Exploring a Dozen Benefits of a Cloud-Based TMS

Exploring a Dozen Benefits of a Cloud-Based TMS

In a world where keeping up with the pace of demand is important, a surprising statistic sheds light on the state of the supply chain industry. According to G2, only 35% of businesses use transport management solutions (TMS) to manage their transport network. The absence of any TMS cripples the operations and opportunities of optimization resulting in chaos, low visibility, sub-optimal utilization of resources, and bad customer experience. While the solution is to use a new-age TMS, it is essential to know what kind of system we use, given the technological advancement of the current date.

Traditional systems cannot match the immediacy, ROI, and accessibility of cloud solutions. The challenges of upfront investment, upgrades, uptime, and maintenance hinder a company's ability to respond swiftly to logistical challenges and ever-changing business challenges. The lack of agility in traditional systems hinders the experimentation and implementation of various business models, which is the reality of the current day.

A cloud-based system enables businesses to focus on its core functions, rather than its systems, which are just the enablers. A managed service reduces the complexity of system management and guarantees uptime, scalability, 24/7 support, and ever-growing feature updates. Leading cloud-based systems are also designed with configurability, which enables the business to model its USP and change according to scenarios without much investment. This enables agility in business execution, which is the true enablement.

This blog highlights the key benefits of using a cloud-based TMS, showing how it can solve common shipping problems, leapfrog traditional limitations, and benefit businesses with real-time insights. 

The Shift to Cloud-Based TMS from a Traditional TMS

Unlike on-premise solutions, which require significant capital investment in hardware and software and a dedicated IT staff for maintenance and updates, cloud-based TMS operates on a fully managed, multi-tenant cloud infrastructure. Usually, these cloud-based systems are offered as SaaS solutions by making the entire software management a black box for the business and removing the challenges of managing and maintaining it.

These SaaS models make entry costs minimal, enabling users to experiment with the software. The solutions also offer matured integrations to connect the former with other enterprise applications that businesses may already use. Once proven, scaling the systems to address the business needs is a breeze. 

Modern-day SAAS TMS solutions come with well-equipped data management and analysis features which generate decision-making insights to optimize and ease operations and react to adverse situations as and when they arise. As these are shared services, the cost of these solutions is far more reasonable than on-prem systems and far more effective.

Growing Trend Towards Cloud Adoption in Logistics

MarketsandMarkets reports that the global transportation management system market is projected to grow from $13.5 billion in 2023 to $33.3 billion by 2028 — at a CAGR of 19.7%. The complexities of modern supply chains, characterized by volatile demand patterns, global sourcing, and the expectation of rapid delivery times are driving this change. 

Cloud-based TMS solutions provide enhanced mobility, usability, optimization, and advanced predictive analytics capabilities. More small and mid-level logistics businesses are adopting these solutions as the minimal entry costs and the inherent scalability of these systems. This helps these businesses overcome the traditional barriers of high implementation and maintenance costs of TMS systems.

For instance, large retailers and manufacturers are leveraging cloud-based TMS to optimize their carrier selection processes, route planning, and freight auditing, resulting in significant cost savings and improved delivery performance. With insights into transportation operations, courtesy real-time data analytics and reporting, companies are able to make better decisions and quickly respond to consumer demand and supply chain shocks.

Benefits of a Cloud-Based TMS System

Top 12 Benefits of a Cloud-Based TMS System

Adopting a cloud-based TMS offers many strategic benefits that can significantly enhance supply chain operations' efficiency, agility, and competitiveness. Here are the top 15:

1. Real-Time Data Utilization

Cloud-based TMS platforms offer unparalleled access to live data streams across the supply chain allowing businesses to dynamically adjust to disruptions, customer demands, or capacity fluctuations, ensuring agility and resilience. 

Businesses in the supply chain industry can reduce costs by analyzing data on transportation costs, inventory levels, and production scheduling, organizations can identify opportunities for savings.

For instance, if a company consistently finds that a specific transportation route is more expensive than others, it can take actions to optimize the routing. This could involve finding alternative routes, adjusting delivery schedules, or negotiating better rates with the transportation provider. Similarly, if an organization discovers excessive inventory levels, it can optimize inventory management by reducing safety stock levels, adjusting ordering frequency, or exploring alternative storage options.

