TMS and its use in logistics

TMS or Transportation Management System is software that manages the movement of cargo outside storage units. When we translate it into Portuguese, it becomes very clear: Transport Management System. A software that works interconnected with others (such as the WMS, which manages warehouses, and the ERP, which takes care of the entire company) in order to make life easier for managers, providing information in real time (depending on the technological resources used) and improving performance in productivity and quality. With it, it is possible to plan, monitor and optimize transport operations in their operational and administrative aspects.

The investment varies according to the independent modules that will be acquired by the entrepreneur, guaranteeing the customization of the program according to the company’s needs.

But despite the possibility of unique customization, there are already pre-defined types of TMS according to the classification of the company, which can be a shipper, a carrier or a logistics operator.

If you are a shipper, that is, a company that uses a third-party fleet to move its cargo, the Transportation Management System helps you to perform the following tasks:

• Freight contracting;
• Issuance of documents related to transport;
• Avoid paying undue or incorrectly calculated fees, remembering that in addition to the freight itself, there are several other components in the cost of transportation (insurance, fees, tolls, inputs, etc.) that make the calculation quite complex;
• Control taxes levied on transport services and their respective credits that can be recovered in other operations;
• Monitoring the performance (KPIs) of contracted carriers;
• Data analysis and indicators for decision making;
• Ensure that the services are performed by the suppliers under the agreed conditions (prices and terms);
• Provide accurate information to internal and external customers regarding the transit of goods;
• Integration with partner carrier systems.

But if we are talking about a carrier, a company whose focus is to move customer loads, then the TMS performs other functions, according to the tecnovia.com.br website:

• “ Control of the freight tables of each client;

• Allocation, planning and monitoring of vehicle services;

• Control of loading and unloading of vehicles;

• Issuance of transport tax documents (CT-e, NF-e, MDF-e, etc);

• Control of occurrences, pendencies, claims, indemnities, etc.;

• Vehicle fleet maintenance control;

• Calculation and payment for outsourced drivers/vehicles;

• Billing and collection of customers;

• Tax, accounting and management reports ”.

A logistics operator (a company that performs the acquisition, storage, transport and distribution works outsourced to its customers) must acquire a TMS that can fulfill all the actions described earlier in this text. After all, in some operations this company will act as a shipper and in others as a carrier. In addition, the software must be able to:

• demonstrate the profitability of each job;
• deal with multiple modes (road, rail, sea, river and air) in the same operation;
• and also producing managerial reports for contractors.

Oh! Of course, companies that carry out the transport of their goods themselves can also buy a TMS. In this case, the program will carry out the operations of a carrier, but with a single customer, which is the owner of the moved goods.

According to the Maplink Global      website , the Transportation Management System offers advantages that justify the investment in the program:

• Cost reduction in operations — the main advantage of using this type of software is the possibility of reducing operating costs, since it allows you to view and control all expenses involved in transport management and service monitoring, setting goals according to needs ;
• Preventive care in relation to the fleet — according to reports made by drivers and knowledge of vehicles, it is possible to predict mechanical or electrical problems in vehicles from detailed and easily accessible information, performing preventive maintenance;
• Modernization of transport management — this is a competitive advantage in the market, since being up-to-date and using technologies that allow for greater performance and productivity can be a decisive factor to stand out from the competition;
• Process automation — the software is able to provide real-time information on the entire process, allowing greater agility and, consequently, greater productivity;
• Possibility of integration with other software — TMS is compatible with other management software, such as WMS and ERP;
• Improved productivity rates — this is due to better management of time and resources due to the automation of processes;
• Reduction in the incidence of errors — process automation reduces the risk of errors due to human error;
• Building a more productive team — technology does not replace people. Human beings are irreplaceable. With the help of TMS and other types of systems, employees stop performing repetitive tasks to dedicate themselves to strategic actions, aimed at the company’s growth;
• Greater security in the management and exchange of information — the program allows monitoring of the entire process through data generated in real time, which contributes to more efficient decision-making;
• Improvement of results in general — thanks to all the benefits already mentioned, better performance is obtained throughout the entire transport process, which consequently generates better results.

And when should the entrepreneur invest in a TMS? The answer seems simple, but it’s not. At the moment when the work done manually no longer meets the needs of the corporation. Each manager will know what this point is.

Did you like the text? Águia Sistemas S/A is a national leader in Intralogistics and we can help your company to always find the best solution in this field. Keep in touch with us!