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Key Factors for Selecting Transport Management System

The Transport Management System (TMS) is an important software for planning, executing, and optimising the shipment of goods. Thus, it is essential to understand the needs of an organisation, which is a key factor for choosing the best TMS. The other factors that need to be considered are the allocated budget for each phase, such as service and implementation, the ability of TMS to integrate with other internal or external systems to ensure precise or correct data interchange, and the ability to provide real-time visibility, reporting, and analytics capabilities to improve efficiency and be more cost-effective.

Logistics erp system
Image taken from SIPMM: https://publication.sipmm.edu.sg/key-success-factors-implementing-logistics-erp-system/

Understanding the Business Requirements

The benefit of understanding business requirements before starting any implementation is that it gives the opportunity to make real improvements to a business, not just change. So, understanding how the business functions in an organization and how a transportation management system could be used in the most effective way is the best place to start. It can be a strong basis for their work if they have a thorough understanding of how their organisation manages its logistics operations. And also make sure the organisations understand how their logistics operations work before conducting research on certain TMS solutions. Furthermore, it is important to understand the current and future needs of the organization to avoid spending money on items that are not actually required to manage the organisation. So, try to find a TMS that has a modular, or “building block” approach, so that organisations can modify, scale, and add features as needed in the future.

Understanding the Business Requirements
Image taken from SIPMM: https://publication.sipmm.edu.sg/five-crucial-factors-implementing-p2p-system/

Satisfying Budget Requirements

A budget is the total projected cost needed to complete a project or task over a defined period of time. It is used to estimate what the costs will be for every stage of the project or task. So, organisations must be aware of the line-by-line pricing for the transportation management software implementation, which should be reasonable and include installation costs. So, always choose a partner or vendor who can meet their needs for transportation and expectations while satisfying their resources. And make sure it can maximise the results while using the fewest resources, if possible. The chosen partner or vendor should be able to assist in reducing overhead expenses while being open and honest about their contribution to the implementation of a transport management system or process. They should concentrate on developing a proper plan to utilise the required resources and handle emergency situations as well. Selecting a vendor with an understandable and transparent cost structure is crucial for organizations. Lastly, keep in mind that unintuitive solutions could result in unforeseen and additional costs as well as implementation delays.

Satisfying Budget Requirements
Image taken from https://www.techrepublic.com/article/how-to-manage-a-departmental-budget-a-guide-for-beginners/

Integration with other Systems

Due to the complexity of the modern supply chain, it is more crucial than ever that logistics systems cooperate to automate procedures, increase operational efficiencies, and enhance customer service. Asset upkeep, real-time visibility, warehouse management system (WMS), navigation, and more are additional solutions that are frequently connected with TMS platforms. For the best distribution and shipping operations, these solutions should work together with a TMS to provide a complete picture of an organization’s business. So, look for a TMS that interacts with supplementary tools and services to satisfy specific business needs, like EDI, trailer tracking, and more. It must be smoothly connected to other systems (internal and external) in order to ensure precise or correct data interchange for efficient and smooth operation. The management of a business transportation requires seamless integration between the next generation of transport management systems and the existing systems. These consist of order and purchasing management systems, supplier relationship management, customer relationship management, and warehouse management. So, the organisation should be able to execute the orders using the least expensive carrier due to this integration. And it can also offer the organisation some benefits such as improved route planning and load optimization.

Enhancing Customer Satisfaction

Customer satisfaction is important because it show whether the customers like what the organization doing. Research proves that high satisfaction leads to higher lifetime value, greater customer retention, and a stronger brand reputation. So, the right tools should be included in TMS software to improve customer service. These tools should increase corporate productivity by assisting organisations in timely meeting client requests. So, organisations can improve their customer service by integrating solutions like automation, chatbots, and virtual assistants. Furthermore, customer service must always be the top priority for executives in all industries. So, organisations must select a TMS that can provide accurate and fast customer communication and services that provide customers the ability to view the fleet status in real time via a secure web portal. Additionally, choosing a service provider that can offer 24/7 assistance with quick response times will be an added value.


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References

Kuebix. (2019). How to Choose the Right Transportation System for Your Company. Available at https://www.supplychain247.com/article/how_to_choose_the_right_tms_for_your_company/transportation (Accessed: 10 September 2022).

LaGore, R. (2019). What to Look For In a Transportation Management System. Available at https://blog.intekfreight-logistics.com/transportation-management-system-tms-functionality-benefits-implementation-success-guide (Accessed: 10 September 2022).

Lai Jie Yin Sonia. (2018). Key Success Factors for Effective Logistics Practices. SIPMM Publications. Available at SIPMM: https://publication.sipmm.edu.sg/key-success-factors-effective-logistics-practices/.  (Accessed: 10 September 2022).

Nataraja, V. (2022). What to Look For In a Transportation Management System. Available at https://www.supplychain247.com/article/what_to_look_for_in_a_transportation_management_system/mpo (Accessed: 10 September 2022).

Tan Chee Khoon. (2020). Essential Considerations for an Integrated Transportation Solution. SIPMM Publications. Available at SIPMM: https://publication.sipmm.edu.sg/essential-considerations-integrated-transportation-solution/ (Accessed: 10 September 2022).

Tan Chin Hong. (2021). Crucial Factors For Logistics Integration. SIPMM Publications. Available at SIPMM: https://publication.sipmm.edu.sg/crucial-factors-for-logistics-integration/(Accessed: 10 September 2022).

Cheryl Liong Pei Hua, Diploma in Logistics and Supply Management
Cheryl Liong Pei Hua, Diploma in Logistics and Supply Management
Cheryl Liong Pei Hua has substantive years of experience in the specialised field of logistics transportation, and specifically in both inbound and outbound logistics for LCL and FCL freight shipping. Chery lis a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). She completed the Diploma in Logistics and Supply Management (DLSM) in September 2022 at SIPMM Institute.
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