Pros And Cons Of Using A TMS Platform

Written by Paul Forand
     

The Benefits And Challenges In Implementing A TMS

TMS-PlatformIs implementing your own Transportation Management System a good idea for a modern company?  Much of the time, the answer is yes... but it's not always that simple.

As modern transportation systems become more computerized and data-dependent, it's putting pressure on small businesses to comply. The freight carriers are already using highly advanced systems to optimize their routes and fuel usage, although they may not be sharing this information with their customers.  

Implementing a TMS is one option for dealing with this.  A Transportation Management System will give you an all-in-one-place solution to your product data and shipping needs, while allowing quick lookups and reliable price estimates.  There are plenty of advantages to a TMS, but the challenges are significant.

I. Benefits

1 - Data Accuracy

The first and biggest benefit of a well-implemented TMS is that it creates a single, reliable, and up-to-date database of all your products and their shipping characteristics.  This will largely eliminate fees from improper freight classification; for example, as well as to help ensure you are giving your customers accurate shipping quotes.  

2 - Universal Availability

A TMS isn't simply a "back end" solution - it extends to every piece of your operation that touches shipping.  Agents at a remote point-of-sale kiosk can get accurate quotes as quickly as someone at HQ.  Standardizing on a single platform makes it simple to implement cloud-based apps, or to even integrate systems into your webpage to allow "self-serve" shipping options.

3 - Supply Chain Optimization

A TMS doesn't just keep track of what's shipping out.  It also oversees everything coming in.  You'll be able to keep a handle on your entire company-wide shipping expenditures, while significantly reducing any paperwork or bureaucratic hurdles in the way of speedy service.  In many cases, even everyday shipments like orders of office pens can be optimized to save money over months and years.

 

II. Challenges

1  - Choosing The Right Platform

Most (but not all) TMS systems on the market are developed for niche markets such as, for example, a TMS specifically for restaurateurs, which includes spoilage and sell-by dates in its calculations.  Further, none of the "general purpose" TMS platforms are truly fire-and-forget solutions.  They will require customization.

This creates a significant hurdle in research and communication, both internally and with your TMS vendor.

2 - User Support

New computer systems require training your staff on them.  Do you have the facilities and teachers needed for implementing a new system AND providing user support for it?  If not, the project could create more problems through ongoing misuse than you'd be solving by implementing it.

3 - Cost

Let’s be frank - this is not a cheap option.  You will be buying significant back-end server hardware, hiring programmers and/or IT techs, and paying four or five figures to license the software.  This is an investment that will require years to show a positive ROI.

 

The Alternative...?

Hire a great Third Party Logistics firm!  They have all the technology and systems experience to implement AND manage a great TMS, and at prices far lower than any do-it-yourself method.

Interested?  Contact ReTrans Freight for a free consultation