What is a TMS system and which one will suit your business?

What is a TMS system and which one will suit your business?

There are several ways to organize logistics in a company. Someone use electronic data sheets as in the old days, others use ERP-systems. The problem is that even the functionality of such systems is often not enough to solve all the tasks of cargo transportation.

In such a situation, the optimal solution is to integrate the ERP system with the TMS-transportation management system. What are TMS-systems and what to pay attention to in order to choose the right one for your tasks – this article will talk about.

Why do you require and what can TMS systems do?

TMS-systems are an extremely important element of freight management. It is a set of tools that help participants of cargo transportation to automate logistics and significantly reduce the time and money spent on their realization.

Functional TMS allows the company:

  • to optimize many logistics processes. Thus, some TMS can choose a carrier on their own, taking into account the type of cargo, previous cooperation experience, and the auction scheme of work, reduces the cost of transportation;
  • to keep records of salaries managers and drivers;
  • to keep records of the cost part in the flight or car repair;
  • keep track of the location of the cargo. In addition to the classic GPS tracking, tracking through the driver’s application has already become almost obligatory and, by the way, the least expensive. This makes it possible to transmit all data on the route without unnecessary calls;
  • to build optimal routes if there are multiple delivery addresses;
  • synchronize and consolidate all information in one place. If a company has to monitor 10 or more delivery points at a time, sending 10 shipments each week, it needs to generate 100 packets of documentation. TMS generates automatic reports, and all necessary documents. Also the system constantly analyzes the information entered into it and reveals errors, any discrepancies.

What do you need to choose the right TMS system?

Choosing a large-scale, key for business software solution is not an easy task. It as the graphic editor for the designer or 1C for the accountant: some competitors leading, everyone allocates for itself their advantages and lacks independently. But it is still more difficult to integrate several systems.

It is difficult at once to estimate financial expenses as it is not clear, what result will be in practice. It is no less difficult to estimate time expenses – the terms, which the developer names. Misunderstandings begin to appear from here.

Representatives of a transport company are often far from the IT sphere. They formulate requirements to software decisions in their words. But the developer is far not always immersed in transport business and understands them in own way. That misunderstandings have not led to that software will not help to solve problems for which it was developed:

  • the programmer makes a research to see if his solution is suitable for the needs of the trucker, and then calculates the cost and development time;
  • the cargo carrier sets the IT department (own or outsourced) the task to formulate a detailed and understandable task for the software developer.

These ways will help to solve a misunderstanding problem between the customer and the executor, but demand rather much time and means.

What criteria should be considered when you choose a TMS system?

Today, many TMS systems are used in logistics. These are both global giants (e.g. Oracle, SAP) and start-ups. The number of new products is growing rapidly, so we recommend to make a choice not by brand awareness, but depending on the functionality of the system, which should fully or with a reserve in the future to cover the needs of the company.

5 key criteria worth paying attention to:

1.  Cloud services for data storage
Current high-tech TMS systems use clouds. This provides not only reliable data storage, but also allows for fast data exchange and access to them for all participants of the transportation. At the same time, the data are quickly synchronized, and all the work on transportation (from development of the route to delivery of cargo to the right point) becomes transparent.

Important! Before choosing TMS, make sure that its servers are located exclusively in your country – this is an important requirement of current legislation. Otherwise, you may get into trouble the first time you check the regulatory authorities.

2. Flexibility and scalability
A TMS system cannot be a “boxed” solution that is fully ready for implementation and launch. Each carrier has its own specifics in business, so the same solution will not suit two companies that seem to be doing the same thing. And one TMS system can work on them absolutely differently.

When choosing TMS, be sure to check with the programmer whether he is ready to configure or change it for your specific needs.

One more important aspect is that the developer is ready to constantly change his software after implementation, because some of them offer only implementation and minimal modifications at the initial stage. Then they leave the company and keep the source code.

It is important that your developer is ready to support you even when your tasks change, the business is scaled up, otherwise you will not be able to change the functionality of the system, you will have to buy a new one.

3.  Standard functionality
This paragraph continues the previous one. It is important to pay attention to the initial functionality of the system that the developers are willing to offer. If it is initially very limited – not the fact that they will be able to radically change it, and that all the functions in this case work fully, for example, with a task such as the introduction of a new module, the developer may not cope just because he did not have to face such a task, because before it was without it all customers.

Let us explain by an example: one of the key options of modern TMS is routing. But far not all developers offer it “from a box”, and instead install simple tracking of movement of cargo. However, such a solution does not allow to build effective logistics routes, does not allow to rebuild them because of some unforeseen problems. Also without routing it is impossible to calculate and optimize fuel consumption.

4. Employee competence
It is very important that TMS-system programmers understand not only how their product works, but also how the customer’s business processes function. Otherwise, misunderstanding may cost the client a lot.

Let’s say that the logistics department needs statistics, it collects information about all brands, keeps accounts, acts and the like. If the developer of TMS has not understood this requirement of the client and has offered him system without possibility of such detail – all parties in loss, even if such function will be finished later – it is at least loss of time for the client, but more often – and means too.

5. Finalization time and implementation time
Integration of a TMS system is no longer such a long and complex process. At the same time, any company at first glance seems that the earlier a new functional system starts working, the better and more profitable. But here it is more important to adjust all processes, instead of making half of automation, then the result will be the same.

If the developer you choose takes 1-2 weeks or even less to set up and implement the system – you are likely to get a solution “out of the box”, not customized for the individual tasks of your business. Such a developer will not be immersed in the specifics of your company.

The opposite situation too is not very good, if integration will take a year, in this time business can essentially lose indicators, and the developer naming such terms or it is too loaded and will not give enough attention to your company, or it does not know (for the first time faces), how to realise your problems and will deal with it on a course. It is optimal if the programmer can do it in 4-5 weeks.

So which TMS is worth choosing after all?

TMS, which use “clouds” not so much. One of the popular TMS is YaCu TMS4.0. It is a complex solution for automation of all logistic processes in the company, which suits all participants of the cargo transportation market. Unlike “box” systems, the YaCu is finely tuned to the tasks and features of the company. All basic and non- basic options are included, from tracking to cloud data exchange.

The system is based on the operation of an interconnected mobile application and personal cabinet. Allows you to involve external carriers and to form and track their logistics. YaCu is a multifunctional platform, the possibilities of which are not limited for the field of cargo transportation now, but the service is constantly evolving.