Transportation Management Systems are Vital to the Supply Chain
by:
Julie Pitts
Ever wonder how an order placed with a company half way across the globe can arrive on your doorstep the next day? Even with the vast means of transportation in place, it still boggles my mind. I have traveled to other states and countries by train or airplane. I know how long it takes to get from New York to Munich or from Philadelphia to Los Angeles. It is difficult enough getting myself from place to place. I can't imagine being in charge of hundreds or millions of products shipped daily. This is why technology and software are key to the transportation world.
Think about the process when you place an order online. Say you go to a clothing manufacturer's site and order a sweater. You could be one of thousands ordering that same sweater that same day. How does the manufacturer insure that everyone receives the correct sweater, to the correct location, all in a timely manner? If the company is large enough to sell such a large quantity of sweaters, they must have the technology and software to handle distributing the product.
The software that the company uses to manage their transportation operations is called a Transportation Management System (TMS). The software is put in place so the company can meet customer service levels at the lowest possible cost. On a small level they manage the orders place by individual shoppers. And, on a larger level they handle all transportation operations from vendor to vendor, warehouse to distribution center, distribution center to store front, and much more. These operations are quite costly and if the proper TMS is not in place, a company can lose money.
What exactly does Transportation Management Systems do? In short they analyze, evaluate, and choose the most cost effective route for orders (whether inbound or outbound). They will optimize the transport rounds for each territory to ensure the best method. Many TMS programs also have real time tracking included. This allows the manufacturer to follow the order along the entire route and make any needed changes if problems arise.
On top of the standard functions, TMS software can be customized for whatever industry or company it is being used to support. For example, the sweater manufacturer we discussed could include a TMS in their supply chain logistics and use it to report on the service quality and cost control of their transportation and distribution.
The benefits of a TMS are endless. With our growing society, increase in products and services, and global interaction, companies would not survive without a TMS. So, the next time you order a product online, be happy to know that the TMS in place will ensure you receive what you want, when you want it.
About the Author:
Julie has experience with supply chain management and TMS through her reseacrh and writing for Go4Sight. The company offers Transportation Management Software and consulting, as well as many other
supply chain consulting and management programs.
No. of Times this article has been viewed :
369
Date Published :
Mar 11 2010
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