Learn what a TMS is and it's benefits

A TMS is a software platform designed to streamline the planning, execution, and optimization of the physical movement of goods, both incoming and outgoing, and ensure the shipment is compliant and proper documentation is available.

It falls within the larger category of supply chain management systems. A TMS primarily helps businesses move freight from origin to destination efficiently, reliably, and cost-effectively.

What is a TMS?

Basically, a TMS is an acronym for Transportation Management System. It's a software that collects, stores, processes and distributes information related to the transportation of goods in a company.

A TMS helps a company select the optimal mode of shipment and the best carrier, based on cost, efficiency and distance, including optimization of multi-leg transportation routes.

A robust TMS can provide visibility at every stage of the supply chain and, along with global trade management functionality, can also provide information on trade and rates, and whether there are potential delays that may occur.

The execution functions of transportation management systems vary widely, but can include freight matching and communication with carriers, documentation, and tracking of shipments, as well as assistance with freight billing and settlement.

Some TMS provide track and trace services, enabling real-time information exchange between carriers, distributors, warehouses, and customers. They may also have functionalities that handle complex international logistics, including the delivery of appropriate import and export documentation to ensure that shipments comply with trade regulations.

TMS optimization capabilities typically include the ability to measure and track performance with reports, dashboards, analytics, and transportation intelligence.

A TMS encompasses a range of functions, including:

• Finding and comparing carrier rates to select the most cost-effective option for shipping goods.
• Booking and dispatching shipments, including the generation of necessary shipping documentation.
• Tracking shipments in real-time to monitor their progress and address any delays immediately.
• Freight audit and payment processing to ensure accuracy in billing and payment to carriers.
• Analytics and reporting tools to provide insights into shipping operations, helping to identify trends, optimize routes, and reduce costs over time.

What are the benefits of using a TMS?

The benefits of using a Transportation Management System (TMS) are extensive and can significantly impact the efficiency, cost-effectiveness, and reliability of a company's supply chain operations. Here are some of the key benefits:

Reduced transportation costs

A TMS helps identify the most cost-effective shipping options by comparing rates and services among various carriers. It can also optimize routes and consolidate shipments to ensure more efficient use of transportation resources, leading to significant savings.

With a TMS, companies can plan all the routes for the delivery or collection of goods, this planning allows them to know the resources they require, such as: 

• Type of vehicles,
• Total kilometers and driving hours that the drivers will travel,
• Number of orders for each route
• The most optimal route for each driver.

Better efficiency and automation

Automating routine tasks, such as carrier selection, shipment routing, and documentation, reduces the likelihood of human error and frees up staff to focus on more strategic tasks. This leads to overall efficiency improvements in the logistics process.

With a TMS, better results can be achieved in less time through a platform for executing, managing and analyzing the company's logistics processes. By eliminating manual work, the time spent organizing the supply chain can be significantly reduced, and many errors can be eliminated. 

Data analytics and reporting

TMS solutions offer robust reporting and analytics tools that help businesses analyze their shipping history, performance metrics, and transportation costs. This data can be used to make informed decisions, negotiate better carrier rates, and identify areas for operational improvement.

Scalability

As businesses grow, their logistics needs become more complex. A TMS can scale to accommodate increased volume and complexity, supporting expansion into new markets or regions without a corresponding increase in logistics challenges.

Increased supply chain visibility

A TMS solution provides the data needed to control and improve transportation processes, especially when cargo is in transit, which provides greater transparency.

Thanks to the visibility provided by a TMS, information flows through the supply chain, enabling analysis of data such as pick-up and delivery times, costs, time in transit, fuel efficiency, transport capacity, loading time, and more.

Better customer service

With enhanced tracking capabilities and more reliable delivery estimations, companies can provide better service to their customers. Real-time updates and proactive management of shipping exceptions help in keeping customers informed and satisfied.

In the long term, this can indirectly lead to an improvement in the Net Promoter Score (i.e., the measurement of customer loyalty based on the recommendations they make), which can generate new business opportunities and partnerships.

Improved warehouse efficiency and inventory management

By providing accurate delivery estimates and enhancing the flow of goods, a TMS can reduce inventory levels and associated costs. Better synchronization between transportation and warehouse operations leads to more effective inventory management.

Improved transportation execution and on-time deliveries are two benefits offered by TMS, which impact inventory flows and replenishment strategy. Complete visibility over the delivery of goods enables forecasting and planning, which reduces stock levels and avoids delays, thus saving costs.

Enhanced compliance

A TMS helps ensure compliance with shipping and freight regulations, reducing the risk of fines and penalties. It can also manage documentation and audit trails, making it easier to adhere to industry standards and practices.

Sustainability

By optimizing routes and consolidating shipments, a TMS can reduce the number of trips needed and the overall carbon footprint of transportation activities, supporting sustainability goals.

Companies like Drivin offer a Rewards Program for their clients looking at improving their carbon footprint. As part of their commitment to reducing the carbon footprint, through their reforestation program, Drivin will donate trees on behalf of organizations, making their clients greener and more socially responsible companies towards the environment.

About Drivin

Drivin stands out as a leading TMS (Transportation Management System) SaaS, offering one of the most comprehensive solutions available in today's market. It caters to the diverse logistics needs of companies through a highly modular platform, renowned for its ease of implementation and user-friendliness.

Our commitment to excellence is evident through our robust consulting, support, and development teams. These teams work closely with our clients, guiding them through their journeys to launch new ventures or enhance existing operations. This collaborative approach ensures the creation of a truly enriching experience that significantly enhances their supply chains' value.

Opting for Drivin not only elevates a company's logistics operations to new heights but also ensures tangible efficiencies and a superior value proposition to their customers. We empower businesses to not just meet, but exceed their logistics objectives, setting a new standard in customer satisfaction and operational excellence.

If you'd like to know more about how we can help your business strive in this ever evolving logistics landscape, feel free to leave your information in the form below, and we'll be in touch!