5 reasons to invest in a transportation management system


transportaionmanagementlightwellAs supply chains grow larger and customer fulfillment expectations grow more stringent, enterprises need comprehensive solutions for supply chain clarity, consistency and cost-effectiveness. Transportation management systems help companies better control supply chain sprawl by eliminating excess costs while ramping up service quality. The IBM Sterling Transportation Management System is a software platform dedicated to enhancing key supply chain processes through the optimization of transportation logistics, planning and spending. Organizations can leverage this solution to build a better shipping network and make smarter operational decisions.

Transportation management systems are part of a more analytics-based approach to logistical decision-making, and a recent report by RnRMarketResearch found that supply chain complexity is stimulating investment, as organizations seek a sleeker, smarter approach to their transportation strategies.

"Changing travel demand, hyper-urbanization, and globalization are the important drivers for this market. Intelligent infrastructure has given rise to the smart vehicles; and smart vehicles on smart roads represents better infrastructure, better communication facility, less congestion, and better safety," the report stated.

Here are five benefits of transportation management systems:

  1. Automate key shipping processes: Today's supply chains encapsulate hundreds, if not thousands, of moving parts, making manual oversight next to impossible. Key processes such as dock scheduling and shipment tracking don't need to be carried out on an ad hoc basis, even with the variables - weather, timing, etc. - that can affect shipment movements. By automating shipment tendering, for example, organizations can access real-time data about shipments that can be automatically transferred into tracking and scheduling decisions.
  2. Improve order management: Order management is inextricably linked to transportation decisions, which mutually affect each other as changes marketing, financial and product demand mandate alterations to the supply chain system. Both order management systems and the IBM Sterling Transportation Management System offer centralized repositories for critical product information, so operatives can gain more granular visibility into inventory availability and product distribution. This can ensure that product supplies are provisioned more effectively and helps cut costs.
  3. Reduce logistics costs: As The Register contributor Robin Birtstone noted, consolidation is a key growth strategy for logistics, but many companies do not focus on back-end simplification as much as they can - and curb their profitability as a result. Transportation management systems can help companies pare down their shipping costs, especially by creating stronger bonds with other vendors and carriers. Organizations can build their relationships with these stakeholders by understanding the challenges that can drive up costs and collaborating on ways to reduce them. 
  4. Mitigate environmental factor impact: Transportation plans must contend with environmental affects, particularly with far-flung stakeholders at sea or in the air. While companies cannot prevent natural disasters and other weather factors from making an impact, they can leverage transportation management systems to reduce the severity of any ill effects. For example, Seatrade Global contributor Charlie Brett wrote that one way to reduce accidents and other incidents in the maritime industry is through better ship-to-share communication. Rather than forcing shipping agents to cede control to land-based operatives, a more accountable, analytical system would encourage collaboration and give maritime administrators more robust decision-making support. Transportation management systems can be used to help build continuity plans, recover from unplanned impact and avoid a dramatic reduction in ROI. 
  5. Make smarter payment agreements: Orchestrating payments and building smart payment plans across the supply chain can be a significant source of stress, backlog and innovation-killing slowness. With the IBM Sterling Transportation Management System, enterprises can bring clarity to both the planning and execution components of their payment cycles. With more data at their disposal, enterprises can craft agreements with more explicit conditions for accuracy in inventory and invoices. They can also enhance freight settlement processes to truncate payment cycles and limit the potential of confusion or a lack of clarity from prolonging negotiations. This effort, in turn, cuts down on administrative costs. Furthermore, the automation and accountability baked into the transportation management system can also be applied toward compliance and risk analysis, lowering the need to divert resources to these two cost centers.

Transportation management systems are critical to generating a better return on investment for the entire supply chain. A company can deploy the IBM Sterling solution and quickly reap the efficiency, financial and customer fulfillment benefits.

If you liked this article, check out other transportation management articles from Lightwell:

How Order Management can Improve LTL Processes

Supply Chain Management: Out to Sea

Supply Chain Management: Dealing with Long-term Bad Weather

Learn more about optimizing your supply chain and transportation management for the future: