Choosing a Transport Management System (TMS)
How to pick the right service for your business
There is a lot of conversation around the benefits of technology in the supply chain, however, one incredibly important technology that is often overlooked is the transport management system (TMS). Mark Solomon (Senior Editor at DC Velocity) said: ‘There has been little in the way of advancements, over the past 20 years, as beneficial to the supply chain as Transportation Management Systems’.
TMS automates vital functions in the supply chain such as routing, job booking and assigning appropriate resources. Clever software should also be able to help its users reduce their transport and labour costs whilst simultaneously improving their SLA compliance. TMS often provides the technological groundwork for a supply chain to operate and it is important for businesses to choose a system that can offer all the features they need to continue to grow. This can be quite a difficult task with the numerous options available, so here are few features you should be looking for:
At its most basic, TMS pools all your data together and lets you raise transport jobs. The simple versions of this software can involve a lot of manual intervention. Imagine you need to get a part from a holding in Coventry to an engineer in Milton Keynes. A simple TMS will show you all the parts available, all the delivery options and all the delivery locations. An administrator is then required to choose all the right options in the right order.
Not only is this process laborious, it is also prone to error. If this delivery is one of 100 that an administrator needs to process that day, it is very easy for them to simply miss click and send a part in the wrong direction.
A good TMS can automate a lot of this background process. An administrator just inputs the engineer and the part SKU, and the TMS finds the viable options. It will also provide you with better information like estimated arrival time and transit costs.
As technology has advanced, it has become a critical feature of TMS to be able to automate some of the manual processes and, as seen above, this can be a huge help. However, a TMS’ purpose is to empower its user to make the right decisions about transport, and in this goal, it is important to select the right amount of automation for your business.
Computer programs are not infallible and are prone to make mistakes that people would normally recognise. Take again the example of needing to get a part to an engineer in Milton Keynes, however, this time imagine that the only available stock of that part was located in Glasgow. An automated programme would see this as the nearest available stock and start the shipping process, whereas a person might be able to find another option. Perhaps there is return stock of that part on its way back to a Coventry depot and the transport job just needs to be delayed until that part arrives.
It is easy to see from this example how quickly things can go wrong when processes are left completely up to computers. Automation is certainly important, but when choosing a TMS it is worth considering how much human involvement you still want.
Total transparency over cost
With the number of transport SLAs available to modern supply chains, it has never been more important for a TMS to give you full visibility over cost. Sometimes it is vital that a part is delivered before 9am, whereas other times it is more cost effective to wait. There may even be incidences where the cost of transport outweighs the value of the part itself. Without visibility over cost, far from saving you money a TMS can actually increase your supply chain spend.
As with selecting any technology, your business’ individual requirements will be different from others. You may decide for example, that full automation is worth potential mistakes because of the administration saving. However, these guidelines should help you select a more appropriate service.
A TMS is a vital component in any supply chain and in a 2017 survey of supply chain trends 55% of respondents stated they were looking to invest in TMS technology to stay ahead of their competition. If you are looking for new ways to continue growing your business, a TMS is a good place to start.
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