Types of TMS Systems and How They Improve the Logistics Industry

Logistics plays a fundamental role in the operation, support and growth of a company. In this sense, new technologies applied to logistics are essential to improve the different points of operations, in order to achieve greater productivity and a reduction in costs and errors in the supply chain. On this occasion, we are going to talk particularly about the TMS system and the importance it has in logistics.

What is a TMS system in logistics?

A TMS (or Transport Management System) is a transport management software, a logistics system that allows to automate a large part of the logistics process, thus increasing the efficiency of processes and achieving substantial improvements in services. They are systems that collect and manage the information of the different logistic activities of the companies, making it available to them. This information can then be supplied to transport companies, suppliers or customers, among others.

We can say that TMS systems in logistics are part of the transportation fleet management platforms and have had a significant growth over the last few years. According to the study "2021 Fleet Technology Trends Report", these systems had a 64% adherence rate for 2019, increasing to 72% in 2020. In addition, it is estimated that 32% of these companies managed to obtain a higher return with this type of systems, obtaining a return on initial investment in periods of no more than 6 months.

Another way of defining TMS systems is as an intelligent and systematized management of the information that comes from the logistics activities that occur in companies. Thus, it can be said that the raw material of these systems lies fundamentally in the dynamics of the distribution and delivery of products and goods. What these platforms seek to do is to structure the management of the fleet of cargo vehicles for their optimization.

What are the functions of a TMS system?

he functions that a TMS system can have in logistics today are diverse. However, it can be said that they are oriented to substantially improve the process as a whole. With this objective in mind, we can say that the main functions of a TMS system are:

Real-time information

One of the main functions of the TMS system has to do with the possibility of offering updated information in real time on each of the activities linked to the company's logistics process.

Synchronization of logistics phases

When this information is available, it is possible to synchronize the different phases of the logistics process. This leads to a more agile development in all the phases.

Process optimization

Finally, another of the main functions of the TMS system in logistics has to do with being able to synchronize the available information in order to optimize the logistics process as a whole. This ultimately leads to cost savings, which has an impact on the quality of the service offered to customers and, therefore, on the company's bottom line.

Types of TMS

Now that we have seen what TMS systems in logistics consist of and the functions they perform, let's talk about the types of TMS. These are mainly divided into "cloud" and "on premise" software. In the past, TMS platforms required users to have a license installed, which gave them control over their operation.

With the advent of cloud technology, the situation of the TMS system has changed substantially, no longer depending on the company's servers. Moreover, nowadays, there is no bandwidth limitation and these systems are automatically updated due to the advantage of being stored in the cloud.

On the other hand, the TMS "cloud" is characterized by having the ability to connect with order management systems, including geolocation maps, documentation and data uploads, among others.

Aliernet's TMS transport management system

Aliernet's TMS transport management system is characterized by reducing the costs associated with transport agencies. In addition, it allows better planning of the entire process and better negotiation of rates. It is a tool that allows to anticipate possible incidences and to incorporate improvements continuously in the processes, achieving that the company can obtain a faster ROI.

Understanding the importance of the TMS system in logistics, Aliernet has a module specifically developed to provide this functionality. At the same time, it is an alternative that has no extra cost, because it is integrated as standard in the base package of Alier SGA.