TMS systems take transport management to the next level

This piece is an article that appeared in the June issue of ITwiz magazine.

TMS software handles the planning and execution of the physical flow of goods within the supply chain. And whilst it is mainly associated with transport management, it has a much wider range of applications. Depending on the level of complexity, individual TMS modules can cover all aspects of transport management. From sourcing and integrating carriers, through network design, strategic planning, sourcing and procurement of goods, automated scheduling, route planning, load consolidation, documentation and performance management, right through to payment and cost settlement functions, shipment analysis and goods auditing. Not only do they provide an accurate overview of the entire process, but they also enable potential problems to be anticipated and resolved before they actually arise.

SaaS applications are replacing the on-premises model

There are many ways to deliver and implement TMS systems. These can include on-premises, hosted, on-demand cloud/SaaS and TMS-managed services, subject to specific eligibility criteria. However, the dominant delivery mechanism for such software on the market is the public cloud. As Gartner research indicates, almost all growth in the TMS sector currently stems from cloud-based TMS offerings. Conversely, analysts are noting a significant decline in investment in on-premises applications.

Meanwhile, the number of companies – end users of TMS – that have begun the process of migrating their TMS solutions from on-premises locations to the cloud is steadily increasing. This is achieved either by changing providers or by switching platforms within the same provider. Established TMS providers are also continuing to develop cloud-based products in an effort to defend their market share against rapidly expanding public cloud providers. Meanwhile, cloud-native providers are introducing new technologies to deliver real-time transport visibility and mobility, thereby increasing the added value of TMS and SaaS.

According to Gartner’s forecasts, the aforementioned US$2.11 billion spent on TMS applications by 2024 is set to account for 28.1 per cent of the US$7.28 billion allocated to supply chain execution software (SCE). This growth will be driven precisely by the replacement of on-premises software with SaaS applications. It is estimated that the share of SaaS solutions will rise from 37 per cent in 2019 to over 60 per cent in 2024.

What should you bear in mind when implementing a TMS?

As experts point out, the decision-making process for purchasing a TMS is usually time-consuming and can be quite challenging at first. This is because, before implementing such a system, suppliers need as much information as possible regarding transport planning. Generally speaking, the more detailed the consultation, the better the implementation. This enables suppliers to tailor the system to the customer’s current practices, whilst simultaneously creating new, detailed workflows and simpler processes, thereby giving the company greater
flexibility, time savings and easy control over all transport processes.

Implementing a TMS involves not only making the necessary investments and rolling out a suitable solution tailored to the specific needs of a particular business, but also dedicating time to the team that will be using the system. After all, the system’s efficiency and effectiveness depend largely on operational staff, such as freight forwarders, dispatchers and accounts specialists. That is why it is worth focusing on their needs right from the initial stage of selecting the system and jointly testing the software’s functionality to see whether it meets their actual needs – whether it is user-friendly, intuitive to use, and whether it will allow for growth as further needs arise, as practitioners emphasise. It should also be borne in mind that, paradoxically, too many unnecessary software features may not help, and may even paralyse the organisation’s operations. Another important issue is the ability to integrate the TMS with external systems. For companies in the TSL sector, it is particularly important for such software to interoperate, for example, with telematics systems, transport freight exchanges, or external financial, accounting and HR programmes. The issue of data security, including appropriate protection and archiving, is also of paramount importance. For all these reasons, the TMS implementation process also requires strong commitment from the company’s owners or management – after all, this is a system that will be crucial to the organisation in the future.

Benefits of implementing a TMS

As mentioned earlier, TMS software provides an overview of the entire supply chain, simplifies the whole ecosystem and records every stage within it as part of the same compact and intuitive system. In the past, companies used many different software packages to manage their transport. Not only did this complicate the functionality and reliability of the entire ecosystem, but it also made it difficult to collect and analyse data – as each platform used a different reporting style, which meant that identifying available options was very difficult and unreliable.

TMS solutions, on the other hand, take all transport-related tasks to the next level. They enable scalability and help minimise duplication, misunderstandings and errors made by staff – as all documentation and communication processes are automated, which translates into efficient operations. Thanks to real-time access to information, companies have sufficient time to react, regardless of the mode of transport used. Furthermore, these systems also take into account all regulatory requirements, as well as changes to restrictions and difficulties that such regulations may cause.

EXPERT COMMENT – Paweł Garbacz, Director of Development at Omecon

Supply chain information exchange platform

Companies must now meet ever-increasing customer demands regarding information, flexibility in fulfilment, as well as additional services, a direct consequence of which is the decision to establish their own distribution networks. Modern TMS-class systems – such as our &UP® solution, for example – are becoming information exchange platforms for all participants in the process.

Thanks to mobile solutions for drivers, we gain full control over order fulfilment, whilst customers receive real-time updates on the status of their orders. Ensuring integration with ERP, WMS and financial systems helps to reduce traditional paper-based documentation. It is also worth noting that shipments using electronic CMR consignment notes have passed ITD tests, whilst blockchain technology is increasingly being used in transport processes. Optimising load planning and distribution routes enables orders to be fulfilled on time and delivers real cost savings, which in turn leads to increased customer satisfaction. Based on implementations carried out to date and those currently underway, we estimate that the &UP® logistics platform enables order fulfilment costs to be reduced by up to 20 per cent.

When discussing the system’s operational efficiency, it is impossible not to mention cloud technology, which is capable of ensuring a high level of service (SLA) by utilising multiple data centres across various locations and providing round-the-clock support. Another major advantage is the ability to manage computing power, for example by increasing it during the morning’s automatic route planning or periodically during the settlement process. The optimal architecture of our solutions also guarantees numerous benefits. When designing and developing our systems, we rely on a microservices architecture within container clusters. This approach ensures that the solution can be conveniently tailored to the client’s needs, as well as facilitating the expansion of functionality to include further services that may form part of the client’s other solutions.