Author:
Roman Slisarenko
, Software Engineer at
Techstack Ltd
Your complete requirements for TMS software will be based on your transportation networks, processes, and regional units, but should generally include the following considerations.
To begin with, what operating features should you look for? Gartner’s 2023 Magic Quadrant for Transportation Management Systems highlights the critical capabilities of the most effective systems. Here, we’ll focus on what we consider to be the core features of logistics, transportation, and shipping organizations.
- Freight sourcing (procurement management) allows businesses to compare freight options based on carriers' historical performance, routes, rates, and contract terms.
- Shipment rate management tools monitor and analyze changes in fuel prices, carrier rates, and market conditions to suggest the most economical shipping methods.
- Dock scheduling helps manage the allocation of trucks to loading docks at warehouses or distribution centers. You can schedule and track arrivals and departures to avoid dock congestion and shipment delays.
- Order planning streamlines order entry and tendering by automatically filling out details in documents for the corresponding orders. Many systems allow you to specify rules for tendering, so the TMS will automatically pick the best partners based on costs, load allocation, or end-customer preferences (based on previous shipments).
- Vehicle routing uses GPS and analytics data to determine the most efficient routes for delivery. It considers factors like road conditions, delivery priorities, and real-time traffic updates to reduce travel time. For example, truckers can consult the system to check for road closures.
- Transportation forecasting analyzes historical transportation data and current market trends to forecast future transportation needs. This insight helps you budget and strategize for high demand during specific dates, such as the holiday season.
- A settlement module handles invoicing, payments, and freight auditing processes in compliance with transportation-related regulations. This simplifies document management, financial settlements, bills of lading, and claims.
- Fleet management includes tools for managing fleet vehicle status, scheduling maintenance, and tracking fuel consumption. The software for IoT devices can provide insight into vehicle driving speed, break times, and the response time to real-time alerts. It may also monitor the environmental impact of logistic processes and enable remote transportation control systems.
- Performance management analytics uses AI and ML-powered algorithms to identify areas suitable for service improvement and cost savings based on KPIs (for example, based on on-time delivery rates, cost per delivery, and fuel consumption rates for different routes).
- An event management module can warn about real-time disruptions and unexpected deviations during delivery. One example is cold chain logistics tools that notify the driver about temperature or humidity changes in cargo with perishable products so the driver can prevent spoilage.
- Carrier communication tools provide secure, encrypted communications between managers, warehouse workers, carriers, and drivers. They facilitate coordination, real-time updates, and document sharing.
- 3D load modeling helps place the cargo in vehicles based on a virtual model. The automation feature can suggest the best placement to maximize space usage and ensure cargo safety.
These built-in features are not the only things to look out for—your TMS software must also work seamlessly with your existing systems and tools.
Modern logistics and shipping companies manage several TMS-related solutions. McKinsey research shows that 34% of transportation providers have more than eight technologies in their TM stack. Smooth integration is key to bringing all these data sources together.
Modern logistics and shipping companies manage several TMS-related solutions. McKinsey research shows that 34% of transportation providers have more than eight technologies in their TM stack. Smooth integration is key to bringing all these data sources together.
The lack of standards for data sharing between partners and vendors is a known problem among logistics and supply chain vendors. It's important to ensure that the solution converts data from other systems outside the TMS for seamless data sharing. That’s why, before committing to a TMS provider, you should check that the software integrates with your other business tools, such as:
- Enterprise Resource Planning (ERP): ERP systems should be able to integrate transportation and logistic data for more accurate resource planning and financial reporting.
- Warehouse Management System (WMS): Integrating a TMS with a WMS helps synchronize asset provisioning and inventory control to drive the efficiency of warehousing operations.
- Order Management System (OMS): OMS-TMS integration allows you to automatically capture, fulfill, and track orders across multiple eCommerce channels.
- Retail or eCommerce platform: In retail, integrating an eCommerce platform with a TMS aligns order processing and scheduling. This can allow customers to select an appropriate carrier or track their delivery.
- Business Intelligence (BI) software: The mass of TMS data should fuel your BI and data analytics software, helping you make more informed decisions and forecast trends.
- Third-Party Logistics (3PL) system: Integrating TMS with 3PL systems is essential for outsourced logistics operations, as it ensures seamless coordination during procurement and fulfillment activities.
Once you’ve checked that a TMS has the right features and integrates seamlessly with your systems, it’s time to think about your processing load.
As your logistical activities grow, so does your data volume and system load. Your transportation management system needs to be able to handle new IoT devices and software integrations easily to maintain operational performance at peak times.
To ensure you have enough operational resources at any point in time, we recommend considering the following solutions:
- A cloud-based infrastructure: Modern solutions are primarily cloud-based subscription services that help you avoid extensive hardware installation, setup, and maintenance.
- Autoscaling: This capability allows resources in cloud applications to scale up and down based on demand, so you only pay for what you need.
- Modular architecture: TMS software built on a modular, loosely coupled architecture lets you add or modify features without disturbing existing processes.
- Mobile applications: Mobile versions ensure that all your employees, from managers to field personnel to drivers, stay connected to logistics operations.
To check that a TMS will reliably scale for you, we advise getting a free trial version from the provider and testing it under extreme conditions.
After understanding what a good solution for transportation and logistics management is, you need to know how to implement it in your business operations.
