With shipping costs on the rise, many companies are looking for every way possible to make up the costs. Hormel’s Chief Executive James Snee explains, “We’re thinking about minimizing miles, maximizing weights, how many days a week do you need delivery.” Luckily for Snee, that’s exactly what TMS software was built to do. These system requirements help manage and streamline your logistics, allowing you to save time and money. With our help, you’ll get to skip tedious transport management system documentation and wade right into which requirements your business needs to succeed.
This guide will:
- Help you get started with some probing questions to ask yourself
- Discuss the top TMS requirements to look out for
- Advise you on how to find and integrate the right TMS system
Beginning the search for a new TMS system is no small task, but we’re here to help guide you through the process. Before we take a leap into some of the top transportation management system requirements, let’s take a look at some questions that can help start you on the right path.
Ask Yourself Some Questions
As tempting as it may be to skip all the transportation management system documentation and dive into buying, you need a solid foundation first. By asking yourself, your team members and your stakeholders some of these questions you’ll go into the hunt for your perfect TMS system prepared:
How large is your business?
Nothing wastes time and resources like a failed system implementation. Oftentimes, businesses will look at the most expensive system and assume that the price makes it the best — nothing could be further from the truth. Some of the more expensive systems are meant for enterprise-level businesses with a large workforce.
Adopting a needlessly complex system will slow down your processes, confuse team members, damage customer relationships and cost you heavily to replace. Instead of looking for the most decimal places, take a look at your business and go for vendors that serve similarly sized companies.
Smaller businesses may lack the manpower to support implementing systems with certain levels of complexity. Ensure that there are enough people ready and willing to work with and integrate a new system. Depending on the deployment strategy, you may also need an in-house IT team to keep your systems running.
What modes of transportation do you rely on?
This may seem like an obvious thing to consider, but not all solutions handle every transportation modality. You’ll want to ensure that your system provides all the process support you need to successfully distribute and deliver.
Some may offer support for multi-modal transportation, but you’ll want to ensure that they include the features you’ve come to rely on to properly function.
What does the new system need to accomplish?
Purchasing a system simply to have one isn’t going to get you anywhere. Laying out a concrete list of pain points that a transportation management system can solve can help point you in the right direction. If you’re looking for areas a new system can improve, here are some things a TMS can do for your business:
- Increase Visibility: If you’re having trouble identifying what ails your transportation processes, robust analytical and reporting tools can help root them out. Automated business intelligence features discover, analyze and display critical business data to give management the ability to make educated decisions.
- Improve Organization and Customer Relations: If you’re making late deliveries, wasting valuable time on mismatched schedules or partnering with unreliable drivers it’s time to pick up a TMS. These systems can automate scheduling with defined parameters, track deliveries in real time and help you assign the best driver for the job at hand.
- Cut Costs Across the Board: You don’t need to pour through 200 pages of transportation management system documentation to see the many ways they can save you money. A successful system can maximize shipment consolidation, automate routing for the best fuel values all while supporting freight auditing. Tracking features ensure that you see the entire journey of a product and can give your customers concrete delivery dates.
- Strengthen Financial Practices: Distributors and logistics professionals have to deal with numerous transactions every day. A successful TMS implementation streamlines and simplifies these tedious tasks while improving accounting accuracy. Instead of wasting hours on audits, users can shrink their audit times to seconds. These systems can automatically detect inconsistencies between invoices and rates while guiding the user through rectifying the situation.
- Boost Collaboration and Networking: Any TMS worth its salt will provide you with communication tools and access to networks of supplies, carriers and more. Transportation is vital at all stages of a supply chain, and without robust communication tools things can get messy. If you’re looking to attract new business partners and improve overall communication between your teams look for a TMS that properly supports these processes.
While these may seem obvious, it’s important to consider everything you need to accomplish. When you settle on a system you want to guarantee that you are paying for functionality that you actually need.
Top TMS Requirements
To help you get started, we’ve created a list of transport management system requirements you can use to decide what you’ll need from transportation software.
Automatic Order Processing
Modern systems utilize electronic data interchange (EDI) to standardize communication. EDI replaces manual means of communication, such as mail, to speed up the exchange of information. EDI is useful in order processing, eliminating the need for manual order entry. This reduces the time involved with data entry, but it also reduces error. When using EDI, your system can automatically pull order data from other resources to create orders automatically.
