Supply chain challenges have created obstacles for manufacturing companies. Being able to streamline the logistics process helps manufacturers provide more efficient delivery for customers. According to Peerless Research Group’s Warehouse Software and Automation Survey 2022, 26% of companies are currently using a TMS. These companies have realized the many advantages that using a TMS provides for their daily activities.
What is a TMS for Manufacturing?
A Transportation Management System (TMS) is important for any company that has the responsibility for transporting a large volume of goods. The manufacturing supply chain affects every industry and is responsible for a large part of the world’s economy. It is specialized software for planning, executing, and optimizing the shipment of goods as production planning is optimized. TMS software can play a major role in the manufacturing process allowing for better decisions to maximize efficiency.
A TMS for manufacturing companies is vital for making better decisions when it comes to allocating resources, evaluating vendors, and visibility of the supply chain. Supply chain management includes planning and controlling the flow of a product through states of its lifecycle with transportation being a central part of the equation. The goal of using a TMS is to improve shipping efficiency, get real-time visibility, reduce costs, and ensure customer satisfaction.
Why A Manufacturing Company Needs a TMS
In recent years, manufacturing bottlenecks and shipping delays have occurred simultaneously with a surge in demand. It is difficult to plan production without knowing when raw materials and supplies will arrive. Being able to properly plan for capacity starts with accurate demand forecasting as to how much is needed and when it can arrive.
Failure to accurately forecast demand results in:
- Inability to meet commitments
- Revenue loss
- Materials surplus and inflated inventories
- Unsatisfied customers who may not come back
From a financial standpoint, the need for a TMS is clear. The cost of materials can be as much as half of manufacturing costs. For materials that have not arrived on time due to poor planning, this can increase this percentage even further because items have to be rushed. A TMS can give the total costs so you can determine which suppliers are costing the most for products and shipping. In most cases, the supplier handles the shipping charges and then bills you with a markup.
A TMS can also monitor the supply chain by providing reports on a vendor’s ability to deliver based on deadlines. It can report on pending or delayed items. This software analyzes both historical and real-time data to help forecast deliveries and work with suppliers who deliver on time so your orders go out on time. A TMS supports prescriptive analytics to improve on the business by giving different scenarios for better planning and forecasting.
Benefits of a TMS for Manufacturing Companies
A TMS acquires and stores the rates that carriers charge for shipping. Having current rates in one place makes comparisons of rates easier as well as delivery times. Other features of the TMS handle the workflow and paperwork of freight management, such as contracts held with carriers and load tendering which provides the details for carriers to decide whether or not to bid on a load.
Other benefits include:
- Lower distribution and warehouse costs. Through better fleet management, labor and space use, and coordination between transportation and fulfillment functions.
- Supply chain visibility. A TMS provides the ability to track and monitor the lifecycle of orders and shipments in real-time.
- Improved inventory management. Better visibility and accountability in the supply chain network allow for better control over management.
- Reduced costs. Because automating freight payment and auditing processes is costly, the use of an automated system helps to streamline the process and reduce errors.
- Improved productivity. The automation of many tasks that would require manual input such as fulfilling orders, selecting carriers, creating routes, and generating invoices can be handled by the system.
- Higher customer satisfaction. The shipping process becomes more efficient.
Transportation Management Systems are designed to scale the growth of a manufacturing company’s operation by providing automation in the shipments of both FTL and TL. The data-driven approach to decisions means that a company is making the best choices given current circumstances. This is a strategic choice that gives a manufacturing company a competitive advantage that can help differentiate it from others.
Verizeal for Transportation Management
Transportation is a complex process that requires extensive paperwork, monitoring, and regulatory compliance. Manufacturing companies face many transportation challenges, and not having one system to manage their logistics operations can be a detriment. Verizeal can make the transportation processes for manufacturing companies easy and efficient. Verizeal ensures that manufacturing decisions are managed with timeliness with real-time tracking and optimized routing so that shipments arrive on time.
