Transportation Management Systems (TMS) have been around for a long time yet they have not seen widespread usage until recent times due to cost concerns. Most companies cannot afford to spend on resources required to develop and implement a TMS onsite, leaving only large entities to take advantage of the system.
With the rise of the cloud, that scenario has changed. The availability of the software on affordable software-as-a-service (SaaS) model is creating a level-playing field for companies. Most of today’s TMS software leans toward cloud- and web-based systems, which can be accessed by nearly all of the related parties in contrast to previous TMS systems located on premise and which had limited communication capabilities.
Companies have seen a steady growth after implementing cloud-based TMS solutions as the technology helps achieve savings on their transportation budgets and gives a good return-on-investment.
There are multiple factors influencing companies to implement a TMS. An important turnaround in the history of TMS is the availability of cloud-based TMS which has considerably lowered the investment threshold compared to the initial cost of a standard TMS. In the past, prohibitive costs discouraged shippers from spending on development and implementation of a TMS on the premises. With the advent of the cloud, shippers have the option of a TMS in a SaaS environment. This means the initial cost is lowered and the company can benefit from a transportation management system based on newer technologies.
The increased acceptability of 3PLs has led shippers to shed their reluctance to outsource their transportation operations and move towards managed transportation. Shippers do not have to invest in their own TMS technology and yet get the benefits of it through value-added services offered by 3PL companies using the TMS system.
Shippers benefit in many ways from the increased use of a TMS. TMS has a proven track record with shippers that have implemented a TMS, seeing increased ROI.
Data storage, analysis and application play an important role in TMS. Under the conventional system, in-house storage translated to a huge cost but now with the use of cloud-based TMS application, companies can rely on the computing powers and storage facilities of the cloud, saving on costs of onsite storage and maintenance.
The analyzing and forecasting capabilities of TMS will encourage shippers to work proactively which would be a major shift from their traditional reactive mode of working. Companies and employees can gather intelligence on things that could go wrong and work out solutions to preempt them, making the entire process more efficient and competitive. This would greatly benefit the company in terms of better customer service.
Decision making is an essential part of the job, from the management to the rank and file. But decisions should be based on accurate information and data in order to be most effective. TMS enables such decision making as its captures a wide range of information and data that facilitates decision-making at the right time using the proper information and without any delays.
In any business there are moments when urgent decisions have to be taken at the last moment and many of these decisions have a direct impact on the company’s revenue. If these decisions can be made on the basis of better data, this would give rise to an opportunity to analyze information and arrive at the right decisions. This could save the company from unnecessary costs. This why TMS is finding widespread use across the supply chain with shippers and 3PLs implementing it more assertively in recent times than ever before.