What are Transport Management Systems?
Transport Management Systems (TMS) are Enterprise Resource Planning (ERP) systems that transport companies, or transport divisions within companies, use to help administrate and execute transport activities. A basic planning functionality is at the center of every TMS, but most require an add-on or another related system in order to enable advanced planning and execution.
Why add optimization to Transport Management Systems?
A well designed, conventional Transport Management System (TMS) is effective in helping to improve fleet performance and reduce transport costs. Optimization, however, takes as its starting point a broader view of the TMS, considering the wider chain of processes and dependencies. Optimization empowers an operator to create greater efficiencies – such as freeing up time, resources, etc. - by introducing even small changes. Some examples of capabilities that can be gained by embedding optimization techniques in a TMS as advanced planning and execution solutions are:
- Increasing load consolidation from LTL to FTL
- Assigning loads to the right resources
- Automatically selecting the lowest rate carrier and transport mode
- Reducing empty miles
- Improving performance in route compliance by taking into account more restrictions and the dependencies between orders and/or resources
How to add optimization to Transport Management Systems?
Route optimization components are available in the cloud. These can be used from TMS’s in the form of an add-on to create a plan, and to re-optimize the plan during execution. Advanced Routing and Dispatch solutions are also available in the cloud. These offer a seamless, real-time integration with TMSs, adding all optimization capabilities during planning and execution. This implies that the TMS is mainly used for order and contract booking and for invoicing.
What are the results of adding optimization to Transport Management Systems?
Based on results typical for the industry, an operator can expect to save between 5-10% on transport costs, cut planning and dispatch functions by about 50%, and improve Service Level Agreement performance by between 25-50% (Source: ORTEC Benchmarks 2016).
Why contact ORTEC?
ORTEC has been helping businesses across industries get the maximum value from their planning processes for 35 years. Optimization is what we do, and it’s why we’re a world leader in applied optimization solutions. Our advanced transport planning and execution capabilities are designed for seamless integration into a large number of TMSs, as well as into mobile devices and GPS-systems. For transport companies and logistic service providers, adding ORTEC’s advanced capabilities to your TMS results in considerable operational improvements in your ERP-system, without the need to invest or to start a complex ICT replacement project.