As e-commerce flourishes amidst the continuing spread of COVID-19 mutations, organizations worldwide are leveraging technologies for recovery and renewal. Responding to consumer demands can be affected by lockdown orders, leading to supply chain disruptions. Such an occurrence has prompted big businesses, particularly producers of consumer packaged goods, including food and beverages, to use their own transportation management systems. .
Integrating an automated system of managing freight movements for procured goods and for the deployment of their own transportation assets can help prevent demand destruction that could further change customer behavior. Consider the fact that most freight forwarders and carriers are also struggling to maintain resiliency against the challenges they face, particularly amidst worsening weather conditions.
In having their own transportation management system, companies can be more agile in moving out of the COVID-19 crisis and toward a more resilient new normal.
Overview of Transportation Management System or TMS
TMS comprises software and applications that help major businesses move goods from their origin to specific destinations with utmost efficiency, reliability and cost-effectively. Transportation management systems provide two kinds of business solutions:
TMS for Strategic Planning and Execution
This transportation management solution focuses on strategic planning for freight movements by way of a commissioned carrier. The execution of transport plan involves a complete process, starting from point of procurement, to creation of a route guide, to optimizing the execution of the processes.
Optimizations include the integration of electronic communication devices and applications with the carriers in order to increase their visibility. Increased visibility allows for real time freight management, including audit and performance assessments of the freight carriers.
This type of transportation management solution involves planning of freight movement and execution processes in the delivery of goods using company-owned transportation assets.
The solutions and application that aid in the complete delivery processes would include routing optimization tools, applications for increasing visibility and communication with the drivers of the transport vehicles.
Visibility and constant communication also allow real time management in the movement of goods, and of asset assessment and monitoring. The best Fleet Management transportation management tools is one that enables overall performance management for ensuring not only cost efficiency but also to make certain that the quality of the goods being delivered is maintained regardless of the distance traveled.
Recent market reports show that the demand for TMS has expanded, since the impact of Covid-19 affected not only the freight and trucking industries. Although the extent of the pandemic impact is at a lesser degree on certain industries, suppliers of consumer packaged goods, as well as manufacturers of food & beverages have seen an increased need for a Transportation Management System, especially if involving perishable goods.
TMS and Return on Investment
According to Forbes, transportation management systems have been proven as capable of offering strong returns on investment (ROI). After all, one of the the primary reasons why companies procure TMS is to achieve savings on freight costs.
Freight savings can be achieved through the following:
- Efficiency of network and simulation models;
- Availability of options for lower costs
- Optimized load consolidation
- Multi-stop route optimization.
As the elements associated with freight movement continue to influence increases in freight costs, the emerging trend among business organizations is to integrate TMS solutions as means to mitigate rising freight costs, while keeping both offline and online customers satisfied.