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Effective Transportation Management Solutions

Dec 26, 2007
According to market research, the Transportation Management Systems (TMS) market had exceeded $1 billion in 2006. Through the years, the objective of a TMS implementation remains to be the achievement of customer service level requirements at the lowest possible cost.

Transportation Management Systems (TMS) is a software application, often web-hosted, that is used as part of logistics management especially for activities like managing shipping units, shipments that are outbound and intra-company, inbound shipment scheduling, bills of lading generation, carrier or transportation mode selection, freight bill auditing and payment and processing of loss and damage claims. These systems often feature a "dashboard" or a graphic user interface portal. The dashboard displays data according to key success factors that are relevant to the user.

Companies, especially those with complex supply chains, make use of TMS so as to manage and track shipments that may be carried by air, land or sea. Several shipment options are available for clients including truck, parcel, intermodal, private fleet, rail, or through domestic carriers. Some systems allow clients to track their shipments online. Other TMS incorporates Global Positioning System navigation technology to enable fleet managers to monitor and dispatch vehicles in accordance with shipment schedules. The advancement of technology has made it possible to transport goods in virtually any mode and integrating all these can be made simple with the right applications.

Transportation management solutions that have been developed are designed to automate a business firm's transportation network, both inbound and outbound. This instrument paves the way towards a more efficient day-to-day operations including source to shipment assignments. Moreover, by ensuring a smooth flow of these operational activities, relationships with suppliers and carriers may be strengthened. The benefits of integrating TMS into a company's operation strategy are not limited to the increased efficiency of the supply chain. By eliminating logistical problems, companies can focus on providing quality services to customers. Consequently, with high customer satisfaction, overall profitability of a firm will increase.

Management of transportation facilities is often associated with the concept of logistics and supply chain management. These two principles are primarily concerned with the smooth flow of certain goods from the supplier of a manufacturing firm to the end users which are the firm's customers. Aside from transportation, other important logistical concerns are inventory management, materials handling, warehousing, inventory management, and customer service. For various businesses in the United States, logistics make up 20 to 30 percent of total operating costs. By utilizing an ideal TMS program, it will be more convenient for business executives to plan and implement supply chain activities. In addition, performance efficiency of the entire supply chain will be guaranteed and the company will benefit from cost savings.

Most Transportation Management System programs are sold with perpetual licenses that may need only annual maintenance. They may also be offered with the option to avail of client hosting or with options for vendor hosting. With TMS, it is possible for clients to benefit from lowered freights, consolidation of routes, and various productivity advantages. Demand for TMS is expected to increase as companies that are still managing their transportation operations with traditional spreadsheets and faxes are expected to make the switch.
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