Friday, March 26, 2010

Affordable Transportation Management Systems

Transportation Management Systems over the internet
Transportation Management Systems (TMS) over the internet allows any company, regardless of size, to obtain the benefits of a good transportation management system.

Not long ago the high cost of Transportation Management Systems meant they were used almost exclusively by large shippers and carriers. Well, things have certainly changed - especially with the advent of "software as a service" or SaaS as it is commonly called. These days, companies of all sizes can pay a relatively low subscription cost to enjoy the benefits of a powerful TMS which will help them manage their transportation strategies - whether it is by road, rail, air or ocean.

With SaaS, software is not installed on a company-domiciled computer or server, but is accessed through the Internet. Companies
log on to a web-based program that is used simultaneously by many other companies. Hundreds or even thousands of users can work with a single program. Users are plugged into an instant network of shippers, carriers, freight brokers, third party
logistics providers, suppliers, consignees, and trading partners executing millions of transactions through a single system. The system is very secure, allowing each subscriber's personnel to be in control of their own transactions and managing logistics relationships through a common network.

Subscribing to a SaaS to manage your transportation functions allows a company to handle all the operations management processes. Not only can customer orders be converted instantly into optimized shipments, but the system stores and retrieves costs for all modes and types of movements, performing carrier selection, best rate, and most efficient routing based on shipment size and destination.

Subscribers can also tender freight through electronic data interchange (EDI) and monitor performance through electronic track and trace. Bill creation, bills of lading, manifests, and carrier audits are all part of the process. Report generation provides key performance indicators, visibility to costs by lane, customer activities and allows for claims management.

Benefits to using a SaaS system provider are many. Companies enjoy a return on investment without the start up cost, capital investment, or ongoing maintenance fees. Training is minimal and user friendly. SaaS providers are constantly upgrading their technology so you get the latest and greatest, without the hassle of having to develop it yourself.

You can also choose only the modules you need. And in most cases what you choose can be integrated seamlessly into your existing business processes, providing end-to-end workflow. Ultimately, you can have total visibility of your entire transportation operations.

SaaS also gives you better handle on carrier selection, performance, and payment.

The main drawback is that because a subscriber isn't purchasing the software, it cannot be customized. However most companies that have subscriptions believe this is unnecessary and the benefits far outweigh the concern. This becomes a platform for logistics benchmarking and continuous improvement.

Cost savings touted by SaaS vendor case studies indicate a 15% to 40% transportation spend reduction. Even at the low end of that scale, a company with an annual freight bill of $500,000 would save $75,000. This money flows directly to the bottom line. Think of the number of new sales dollars that companies need to gain for this kind of net profit!

SaaS is an important logistics tool for companies looking to reduce costs and optimize service.

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