Transportation Management System: definition & benefits?

Today, transportation companies need to integrate ultra-efficient and innovative supply chains to challenge other competitive enterprises within their marketplace. Transportation management system thus represents the most important logistics management tool that will enable them to make a major contribution to exploit cost-cutting opportunities.

In this article, we provide you with an explanation of what Transportation Management System is, with a summary of the various agents benefiting from it and of its many benefits.

1. What is a Transportation Management System (TMS)?

A Transportation Management System (TMS) is part of a supply chain management (SCM), which is centred on transportation logistics. It enables efficient interactions between the order management system (OMS) and the distribution centre (DC) or the warehouse.

A proper Transportation Management System serves as the logistics management hub at the heart of a collaborative network of shippers, carriers and customers. It helps various types of companies efficiently move freight from origin to destination. It encompasses solutions to move freight in various modes while including intermodal movements.

By using a Transportation Management System, logistics companies will be able to reduce freight spend thanks to process enforcement, analytics as well as optimization. This system consists of four main operations:

2. Which agents will greatly benefit from a Transportation Management System?

Three major agents will get benefits from the implementation of a TMS:

3. What are the main benefits of implementing a Transportation Management System?

Implementing a Transportation Management System will lead to four main benefits for transportation companies:

The Take-Away

This article taught that a Transportation Management System consists in a logistics management hub implemented by logistics companies to efficiently move freight.

As a reminder: