Owners of small and medium-sized businesses may consider a TMS tool a luxury, not a necessity. However, TMS is becoming you may not be able to operate efficiently regardless of your business size. In addition, it has so many benefits that they can justify the added costs.
A TMS platform automates the entire supply chain processes by facilitating communication among the partners. Depending on its scale and complexity, the software can manage orders, organize warehouse operations, and track shipment. But most importantly, it helps you find the best shippers at the most reasonable prices.
You can also integrate other tools used in the supply chain to streamline your operations. CRM, CMS, accounting, and WMS tools are the most commonly integrated programs into TMS software.
If you own a small or mid-size business, you may think that using TMS software cannot help you streamline your processes. Small and mid-size companies mostly rely on paperwork and manual solutions to organize and manage their orders and transportation.
However, manual management of processes always comes with an inevitable chance of human errors. Plus, unautomated tasks take longer to complete and aren’t efficient. Most importantly, smaller businesses can integrate a TMS platform more easily than large businesses. That’s because larger firms have more ground to cover, from training employees to implementing the software for larger and more departments.
On the other hand, smaller firms can easily manage the software’s implementation process because their business isn’t still complex. So, regardless of your firm size, you can benefit from a fitting TMS platform.
Let’s take a look at the most important TMS advantages for your small or mid-sized business.
The first and foremost effect of using TMS in your small or mid-size business is integrating technology into your operations. As mentioned, it’s something you’ll have to do sooner or later to enjoy the benefits of technology and full automation.
The most tangible effect of using technology in your supply chain is increased efficiency across the board. Managing orders and logistics involves handling sophisticated requirements that take time and resources to accomplish. The TMS tool simplifies these complexities thanks to its massive data pool.
The TMS software has a pool of all carriers working in all modes – land, sea, air – and compares the best carrier based on prices and the type of cargo. Without TMS, your staff has to manually find the best route and carrier. While that’s possible, it’s inefficient and with higher chances of human errors.
They have to visit each carrier’s website, go through their offerings, contact them by phone or email, and negotiate terms. A TMS tool gathers all these carriers in a single platform and gives you any information you need for making decisions.
Technology can help you manage these processes and make decisions more effectively. It gives you real-time data about all the shippers and their performance records, allowing you to choose the best ones.
In addition, a TMS tool allows you to integrate other software related to supply chain management. This way, you can monitor all steps on a single platform, from order management, quotes, and billing, to warehouse management. As a result, all decisions are made on the same tool, using any data you need across the chain.
Even in the warehouse, you can coordinate the activities and help your staff perform more efficiently by telling them when they should expect inbound cargo and prevent trucks from waiting.
A direct result of improved efficiency is lower costs. When you perform your operations automatically, everything is managed faster and error-free. Human errors can force you to repeat the entire process, wasting time and money.
When you automate the transportation process, you have more time to focus on growing other aspects of your business. Thus, the investment in a TMS tool can prove beneficial in the long run by giving you opportunities to scale your business.
A TMS tool helps businesses access different services at lower costs. Small and mid-sized companies may not have enough resources to work with several carriers. As a result, they have to stick with one carrier regardless of their process and quality of services. As mentioned, a TMS tool can find you the best carrier to do the job with the highest efficiency and lowest prices.
After finding the best carrier, you can plan the best and shortest route to deliver the freight. Lower fuel expenses and on-the-road costs are the direct outcomes of route planning.
In addition, it can suggest ways to reduce costs in other areas by gathering data from every operation involved in the process. For example, the software can integrate the WMS tool and show you how to reduce costs by organizing the warehouse. In addition, it helps you find the best way for truck and pallet utilization. As a result, you can send more cargo with a single truck at lower costs.
Another area that can be highly effective in reducing costs is regulatory compliance. You can avoid fines by ensuring your cargo doesn’t violate regulatory standards.
Customer satisfaction is one of the most significant outcomes of a transportation management system. A robust and organized way of handling orders is a competitive advantage that can attract and retain customers.
Giving quotes and billing the customers in an orderly fashion, planning the transportation routes to deliver the goods on time, and allowing the customers to track their orders in real-time can all make a great impression on the customers. Customers know when their package will arrive, allowing them to plan their time and feel in control.
In addition, the TMS software enables you to be ahead of issues that can happen down the road. As a result, you can make preemptive decisions and avoid problems that reduce customer satisfaction. Even if the shipment is delayed, you can inform the customer to avoid further complaints.
You can also use data about the carrier’s performance, such as handling cargo with care or delivering orders on time. This data can help you choose the best carrier to deliver the goods on time.
Customers can also communicate with you through the messaging apps offered by the TMS software. This can be a significant benefit that helps your customers feel they’re valuable and being served with respect.
Finally, data and reports can be used to detect customer trends and preferences. You can increase customer satisfaction by addressing these preferences and giving them what they want.
TMS is a great source of business insights. Handling shipments and working with carriers can generate loads of data and reports that can be useful for future decision-making. These insights can be anything from the carrier’s performance and prices, repeated problems that should be addressed, or ways to lower unnecessary costs.
Additionally, a transportation management system can track and analyze KPIs, generating actionable reports. This way, you can fine-tune your policies to your business weaknesses and strengths. More specifically, you can improve logistics using transportation analytics provided by the TMS.
An important TMS benefit is that the software gives you more control over your freight transportation, allowing you to track the shipment from the source to the destination. This real-time data enables you to make more informed decisions because you can be better prepared for unforeseen situations. Plus, the automated nature of the process means lower or zero human errors.
Integrating other software with TMS gives you full control over all parts of the supply chain. Even the drivers can benefit from the software. They can access assigned tasks on their mobile apps, reducing paperwork and confusion.
In addition, it can generate real-time visibility over the routes and the transportation process. This way, you can switch routes if the current road is congested, for example. The software sends you instant notifications about any hurdles to let you act quickly. As a result, you can avoid delayed deliveries by adjusting and optimizing the conditions in real-time.
Giving clear ways to organize your finances is another advantage of TMS for small and mid-sized businesses. Auditing invoices and billing payments are among the most sensitive parts of any business. They’re prone to human errors and take a long time to process.
Human errors can be minimized in all facets of the process, including billing and payment. The software performs all these tasks automatically, approves invoices, and issues bills. You can detect unpaid checks or other problems in paying transportation fares through the TMS software and send your customers automated invoices.
If you have hazardous materials to ship, the software can find you the best carrier to minimize risks. The software selects the best carrier to transport these materials to ensure public safety.
In addition, it prevents your business from receiving penalties from regulatory bodies by ensuring you comply with standards.
The software ensures you can operate legally and prepares all the legal documentation required for shipping cargo. Plus, it checks the terms and conditions agreed upon by the parties and guarantees they meet all these conditions.