If you already have warehouse management systems, then you recognize the competitive advantages that come from integrating information technology into your warehouse facilities. However, warehouses are only a part of your distribution logistics. Integrating your transportation into your management system can improve both your distribution chain and customers’ experience. Here are five benefits of a transportation management system (TMS):
Automate Customer Communication
Before the Internet, you may recall that most customer communications took place via phone or fax. During the Internet Age, however, customer communications can occur through email, web portal, or online chat. The scope of the information provided to customers varies from business to business. For example, despite the importance of online sales to most businesses, only about one-third of them have the technology to show their available inventory online to purchasers.
When a transportation management system is integrated into your warehouse management, you can alert customers when orders are shipped and provide shipping information to track their order. Many businesses, such as manufacturers, need reliable inputs. Knowing when their inputs will arrive is essential to work on schedule. Your customers will thank you when your transportation management system provides them with prompt and accurate data.
Help Make Shipping Decisions
One of the most complex problems in mathematics is the “traveling salesman” problem. In the traveling salesman problem, the challenge is to determine the most efficient way for a salesman to make all of his sales calls. This problem presents the same difficulties as delivering orders to multiple different locations.
This mathematical problem is so difficult that it cannot be solved without a computer. A transportation management system, however, can plan routes to minimize delivery time and maximize delivery efficiency. Just as importantly, TMS uses optimization algorithms to help you and your customers identify the most cost-effective shipping options.
As part of the shipment planning and optimization algorithms, TMS can identify shipments that can be grouped together. By building loads containing the entire order, carriers can more efficiently deliver orders to nearby locations. This saves you, your customer, and the carrier money since carriers do not need to make multiple deliveries to complete an order. Customers will appreciate the savings in shipping costs that transportation management systems can provide.
Moreover, since 2016, the carbon emissions from cars and trucks have exceeded the carbon emissions from electrical power generation in the United States. Freight trucking only makes up about 25% of America’s road traffic. Using TMS to build loads and plan routes reduces trucking’s impact on the environment even more by eliminating the need to make multiple trips over the same routes.
Employees, no matter how well trained, can make errors. The accuracy of your employees in picking orders, loading and delivering orders, and processing invoices can be affected by fatigue, distractions, and inexperience. An automated system for managing transportation can reduce your business’s reliance on employees. This can increase both the accuracy and speed by which orders go from your warehouse to your customers.
Your business will benefit from increased accuracy with reduced costs and improved efficiency. Specifically, your business will need to pay for fewer returns and need to spend less time re-processing incorrect orders.
Similarly, your customers will benefit from increased accuracy. Fewer errors in shipping orders will mean less downtime waiting for the correct order and less employee time wasted preparing return shipments.
Whether orders are processed correctly or not, carriers still need to be paid. Your business’s accounting department must track all those costs. Providing a tool like integrated TMS will help it record those costs in an accurate and timely manner. It is universally accepted that invoices that reach customers quickly and error-free are more likely to be paid on time. The reason for this is entirely logical: after all, fewer billing disputes will lead to higher customer satisfaction which, in turn, leads to prompt payment.
Transportation management systems can provide substantial benefits to your customers. Better communication, faster and more accurate shipments, and fewer billing disputes will keep your customers happy. Keeping customers happy will directly benefit your business because happy customers are a source of repeat business.
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