2. Advanced Predictive Analytics

Predictive analytics transforms vast amounts of historical and real-time data into actionable insights, enabling foresighted planning and decision-making. Cloud-based TMS platforms leverage these analytics to predict future supply chain variables such as demand fluctuations, carrier performance, and price trends. By doing so, companies can proactively adjust their strategies to mitigate risks or capitalize on emerging opportunities. 

For example, predictive analytics can forecast potential disruptions or bottlenecks, allowing businesses to pre-emptively address these issues before they impact service levels or costs. 81% of supply chain professionals say analytics will be important in reducing costs.

3. Seamless Integration with IoT

The integration of Cloud-based TMS with Internet of Things (IoT) technology epitomizes the concept of a connected, intelligent supply chain. IoT devices, such as GPS and temperature sensors on shipping containers, provide real-time data on the location, condition, and environmental factors affecting shipments. 

This level of detail enables companies to enhance the accuracy of delivery estimates, monitor the quality of goods in transit, and even automate responses to certain conditions (e.g., temperature variations). A compelling case is the pharmaceutical industry, where ensuring the integrity of temperature-sensitive products during transport is important. With IoT integration, companies can achieve compliance with stringent regulations, reduce spoilage rates, and potentially save significant related logistics costs.

4. Global Trade Compliance Features

Navigating international trade laws and regulations is a challenge for global supply chains. Cloud-based TMS systems manage this complexity by updating with the latest compliance requirements, tariffs, and trade agreements. This reduces the risk of delays and penalties and streamlines the customs clearance. 

Companies can enhance their operational efficiency and avoid the reputational damage associated with compliance failures. 

For example, when new trade agreements are enacted, a cloud-based TMS can quickly adjust to new tariff structures, keeping companies compliant and competitive in international trade. Deloitte's research highlights that companies using automated compliance solutions can reduce their customs processing times by automating "grunt work," significantly improving their speed to market in international operations.

5. Sustainability Optimization

The global push towards sustainability has made eco-friendly operations a strategic priority for companies. Cloud-based TMS aids in this endeavor by optimizing routes and loads to minimize fuel consumption and, consequently, carbon emissions. Advanced algorithms can identify the most efficient routes and consolidate shipments to maximize load capacity, reducing the required trips. 

Moreover, by facilitating the selection of green carriers and eco-friendly transportation modes, cloud-based TMS aligns operational goals with environmental sustainability, enhancing corporate social responsibility profiles.

6. Network-wide Visibility and Collaboration

A cloud-based TMS offers a "single pane of glass" view into the supply chain, granting stakeholders comprehensive visibility into every aspect of transportation operations. 

According to KPMG’s Future of Supply Chain report, 87% of supply chain leaders see visibility as a top priority as it makes it easy to manage goods-in-transit, eases collaborative planning, execution, and monitoring of supply chain activities. It facilitates the sharing of data and insights between suppliers, carriers, and customers, promoting a more integrated and synchronized supply chain ecosystem. 

7. Flexible and Scalable Infrastructure

Rapidly scaling operations in response to market demands is important. A cloud-based TMS offers unparalleled flexibility, enabling businesses to adjust their logistics capabilities without significant capital investment in IT infrastructure. This scalability is not just about handling increased volume; it's about adapting to new business models, entering new markets, and accommodating seasonal fluctuations easily. 

For instance, during peak seasons like the holiday shopping rush, a cloud-based TMS can scale to manage the surge in shipments, ensuring timely deliveries without needing permanent resources that lie idle during slower periods. This elasticity translates into cost savings and enhanced competitiveness, allowing companies to invest in growth rather than fixed infrastructure.

8. Strategic Carrier Management

One of the most important decisions in logistics is selecting the right carriers, as this choice directly impacts cost, efficiency, and customer satisfaction. A cloud-based TMS provides access to a wealth of data on carrier performance, rates, and service quality, enabling logistics managers to make informed decisions. 

