How Transportation Management Software Promotes Intelligent Execution

There is a subset of supply chain management called “transportation management system” that refers specifically to transportation operations and is a component within an enterprise resource planning system. This area has evolved quite a bit in recent years thanks to technological advancements, and now transportation management software has made it possible for companies to add context to a shipper’s transportation data. This software oversees four key processes of transportation management: planning and decision making, transportation execution, transportation follow-up, and measurement. Modern transportation management software has the ability to use context to determine whether:

  • an incorrect invoice charge was caused by a carrier re-weighing their freight or by re-classifying their freight
  • a shipment arrived late due to inclement weather or due to the consignee not being available to sign for the delivery

These are just two examples of the types of judgments that logistics shipping companies can make with the help of transportation management software. Here are a few more ways that this technology can be used today:

Exception Management Process

This software can be configured to periodically alert an individual when lanes, carriers, or facilities do not meet specified targets. This is especially helpful because it allows managers to instantly know when the amount of business their company is doing has changed. Before transportation management software, management would have had to wait up to a year before being made aware that targets were not being met. The sooner that management is aware of a problem, the sooner it can begin to look for a solution.

Freight Execution

Today, a single transportation management software product can be used for shipments in all modes, whereas before additional applications had to be added for special cases like small parcels. Additional documents, which are needed for shipments like pallet labels or hazardous materials documentation, can now be printed on-site. In the past, this documentation needed to be printed ahead of time.

Improved Communication

Logistics shipping companiescan provide vendors with a tool that allows them to pre-load shipping business’ rules, carriers, and purchase orders. Using this pre-loaded information, vendors can send shipments to the shipper’s carriers without having to wait for the carrier to provide this information.

Dashboards

All of the aforementioned data can be pulled into a centralized location, or dashboard, that shippers can use to monitor the company’s freight activity in real-time. The result is an effective measurement of the Freight Payment and Pre-Audit so that it matches the data that is continuously coming in. Put more simply, the ability to monitor this data in real-time means that shipper is finally able to determine what is happening in their supply chain. Only by staying up-to-date on trends and data will a shipper be able to make the most intelligent decisions.

When logistics shipping companies decide that they are ready to acquire transportation management software, they have three ways to do so. They can use a traditional purchased license (on-premise licensing,) a remote or cloud-based solution (hosted licensing,) or a blend of these two options (on-premise hosted licensing.) Shippers looking to determine which option is best for their organization should reach out to a transportation management software provider about their preferred opinion.

Logistics Management – Handling Your Business Can Be Complicated

Managing logistics is one of the main ways that a company can learn to get ahead. Whether you have a trucking company or some other type of transportation company, there are choices for you when it comes to how to handle your logistics management. One of the things you can do is get a consulting or managing company to help you with your needs. If you do that, you’ll have professionals on your side and they can often give you better suggestions as to how you can streamline your company and make it more efficient.

Logistics management often involves the use of computers, too, because computer programs that handle information much faster and more accurately than human beings are becoming increasingly popular in the trucking industry. You can use a program, a company, or a combination of the two in order to get the information you need and keep your business moving in the right direction. Companies that focus on logistics are often better at staying competitive, because they’re able to provide better service for their customers. Their deliveries are more reliable than those of other companies, and they have the ability to track those deliveries more easily.

When you decide to get someone to help you with logistics management, be sure that you choose the right company. There are plenty of consulting and managing companies, but they don’t always provide the same services. In addition, you’ll want to get a company that’s been in business for some time and that’s used to working with the trucking and transportation industry. If you find a company like that, you can get what you need with as little hassle as possible. That can give you peace of mind and also help you feel like you’re not overpaying for what you’re receiving.

Handling logistics alone can be hard, and it’s often stressful. By letting a logistics management company help you, you’ll have time to focus on other aspects of the business. That can help you keep up with your competition and can also give you the opportunity to look at expanding your business through mergers or acquisitions. When it comes down to making choices for your business, the best choices are the ones that will keep you competitive and allow you to move in the right direction. When you have professionals helping you, there is less trial and error in your business choices.

Advantages of Logistics Software Over Third Party Logistics

For manufacturers who ship a steady supply of cargo, the cost of shipping can rival the cost of payroll. Consequently, reducing shipping costs is a full-time task for most shipping managers. Today, most shippers manage the logistical side of shipping (the part of the shipping process where costs can be cut) with one of the following resources:

  • In-house Logistics – A model of shipping logistics in which the shipping process is managed by a shipper’s own staff of experts.

  • Third Party Logistics (3PL) – A model of shipping logistics in which a third party manages one or more aspects of the shipping process.

  • Logistics software – A web-based or in-house program that allows shippers to choose its own shipping arrangements and perform important tasks such as a freight audit.

Most shippers prefer the first option, but paying a team of experts can be unaffordable. Left to choose between the second and third options, many shippers choose the latter based on the following considerations:

Cost

The cost of 3PL is based on the services a shipper receives. When a shipper receives only a few services through a standard 3PL provider or a service developer, 3PL can be affordable. However, when a shipper uses the comprehensive services of a customer adapter or customer developer, the cost of 3PL can be significant. A software-based resource can facilitate comprehensive shipping management for a fraction of the cost of high-level 3PL services.

Shipping Options

Some 3PL providers make carries arrangements using a narrow range of carrier options, such as those found in an electronic posting system. Conversely, logistics software allows shippers to choose from a limitless range of shipping options based on the appropriate shipping model (e.g. less than load or truckload), and perform a freight audit to monitor shipping costs.

Control

Shippers who use 3PL commonly complain that the shipping process feels too removed-a complaint that often results from the failure of a 3PL provider to provide ongoing, in-depth communication to the customer. Using a software-based resource eliminates this issue by placing the shipper in full control of the shipping process.

Permanence

When shippers use 3PL, they often go through multiple 3PL providers as their shipping process evolves, beginning with a standard 3PL provider and eventually using the services of a customer adapter or customer developer. In addition to being more expensive than using a software-based resource, switching from one 3PL provider to another requires forming new business contracts, continuously delegating more shipping tasks to a third party, and implementing new standards for quality control.

Most shippers wish to implement a permanent logistical solution as soon as possible, and implementing a software-based solution is the best way to do it. After the solution is implemented, it options can be changed as the shipping process changes, providing a seamless transition that does not require the customer to look for a new service provider.

Conclusion

For many shippers, logistics software is the most cost effective logistical resource. In addition to allowing shippers to choose from the broadest range of carrier options, it allows them to perform important tasks (e.g. freight audit) without the assistance of a third party. To learn more about the benefits of software-based logistics, contact a provider of transportation software.