In starting a new business, it can often be difficult to keep track of the many and varied elements that constitute successful day-to-day operations. In terms of small businesses and start-ups, maintaining direct control of these elements is often unavoidable, making administrating your business’ growth all the harder.
There is one element of business operation that is perennially overlooked by start-ups, particularly in this e-commerce era, with more people trying their hand at entrepreneurship than ever. The logistics of any business centring around a tangible product are arguably the most important point of contact with consumers; how can you engage with this, and why might a TMS be the solution?
What is a TMS?
So what, exactly, is a TMS? TMS is an abbreviated term which stands for ‘Transportation Management System’; transportation management systems are software applications that fold in various logistical aspects relating to couriering and delivery – from the comparison and availability of haulage and logistics services to the internal tracking of drivers, fleet availability and order fulfilment.
TMSes, then, are multifaceted systems that offer something of a complete solution for businesses that ship products, whether on a B2B or B2C basis. These systems are designed as single-source solutions for wide-ranging management processes, whether in a modular fashion or as a pre-designed software product.
Key Functions and Features
The next key question relates to what TMSes do and how they fit the bill as software solutions to management and logistics. The main functions of a given TMS will differ from business to business and from application to application.
For example, a B2B parts supplier might have no last-mile infrastructure and might offer a range of delivery options to clients. This business would use a TMS to receive a customer’s request for same-day delivery, and scour a database of available operators that offer that service for the most affordable and reliable option.
Alternatively, a large-scale industrial manufacturer with their own logistics fleet might use a TMS to allocate jobs and journeys to drivers or fleet vehicles. Through a TMS, shipments can be more effectively and efficiently allocated to relevant journeys or networks – particularly in the case of LTL shipping services with a hub-and-spoke network.
When is a TMS Appropriate?
With this in mind, when might it be appropriate for a business to consider investing in a TMS? TMSes are powerful logistical tools, which are capable of handling hundreds upon hundreds of man-hours worth of administration – freeing up valuable time for more important and complex activities inherent to scaling, and also eliminating human error from the equation.
However, TMSes can also come at a cost, which needs to be justified by the objective organisational improvements they bring. Smaller businesses will not need a TMS, particularly in B2C scenarios where a single third-party delivery service can be chosen and used. TMSes are vital for large and scaling businesses to consider, and especially so if a business owns a fleet of more than 10 vehicles.