A transportation management system is an effective tool a company can use to enhance its shipping operations. These provide organizations with insights, leading to reduced costs, the discovery of more effective routes and the ability to scale to meet customer needs. Learning about this tool can help you improve your business operations, which may lead to more satisfied customers and higher sales. In this article, we discuss what a transportation management system is, explain who uses them, describe what they do and share some of their benefits.

What is a transportation management system?
A transportation management system (TMS) is a specialized logistic platform that helps organizations plan, execute and optimize the physical movement of goods. They streamline the shipping process by providing visibility into daily operations and the company’s overall network performance. A TMS is part of a larger supply chain management (SCM) system, which helps organizations manage the sourcing of raw materials for their products or services. Companies can use a TMS as standalone software or as part of an SCP and enterprise resource planning (ERP) suite.
Some TMS solutions are cloud-based, meaning the internet makes them available to users without the need for local servers. This allows for faster innovation and more flexible resources. Cloud-based TMS solutions also provide automatic updates, easier retrieval of information and improved security.
Related: What Is Supply Chain Management and Why Is It Important?
Who uses a TMS?
Companies that need to ship, move and receive goods regularly often use a TMS. This includes businesses in a variety of industries, ranging from life sciences to construction. TMS helps e-commerce companies, wholesalers, third-party organizations offering logistic services, manufacturers, retail businesses and other related organizations. Within these organizations, professionals in the following sections of transportation management may find TMS helpful:
Planning and decision making: Those concerned with forecasting and making decisions for an organization can use a TMS to determine the most efficient transportation options based on costs and other factors, such as the best carrier.
Transportation execution: TMS solutions help team members working on executing transportation services, such as accepting transportation rates and dispatching carriers, to easily track shipments and communicate with carriers.
Follow-up on transportation: Those who follow up on transportation activities can use TMS to trace freights at multiple touch points.
Reporting: Company logistics professionals working on creating reports can use this tool to create multiple reports to enhance the supply chain solutions, using dashboards and analytics.
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