Most systems will also allow you to create orders using data that isn’t sourced from EDI. So, for instance, if your suppliers still run on very manual processes, you can still work with them without EDI. Moreover, you can choose a system that will generate confirmation notifications that can be sent to the appropriate parties.
Automated Data Entry via EDI
This feature also takes advantage of EDI to streamline communication. If you choose a system that allows users to schedule shipment pickups in advance, your program will typically use EDI to automatically communicate with carriers. Furthermore, scheduled pickup enables users to plan deliveries using what’s most profitable and efficient.
By choosing a system that enables users to access information on pickups and drop-offs, you maintain a higher level of visibility of your deliveries. This allows you to deal with arising issues early on to foster customer satisfaction.
Monitor Pickup and Drop-Off Information (Locations, Dates, Times, etc.)
Send Pickup and Drop-Off Information Automatically
Plan Trips by Efficiency
Schedule Shipments in Advance
Auto Carrier Selection
Choosing a carrier to handle your shipments can be difficult. You have to consider a multitude of factors like cost, geographic accessibility and whether or not you’ll need multiple carriers. Your needs may also be slightly different from shipment to shipment. But you probably don’t have the time to go through and choose a carrier by hand for each package. That’s where auto carrier selection comes in.
Auto carrier selection manages all your carrier options in one place. Not only does it conveniently centralize your selection process, but it also chooses the best carrier automatically. Systems do this by taking into account factors such as cost, preference, insurance coverage, equipment needed and more. These are all considered using an algorithm that determines the lowest cost option that can provide all other necessary aspects.
Automated Carrier Selection
Multimodal shipment involves a level of detail not seen in many other industries. Between the actual logistics of managing several modes of transportation and the legalities of subcarriers, it can be useful to have a TMS solution to handle it all.
If you plan on implementing multimodal shipments, make sure your transportation management software can manage all the modes you utilize. This includes road, rail, sea and air. Your system should handle the logistics of cross-border freight as well as any domestic considerations. You also may prefer a system that can handle cross-docking, which minimizes storage time and warehousing costs.
Domestic and Foreign Support
This feature facilitates shipment planning to ensure the best delivery pattern. First, shipment consolidation creates groups of items to be transported together by pallet, container or weight, maximizing load efficiency. Many systems do this by taking into account your constraints, business rules and carrier capacity.
Some TMS solutions incorporate distribution strategies like multi-stop, multi-pickup, pooling and direct. These are all used in conjunction to reduce transportation costs and improve resource management. You can also consolidate shipments of all sizes from small parcels to high volume shipments.
Consolidation by Weight, Container and Pallet
Omnichannel revenue is one of the reasons why many companies today still utilize brick-and-mortar storefronts in a world where online retailers like Amazon reign supreme. But wherever there’s an opportunity for profit, there’s also the potential for failure. That’s why it’s important for TMS providers to supply a centralized method of dealing with disputes. Dispute management covers all claims related to cargo, such as damages and goods lost in transit.
One of the ways to manage your disputes is to integrate your financial data. This allows you to instantly audit agreed-upon rates and see the associated billing records. If you are liable for damage, you’ll want full visibility of potential revenue loss. Additionally, some systems offer dispute reporting and analytics. Reporting gives you a quick means of sharing important data, and analysis can help you understand trends.
Integrated Financial Data
Reporting and Analysis
Payment and Settlement Process
Transportation is a complex process, but understanding how well your company is performing doesn’t have to be. Most performance tracking systems manage metrics like on-time appointments, multimodal transit times and loading and unloading times. With the help of performance tracking, you can get quick insight into where you perform the best and where your team could use some work.
TMS software allows users to monitor all modes of transportation, providing better visibility into the movement of goods. You can also set deadlines, see historical performance data and receive notifications for events or delays. This helps you get ahead of issues, enabling you to resolve them before the consequences become apparent.
Loading and Unloading Time
Accurate billing is incredibly important for maintaining good relationships with your carriers. Your TMS software should support billing and the various models commonly used in transportation management, like door-to-door or cost-plus. You may also want a system that can calculate the transportation costs for both the party ordering the goods and the supplier. Certain solutions can automatically calculate carrier rates using rate databases, as well.
Ordering Party and Supplier Billing
Automatic Calculation of Carrier Rates
This feature ties largely into performance tracking, with many systems using the flow of goods as a metric of performance. If your product has stopped moving somewhere, you must find out why along with how you can get it moving again as quickly as possible.
