Reasons Why You Should Invest in a Transportation Management System (TMS)

Reasons Why You Should Invest in a Transportation Management System (TMS)

As a business owner, it is your duty to maintain the stability of your supply chain in order to ensure that your company is steadily growing on its way to success. Most distribution companies today implement a so-called Transportation Management System or TMS to accomplish such a goal.

What is a Transportation Management System?

Transportation Management System is defined as a subset of supply chain management that involves efficient planning, execution, and optimization of the physical movement of goods. This logistics platform can basically give you information that allows you to lower your expenses on shipping, saving you a lot of time and money in the long run. But the benefits don’t end there, though.

Here are five other reasons why you should invest in a Transport Management System or TMS:

  • It improves your cash flow

Your cash flow is an important factor that keeps your business up and running. Without it, you will find yourself unable to buy inventory or even pay your employees. In fact, studies have shown that 82% of businesses today fail due to poor cash flow management. Fortunately enough, a transportation management system can help you improve your cash flow. Through centralized billing support and freight bill audit and payment features, you can save more money and keep it flowing in your business without experiencing too much difficulty. You can also standardize your payment terms for your shipments so you can easily budget and manage your cash flow since you have a more accurate picture of all those payables, receivables, and freight invoices.

  • Better warehouse management

Maximizing your warehouse duties is very important. With a transportation management system, you don’t have to spend a lot of time on managing freight tasks as you already have a thorough and optimized plan to do that. This way, you can focus more on other important aspects of the business because you have a greater overall supply chain visibility that helps you to make better decisions when dealing with any financial issues.

  • It improves customer service

Investing in a transportation management system enables you to have access to analytics and reports that show how your decisions affect customer service. These reports can make you aware of what carriers you use to ship your goods, how much their service costs, and if whether they often deliver on time or not. This way, you can improve your customer service by determining the best carrier for your business. TMS can also make you inform your customers about the current state of their order, giving them adequate tracking information and experience.

  • Better inventory management

TMS can also provide you some updates about the condition of orders and shipments in real time. By monitoring each step of the process, you can be aware of how much inventory you left and therefore, identify your future needs.

  • It can reduce invoice errors

Errors in invoices, particularly on freight payment and audit processes, can be quite common on manual procedures. TMS can negate these errors by using computerized or automated procedures.