According to market research, the Transportation Management Systems (TMS) market had exceeded $1 billion in 2006. Through the years, the objective of a TMS implementation remains to be the achievement of customer service level requirements at the lowest possible cost.
Transportation Management Systems (TMS) is a software application, often web-hosted, that is used as part of logistics management especially for activities like managing shipping units, shipments that are outbound and intra-company, inbound shipment scheduling, bills of lading generation, carrier or transportation mode selection, freight bill auditing and payment and processing of loss and damage claims. These systems often feature a “dashboard” or a graphic user interface portal. The dashboard displays data according to key success factors that are relevant to the user.
Companies, especially those with complex supply chains, make use of TMS so as to manage and track shipments that may be carried by air, land or sea. Several shipment options are available for clients including truck, parcel, inter modal, private fleet, rail, or through domestic carriers. Some systems allow clients to track their shipments online. Other TMS incorporates Global Positioning System navigation technology to enable fleet managers to monitor and dispatch vehicles in accordance with shipment schedules. The advancement of technology has made it possible to transport goods in virtually any mode and integrating all these can be made simple with the right applications.
Transportation management solutions that have been developed are designed to automate a business firm’s transportation network, both inbound and outbound. This instrument paves the way towards a more efficient day-to-day operations including source to shipment assignments. Moreover, by ensuring a smooth flow of these operational activities, relationships with suppliers and carriers may be strengthened. The benefits of integrating TMS into a company’s operation strategy are not limited to the increased efficiency of the supply chain. By eliminating logistical problems, companies can focus on providing quality services to customers. Consequently, with high customer satisfaction, overall profitability of a firm will increase.
Management of transportation facilities is often associated with the concept of logistics and supply chain management. These two principles are primarily concerned with the smooth flow of certain goods from the supplier of a manufacturing firm to the end users which are the firm’s customers. Aside from transportation, other important logistical concerns are inventory management, materials handling, warehousing, inventory management, and customer service. For various businesses in the United States, logistics make up 20 to 30 percent of total operating costs. By utilizing an ideal TMS program, it will be more convenient for business executives to plan and implement supply chain activities. In addition, performance efficiency of the entire supply chain will be guaranteed and the company will benefit from cost savings.
Most Transportation Management System programs are sold with perpetual licenses that may need only annual maintenance. They may also be offered with the option to avail of client hosting or with options for vendor hosting. With TMS, it is possible for clients to benefit from lowered freights, consolidation of routes, and various productivity advantages. Demand for TMS is expected to increase as companies that are still managing their transportation operations with traditional spreadsheets and faxes are expected to make the switch.
By: Sam Miller
Posts Tagged ‘Logistics Management’
Departmental Integration: Key To Logistics Management
November 5th, 2009In essence, logistics management is the overall administration of all available resources to meet the demands of the public or the targeted consumers of each company. This requires the involvement of several key areas of the organization to ensure the smooth flow of business, not only in terms of sales and finances, but also service delivery to its market. In general, this is the amalgamation of all resources and departments to join forces in solving any existing issues and achieving an organizational goal.
The business approach of today incorporates every personnel and every machine that contributes to the overall success of the company. Approaches may involve Six Sigma-a known analytical tool of which the proponent is Motorola-to identify the defects and its sources and to come up with correct action plans that will reduce the occurrence of these defects. The Six Sigma principle indicates that there should only be six defects for every million output.
Once defects are analyzed and its sources are figured out, the organization will know where to put its energy instead of blindly creating new approaches to every problem that will occur. The main goal is to prevent the occurrence of the problem by eliminating the defects from the actual source. Sometimes, this may involve man, machine, method, and process. There may be extraneous variables, such as environmental factors and personal behaviors that may not be easily addressed. In this case, a long term action plan is necessary.
Logistics management not only involves personnel but also resources. For example, a business office may get its paper supplies from one source, its pencils from another one, and its ink from another company. One organization does not source its tools from one company alone. The main goal of logistics in terms of resources is to find the cheapest yet durable or ideal material from different sources and put these materials together to come up with a product. A canned good factory gets its sodium glutamate from one company and its processed meat from another. In the end, the final output is the canned good.
Add to this the several key functional areas that play critical roles in the output or the product. Plus, even if the product is good to go, there has to be people who will take care of its marketing and advertising. There is no point in coming up with the most delicious food in the market if no one will know about it. To address this, a company employs marketing strategies that streamlines public awareness of the products existence. This involves trucking, advertising, and so on.
Other than that, the goods should be kept fresh and of high quality to meet the standards of the consumers. This means that every person and every machine should have a controlled output in relation to the demand of the people. There should never be overproduction, as this will eventually lead to lost revenue. A good product that cannot be consumed is of no value to anyone. All of these things-manpower, production, raw materials and resources, marketing, and service delivery-should be centralized before a company can say that it has an efficient and effective logistics management strategy.
By: Sam Miller
