Transportation management system

A Transportation Management System (TMS) is a software system designed to manage transportation operations.

TMS are one of the systems managing the supply chain. They belong to a sub-group called Supply chain execution (SCE). TMS, whether it's part of an Enterprise Level ERP System or from an integrated "Best of Breed" Independent Software Vendor(ISV) has become a critical part of any (SCE) Supply Chain Execution and Collaboration System in which real time exchange of information with other SCE moidules has become mission critical.

In more recent times, we have seen that these systems are being offered in many different types of licensing arrangements. These different arrangements have given shippers who otherwise would not be able to afford sophisticated software the opportunity to utilize TMS to better manage this vital function. The 3 primary offerings are:
*"1. On-Premise Licensing (traditional purchased license)
*"2. Hosted (remote)
*"3. On-Premise Hosted Licensing (a blend of 1 & 2)

Additionally, we are seeing that many software providers have either been acquired or merged with traditional supply chain management consultancies and are now offering shippers "blended" managed and software services as an outsourced process.

TMS usually "sits" between an ERP or legacy order processing and warehouse/distribution module. Atypical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions. These solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider. Once the best provider is selected, the solution typically generates a "pick list" or a type of output that is passed to the warehouse/distribution module for picking and loading.

Transportation Management Systems manage three key processes of transportation management:

*1. Planification and Decision

TMS will define the most efficient transport schemes according to given parameters, which have a lower or higher importance according to the user policy: transport cost, shorter lead-time, fewer stops possible to insure quality, flows regrouping coefficient…

*2. Transport follow-up

TMS will allow following any physical or administrative operation regarding transportation: traceability of transport event by event (shipping from A, arrival at B, customs clearance…), editing of reception, custom clearance, invoicing and booking documents, sending of transport alerts (delay, accident, non-forecast stops…)

*3. Measurement

TMS have or need to have a Logistics KPI reporting function for transport.

Various functions of a TMS:
*Planning and optimising of terrestrial transport rounds
*Transportation mode and carrier selection
*Management of air and maritime transport
*Real time vehicles tracking
*Service quality control
*Vehicle Load and Route optimization
*Transport costs and scheme simulation
*Shipment batching of orders
*Cost control, KPI (Key performance indicators) reporting and statistics
**Typical KPIs include but not limited to:
# % of On Time PickUp or Delivery Performance relative to requested
# Cost Per Metric - mile; km; Weight; Cube; PalletMore examples of [http://free-logistics.com/index.php/Spec-Sheets/Logistics-Supply-Chain-KPI/Transportation-KPI.html Transportation Management System KPIs]