By now you would have heard of transportation management system or TMS and all its benefits for shippers. It’s talked about all the time by those in the shipping or supply chain management industry, but it isn’t always clear what investing in a TMS will do for shippers. Sure, they always say that it reduces overhead to save money shipping, but how exactly? Let’s explore the ROI of TMS that also optimizes the supply chain.
You might be managing your operations through endless spreadsheets, warehouse management systems, and enterprise resource planning or ERP. While these systems do allow you to determine where the product is in its life-cycle, they can’t always let you track the product’s exact location by entering a tracking number. This is where transportation management system makes a difference.
With a transportation management system you can easily import and export data, as well as simplify payments and accounting through billings and routine reports. In fact, there is some TMS shipping software that can point out over-payments and over-billings and request for refund. They can also provide report of weekly payments for freight in a simplified report. In addition, TMS enables you to manage your inventory from anywhere at anytime, which ensures you that you have the product in stock when your customers need them. This means a decrease in the load of work and stress while still being able to meet customer demands.
Inventory control has taken drastic changes in the TMS era. Cloud-based TMS shipping software is able to look out for key trends that aren’t obvious by utilizing shipping data analytics. For example, it’s common knowledge that sales will rise on the holidays, but analytics can predict peaks in seasons you think would be much slower.
Another way TMS shipping software can lead to a solid ROI is through fewer refunds and chargebacks from customers. Your company is often held liable for shipments that arrive late or when the product gets damaged. If you ask your carrier about this, they may just direct you to your freight insurance plan. Imagine if you could identify these troublesome issues when they become more than just a mere inconvenience. Do you know how much these incidents are costing your company overall?
It’s possible it could cost you both current and potential future customers. Shippers are becoming increasingly concerned with delays and late delivery of goods. While signing up the cheapest carriers for their services may seem like the best choice on the surface, you might find that they contribute to this industry-wide issue and may end up costing you more.
You don’t really expect your customer to be alerted when you schedule a shipment pick-up. This can be a sign of potential problems and is an example of lack of visibility within the supply chain, and a transportation management system can help. All parties, and by all, that would include vendors, shippers, carriers, and even customers should be updated. They should all have the ability to know the exact location of the shipment and when it will arrive through the TMS. This information shouldn’t eat up hours on the phone every time you relay it.
Luckily, thanks to TMS shipping software over the cloud, this data is easily provided to all parties. While customers wouldn’t have access to your TMS, you can easily transfer the information to another interface where customers can login and see the status of the shipment. This allows for efficiency in scheduling which leads to better shipping capacity. So putting it simply, better shipping leads to increased revenue and supply chain optimization.
In and Out
Inbound and outbound supply chain management are just the opposite sides of a single coin, and both of them can benefit from adopting a TMS. Freight expenditure can be decreased from implementing a transportation management system. This goes for both inbound and outbound freight costs.
Moreover, you are assured that your vendors are sticking to your preferred carriers as well as rules when shipping products to your company. At the same time, you can optimize your supply chain and product flow out to customers. This pairing creates a steady and reliable inventory flow which lets your business grow. Transportation management system shipping software also helps staff by reducing the paperwork required per shipment while still keeping every important document and allowing them be accessible every time they are needed.
More vendors, shippers, and businesses are considering implementing a TMS to manage their inbound and outbound logistics needs to optimize supply chains. While customers are pressuring shippers to deliver flawlessly without delay and with the lowest cost, there’s no time to waste. You would need to automate in order to boost efficiency and reduce overhead. You need to look beyond the surface and see what other aspects of the business can produce more savings. Today is the day for you to implement a TMS, because no other shipping software or supply chain optimization solution can bring about a better ROI.