Cargo tracking provides supply chain visibility, allowing users to track cargo by SKU numbers and various other identifiers. If you’re looking for end-to-end visibility, consider a system that can track shipments en-route, at pool locations, and that can provide delivery confirmation. Some solutions can help you track returns, as well.
SKU Number Tracking
Order Number Tracking
Customer Reference Numbers
Tracking by Date
With the supply chain becoming more and more globalized, it’s important to maintain local protocol wherever possible. Users can choose the units of measurement, currencies and languages present on labels. Localization can also come from the method of deployment you select. Hosted solutions can be easily updated with new TMS features to make localization a breeze. On the other hand, on-premise solutions give a company full control over how the software works.
Units of Measurement
To properly manage your fleet, you need a system that can dispatch your drivers, track their location and provide a means of quick communication. Most solutions enable dispatchers and drivers to communicate directly in an app. Additionally, many TMS solutions can optimize the dispatch process by choosing the best driver and mode of transportation based on skill, availability and seniority. Dispatchers can also track drivers to ensure they’re on the correct shipment route.
Driver Assignment Optimization
Reports are one of the easiest ways to understand and convey vital information. Transportation software not only provides classic reporting tools like charts and dashboards but also includes specialized maps to visualize shipping patterns.
Visual Data and Maps
Business intelligence (BI) in the context of transportation isn’t too different from standard analytics tools. However, with so many working parts involved in logistics, your software needs to be able to collect and consolidate data from multiple sources. A TMS system should also track industry-specific KPIs and predict trends using “What-If” analysis.
Additionally, transportation analysis provides the visibility to see where your company is underperforming and areas of especially high cost. You can then use this new information to plan future shipments, with the software efficiently mapping out resource usage based on historical data.
Mobility is often considered a “nice-to-have” in other realms of software, but when your entire industry is on the go, it’s a necessity. Some vendors offer designated mobile apps, with others relying on their mobile website. While some systems can be accessed from any device with internet access, others are OS-specific. Most commonly, TMS applications have been optimized to run on iOS or Android, but there are systems available that can run on Blackberry and Windows Mobile as well.
It’s also beneficial to consider the user-interface of the application on mobile devices. While design isn’t a part of TMS functional requirements (because it doesn’t affect how the software works), it does affect the adoption rates within your company. If you expect some resistance during implementation, a user-friendly interface is something to include on your TMS checklist.
Operating System Support
Mobile TMS Application
The cloud has taken the world by storm and on-premise options are no longer your best and only option. It stands to mention that businesses are moving to the cloud in droves in today’s market. However, there are still some that stand to benefit more from an on-premise solution.
Here are some differences between cloud-based and on-premise deployment strategies:
Benefits of the cloud:
- Automatic system updates
- Painless system integration
- Expanded storage options
- Lower cost of entry with subscription-based models
- Increased storage options
- Less time spent training employees to use the system
Limitations of the cloud:
- Possible security concerns, though it does reduce physical vulnerability
- Extensive modification of these systems can become expensive
- Dependency on a network connection
- Limited control of the system
The advantages of the cloud are undeniable, but on-premise solutions are still worth mentioning:
Benefits of an on-premise deployment:
- Depending on the length of software usage, an upfront on-premise payment can end up being cheaper
- The user’s business is in full control of their data
- User’s control updates since the hardware is physically located on-premise
- On-premise solutions often offer high levels of customization
Disadvantages of an on-premise deployment:
- Requires dedicated IT and security support teams to keep things running and protected
- More complex systems can have lengthy implementation times
- Excessive customization can lead to system instability
- On-premise solutions require a large up-front investment for physical hardware
Having an optimized fleet with the best routes and loading practices is one thing; keeping it running is another. Successful TMS platforms should contain all the features you need to monitor and maintain vehicles and other mechanical assets. Maintenance features help ensure equipment compliance, track costs associated with machinery, measure fuel consumption and more. Never miss out on maintenance for your vehicles again with preventive scheduling designed to head off equipment problems before they happen.
Preventative Maintenance Scheduling
Accounting Integrations with Maintenance
Now that you’re familiar with what transportation management solutions can provide, it’s time to make your own list of requirements to use during software selection. We recommend using our free requirements template. You can customize it to include only the features you need, and you can set reminders to get feedback from stakeholders. Once you’re done with that, you can start comparing systems to find a solution best-suited to your needs.
What transportation management system requirements will you utilize? Did we miss anything on our TMS software checklist? We’d love to know all your thoughts on the topic, so leave a comment down below!