Installing vehicle tracking systems on a commercial fleet is a clever move, but businesses miss out on many related benefits when they stop short of considering using comprehensive transportation management systems. Transportation management systems basically take tracking systems into the greater sphere or supply chain management, thereby allowing much smarter operations, connecting warehouse optimisation and fleet management. In terms of accountability, flexibility, and ultimately, savings on operations, the benefits are priceless.
Definition and features
Transportation management system is a software product with many features to connect warehouse operations to fleet management and delivery planning.
Definition of a transport management system
Also called transportation software, this product eases interactions between the Order Management System and distribution centre or warehouse management system. This software is therefore an essential part of the logistics management hub, and helps decide which products need to be shipped from where, to what destination, using which vehicle in the delivery fleet, so as to deliver the product as quickly, safely and cheaply as possible.
A transportation management system will typically include the following features:
- Route planning and optimisation, so that the nearest warehouse is selected, relatively to the point of delivery,
- Freight and audit payment,
- Yard management,
- Advanced shipping,
- Order visibility to both the supplier and customer,
- Carrier management, in case of large fleets or third-party carriers,
- Load optimisation, so that each vehicle is loaded with as many items as possible, considering the sizes of the packages and available space in each vehicle type.
Benefits of a transportation management system
Transportation management systems which have been correctly integrated within the IT resources of the company therefore provide many benefits related to accountability and flexibility, ultimately driving down operational costs significantly.
When transportation software is used, each traded item can be tracked all the way from the moment it enters the warehouse to the customer’s doorstep. Goods don’t get lost or stolen, as it is possible to track every item at every step of their journey: this greatly helps build trust between all parties involved, from the warehouse clerk to the delivery agent and final customer.
In the delivery services, the unexpected has to be expected 24 hours a day, 7 days a week. It is therefore extremely useful to be able to change plans anytime, without disrupting the whole delivery chain. Indeed, with transportation software, nothing gets lost, and all delivery options, all warehouses, carriers and vehicles can be monitored in real time, with hints at alternative fulfilment options - it’s as easy as asking a GPS for an alternative route.
Transportation management systems allow accurate, fuel efficient traffic-optimised route planning, carrier mix in case several vehicle types need to be combined along the way, and mode selection. All these options have only one goal: making sure the delivery is as economical as it can possibly be.