Along with the cost of staffing and materials, shipping and transportation management consistently ranks as one of the most expensive items in a company’s budget.
One of the reasons for this is that many companies, both large and small, still use outmoded methods of managing their transportation services – spreadsheets, multiple phone calls, etc. – that don’t take advantage of new services and technology.
A well-run Transportation Management System (TMS) can provide an ideal solution – yet there's a common misconception among many small and mid-sized businesses (SMBs) that such systems are the sole province of large companies.
The truth is that virtually any company can benefit from the streamlining capabilities of a tailored TMS. It's just a matter of understanding what options are available and knowing the right questions to ask before selecting one.
A few benefits of a TMS
Thanks to technological advances like cloud storage and precise tracking software, a modern TMS provides many advantages over older, more traditional approaches.
Optimized freight routing
A TMS enables you to route both inbound and outbound shipments more efficiently – with fewer miles, fewer stops, and less overall travel time.
A modern TMS allows for end-to-end tracking and visibility of shipments. They also provide real-time communication and transparency between carriers and customers.
Through a TMS, companies can monitor order and shipment lifecycles in real-time – getting accurate inventory forecasts while improving accountability across their entire supply chain.
Enhanced warehouse efficiency and productivity
By pairing a TMS with a Warehouse Management System (WMS), companies can create a record of orders and track where they are at all times – in the distribution center, in transit, and at the final location – ensuring timely and efficient transport.
By automating the process, a TMS eliminates much of the paperwork that was required in older systems. This significantly reduces administration expenses, invoicing errors and billing issues.
A better overall customer experience
Today’s customers are not known for their patience. By using data to track key performance indicators such as on-time delivery and more, the right TMS can bridge the gap between high customer expectations and cost-effective order management for shippers.
How to choose the right system for you
Too often, when considering their TMS options, companies get caught up in comparing features and pricing instead of focusing on what system offers the best fit for their business. So here are a few factors to keep in mind.
Accurately assess your current and future needs
Don’t pay for a full gamut of features that you won’t end up using. Instead, find a modular TMS that allows you to scale functionalities when it makes sense for your business.
Evaluate your current technology
You’ll want any system you implement to integrate seamlessly with your existing technology. This includes ensuring that you’re not duplicating services. (For instance, if you already have a robust CRM tool in place, you won’t need that from your TMS.) Look at what needs are being met by your current technology. Then also identify the potential integrations – from Electronic Data Interchange (EDI), to trailer tracking and beyond. Look for a system that complements your existing tools and services.
Identify your goals for the system
You’ll find that certain TMS solutions are better at some functions than others. So look at what benefits are the most important for the unique needs of your business – whether it’s maximizing efficiency or reducing overall costs.
Understand the options available
Generally speaking, there are three common types of TMS platforms available: homegrown, on-premise, and cloud-based. Each one offers specific pros and cons, so it’s important to understand your goals for the system.
Homegrown systems are custom-built for your company. In this approach, your own IT team (or a contracted team) builds the system to your specific requirements. This is the TMS model that many SMBs think of first – which is why they quickly dismiss the idea of adopting a TMS for their business. While there are advantages to this approach, this isn't an option for companies of all sizes. For instance, you may not have an in-house IT team capable of completing such a project.
On-premise systems are off-the-shelf products you purchase from a TMS provider but host on-site. Often, you’re able to customize elements of the system. But while there are advantages to purchasing something that’s been vetted by many other companies, there are limits to how much you can tailor the system to your needs.
Cloud-based systems are hosted off-site and require a simple subscription. Given that they can be quickly updated and enhanced, cloud-based systems are increasingly becoming the standard for companies of all sizes. They’re highly scalable, and they provide everyone on your team access to the most current information. This makes them an ideal choice for SMBs looking for a way to optimize their shipping.
A good example of a scalable cloud-based TMS that puts control directly in your hands is Averitt Connect – powered by MyCarrierTMS. Averitt Connect is a self-service, multi-carrier TMS that allows shippers to control their shipping needs directly with their carriers. It lets you shop LTL rates from different carriers, then book and track shipments through an online portal. Best of all, with multiple tiers and plans available, it lets shippers pick the TMS that’s right for them. To learn more, visit AverittConnect.com.