Again, as with logistics costs dovetailing into improved efficiencies. This area of long term strategy focus is really only possible if you are efficient in process and are cost effective. When you are confident in a repeatable and scalable system that scales and is cost effective to deploy and maintain,you then have the think and brain power to strategically identify other issues in the organization and apply either more tools, technology, or systems to continue to drive the business forward. As a manufacturer, using a TMS can free you up greatly to focus on the marketplace and new products to open up new markets.
Improving Asset Utilization with a TMS
This idea also plays into operational improvements that allow your business to grow. With a transportation management system and especially one integrated to your ERP or Warehouse Management System, you can start connecting the dots to what inventory you have on hand, which ones are in transit and more. When you have integrated systems that easily allow you to calculate asset utilization. It allows you to continue to have a strategic mindset and quickly make decisions. what products or assets you should have on hand or order more of to ship inbound to your warehouse from a vendor.
The key to all five of these points is truly that a transportation management system frees up any shipper who utilizes one to get out of the weeds of process. And put the focus back on their business and not the worry of how are you going to stay effective in transportation management. It’s tool that empowers you, but make sure it’s a tool that has the capability to meet your unique needs. If you are unsure of your needs, make sure you schedule a consultation with one of our logistics experts. And talk about how you could use a transportation management system to make your life better.