Transportation Management System

How easy is it to pick up a product well packed in plastic, paper or tin and walk to the counter to pay money for goods to buy? We hardly imagine how it reached to us. Anyway it’s our right as a consumer.

For any production or service sector – transportation plays very important role. It could be either of transporting raw materials, work in process, finished goods, returned goods, machineries or people.

Check out some key activities played in business model. A manufacturer buys raw materials that are transported to warehouse. Finished goods are transported to primary warehouse or facilities or exported to other countries. From warehouses goods are transported to distribution centers to B2B or B2C distributor’s warehouses. Retailers demand goods from distributors and transferred to shops. For any returns or sales after services business model uses transportation. We can easily find chain in whole business model. That is transportation!!

Information technology has totally changed how business works. Especially in manufacturing from material requirement planning packages to ERP & E-commerce, IT has introduced so many players and solutions. SCM is again new buzzword integrating supply chain. Integration of information and continuous flow of data are objectives after any atomization. While most organizations have focused on warehousing/distribution and store operations as primary areas for cost control and improved efficiencies, the transportation operation of the business is a cost frontier where new systems are providing tremendous savings while greatly improving operational control.

Managing warehouses, stocks and supply it is necessary to control transportation part. However transportation management is effective fundamental theory to maintain but how is it everything is integrated in your firm? Transportation Management System is an innovative architecture integrating a set up supply chain.

TMS

Transportation management systems were one of the earliest technology applications in logistics, but research indicates that TMS remains an under-used tool, even as the complexity of transportation networks increase and service demands become more precise. But with the economy driving a renewed emphasis on result-oriented solutions and cost containment, TMS is back in vogue. Best-practice implementations increasingly use the web to deliver a broader and more robust range of solutions than ever before.

How TMS will be admirable for firms?

TMS solution includes different modules controlling basically Procurement process, Parcel shipping process, Optimization, Execution, Global trade, Fleet management and Managed services. Technically TMS solution is web based, wireless, for an enterprise and deployable internationally. TMS is enabled through Space technologies, GPS, wireless network architecture, Internet, Mobile & PCS etc.

Transportation Management, one can integrate logistics functions for the visibility needed to cost-effectively plan, arrange, and track the distribution and delivery of products. One can manage all types of shipping from a single system, including truckload, less-than-truckload, multimode, private fleet, and public carrier. Here are plus sides of implementing TMS in your firm.

Cost
Transportation costs range between 3% and 7% of a company's total sales. Those numbers have gone up in recent years as companies have been forced to use more expensive modes of transportation. The typical TMS offers a payback of one year or less. It is not unusual to find businesses saving nearly 20% off their current transportation-related costs by automating carrier selection, load consolidation, and freight audits. Many companies address transportation management by using the shipping functionality within an ERP system or WMS.

Automated Bids
Best-practice applications in transportation procurement include an automated bidding process that allows conditional bids and collaboration, followed by automatic tendering that cascades from core carriers to a more open marketplace, and monitoring for contract compliance and carrier performance.

Fleet Visibility
Fleet Visibility - making the locations provides total fleet visibility and status of every trailer and tractor available to dispatchers, store managers, and management at all times regardless of location (i.e. in the yard, on the road, or at the store). With TMS one has capability to see orders as they are entered and as they flow through the warehouse.

Driver / Dispatcher Productivity - Driver and dispatcher productivity is promoted by streamlining and improving the existing work processes while substantially reducing the amount of paperwork and non-productive communications.

Store Communications - Providing store associates with real time data allows the store to be notified of deliveries automatically by utilizing global positioning (GPS). GPS is capable of providing estimated time of arrivals (ETA's) to the stores that are accurate within minutes. This helps plan personnel for unloading the trailers and reduces the waiting times for tractors, trailers, and drivers, thereby reducing the cost of delivery and improving timeliness of shelf replenishment.

Management Reporting - Providing transportation executives with real-time data enables greatly
Improved decision-making. Information such as tractor/trailer locations, individual store delivery time and cost, and driver productivity reports can be made available almost instantaneously in a format management can readily use.

Improved Customer Service
With Transportation Management, one can quote accurate shipment costs and make reliable delivery commitments to your customers at the time of sale. The delivery schedule is rule-driven and based on the promise date. And, costs within a shipment can be prorated based on item, cube, or weight. One can provide customer service personnel access to accurate, timely shipping information — right down to the detail of the bill of lading — with online tracing and tracking. EDI and internet carrier monitoring enable one to "follow " freight in transit.. And, by allowing customers the convenience of 24x7 access to shipment status via the web, one can significantly reduce the administrative costs associated with basic inquiries.

Real-Time Alerts and Workflow
The majority of transactions in a system can process without the need for intervention. But what about that small percentage of orders that fall outside the standard procedures? Workflow can alert your staff to the exceptions to the rule — those shipments that require attention. The ability to provide real-time alerts for those special circumstances increases employee productivity and drastically reduces errors.

TMS Solution Provider’s Market

According to ARC Advisory Group (Dedham, MA), companies spent $804 million on TMSs in 2001. ARC forecasts the market to grow to $1.7 billion by 2006, representing a compound annual growth rate (CAGR) of 16.4%.

Players

Logistics.com, i2 Technologies, Manugistics, Velant, LeanLogistics, Meridian IQ, G-Log , Arzoon, Irista, Provia, Red Prairie, Symbol technologies, Schneider Logistics and key ERP players like Peoplsoft and SAP are TMS solution providers and enablers in one or other way specializing Supply Chain Management Solutions.

Well it is sure SCM changes will enable industries to add more value and satisfaction to customer services. But it is also necessary to find to what extend and how atomization in SCM will be successful?

Further Readings at: -

IT Tool Box, SupplyChainBrain.com, Integratedsolutionsmag.com, Peoplesoft and Symbol Technologies.