We see that the distribution system has developed very fast in recent years. All create fair competition in the market, and there, the successful business is one that applies the development of technology to provide a better experience for customers. And when it comes to the development of the distribution system, it is impossible not to mention the transportation management system (TMS).
There are many benefits of TMS that manufacturers, distributors, and anyone involved in the freight process can recognize. A transportation management system (TMS) helps companies efficiently transfer goods from their starting point to their destination at the lowest cost.
What is a TMS ?
Not everyone is familiar with the TMS because not all businesses know how to apply the development of technology to the distribution channel; many companies currently are still struggling with manual management methods. So first we will learn more about this system.
Transportation management system (TMS) includes a set of solutions to move goods during the process from receiving goods to payment, even connecting transactions between trading partners.
Perhaps no other supply chain application provides much value and boosts efficiency for distribution channels like TMS. But in terms of all the benefits, cost savings are considered the main reason businesses apply TMS. TMS helps companies to save costs by setting up a unified management system, proactive real-time information transmission, reducing downtime between departments. There is hardly any other supply chain application that provides many forms of cost optimization like TMS.
5 benefits of Transportation Management System
To better understand how does TMS helps businesses grow. Let’s learn about the 5 benefits that TMS brings to companies.
1. Increased Customer Service
Sure, if you can use TMS with detailed reporting and analysis, you can see the effect greatly increased after the application of this system. When you choose a delivery service partner, some companies offer very low-cost services, but they don’t deliver on time or the goods are broken, and your customers are very dissatisfied. Meanwhile, some other companies use the TMS system; they always deliver products on time 100% and quality assurance; your customers are delighted with this.
Therefore, it is clear that the use of TMS has created a business advantage for companies, starting from improving the customer experience. You know, in the current business era, customer experience is considered a significant factor in evaluating the competitiveness of businesses.
2. Warehouse Efficiency
The more an enterprise applies the transport management system, the less time it takes to manage the warehouse and more time to do other tasks in the warehouse. Moreover, if your TMS is integrated into other systems in the enterprise, such as ERP, you will reduce the time to enter data into the system, of course, it also limits errors the same manual input method. TMS makes warehouse management more comfortable, more efficient, and saves costs.
3. New Delivery Capabilities
The transportation management system provides the ability to optimize the way goods are transported. For example, you want to combine delivery points on the same route to speed up delivery and save costs. The transportation management system can allow you to create applications with different login information from multiple locations easily. Orders are consolidated into the system and are rotated according to delivery and receiving points.
4. Inventory Reductions
The TMS system gives you the confidence that your customers are receiving shipments on time, which allows you to better plan stock items. When you have an accurate inventory of your items in place, along with customer demand forecasts, you can run new imports and reduce inventory.
5. Cash Flow Improvements
By integrating accounting software and TMS, businesses can control payment information. From this integration, you will know how to optimize your cash flow and cut down on unnecessary expenses. A study said that using TMS helps businesses manage cash flow better and can save 2% to 5% of the total shipping bill by eliminating inaccurate charges or duplicate payments.
The above are not all the benefits that the TMS system gives you. You know, when you apply an advanced transportation management system, all related systems benefit, and it brings a lot of other benefits to your business.