More than just cost savings, strategic carrier management is about building strong, collaborative relationships with carriers that can offer flexibility, reliability, and innovative solutions to logistical challenges. 

For example, by analyzing historical performance data, a supply chain manager can identify carriers that consistently meet delivery windows during peak periods, thereby reducing the risk of delays and improving customer service levels.

9. Automated Freight Settlement

The freight billing and settlement process is traditionally labor-intensive and prone to errors, leading to disputes, delayed payments, and strained carrier relationships. A cloud-based TMS automates this process, ensuring accuracy, timeliness, and transparency in billing. 

Automation reduces administrative overhead, frees up resources for strategic tasks, and significantly improves the speed of settlements. This enhances carrier relationships by ensuring prompt payment and provides valuable data for negotiating future contracts. 

10. Strong Security and Data Protection

Data security and privacy are top-notch concerns for any supply chain operation, given the sensitivity of the information handled, including customer data, shipment details, and proprietary business information. Cloud-based TMS providers invest heavily in state-of-the-art security measures, including data encryption, regular security audits, and compliance with international standards. 

This level of security often surpasses what individual companies can achieve on their own, offering peace of mind and protecting against data breaches that could have severe reputational and financial consequences. Moreover, the resilience of cloud infrastructure ensures the continuity of operations, even in the face of cyber-attacks or natural disasters.

11. Ease of integration

Cloud-based Transportation Management Systems (TMS) excel in their ease of integration, serving as a cornerstone for streamlined logistics operations. These systems are designed with modern API (Application Programming Interface) integrations in mind, allowing seamless connectivity with various software. This includes ERP (Enterprise Resource Planning) systems, warehouse management systems (WMS), CRM (Customer Relationship Management) platforms, and e-commerce solutions. 

Integrations extend the functionality of the TMS, enabling real-time data exchange and enhanced visibility across the supply chain. Businesses can thus leverage comprehensive insights for decision-making, ensuring a cohesive and efficient operational flow. This interoperability simplifies IT architectures and accelerates the deployment and adoption of new technologies, making cloud-based TMS a versatile and future-proof option for logistics management.

12. Reduced Dependency on IT Infrastructure

Traditional TMS solutions often require substantial IT infrastructure and support, tying up resources that could be better used elsewhere. On the other hand, a cloud-based TMS shifts the burden of maintenance, updates, and infrastructure management to the service provider, freeing up internal IT resources to focus on innovation and strategic initiatives.  

This shift reduces operational costs and accelerates the deployment of new logistics capabilities, as updates and new features can be rolled out without extensive internal testing or downtime.

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Reap the Benefits of Cloud-Based TMS With Tata BB Matrix

Conducting a post-implementation review ensures your TMS isn't underutilized, leading to manual workarounds and missed productivity gains. Regular gap analyses help address evolving logistics needs, ensuring that your TMS continues to deliver maximum ROI.

Tata BB Matrix helps businesses manage their fleet, optimize routes, and ensure the efficient loading of vehicles. The benefits of employing Tata BB Matrix softwares in logistics and supply chain operations are manifold:

  • Real-Time Tracking and Enhanced Visibility: Instant tracking access for seamless coordination and customer satisfaction improvement.
  • Seamless Integration and Better Coordination: Smooth logistics integration with partners for proactive delay management and on-time delivery.
  • Cost-Effectiveness with a Pay-As-You-Go Model: Flexible pricing allows for operational scalability and reduced costs.
  • Data Security and Reliability: Robust measures protect information, ensuring trust and data integrity.
  • Optimized Route Planning: Real-time data guides drivers on efficient routes, reducing delays. Sophisticated algorithms select optimal carriers and transport modes, enhancing reliability and availability.

Visit our website or schedule a free call with our experts to discover how Tata BB Matrix can provide an efficient Transportation Management System for all your logistics needs.

Frequently asked questions

What are Transportation Management Systems?

A Transportation Management System (TMS) is more than just a tracking and freight billing tool. Its platform uses advanced algorithms and data analytics to improve logistics and supply chain efficiency.

TMS integrates deeply with a company's supply chain management strategies. It offers dynamic planning and optimization capabilities beyond basic route and load optimization, such as predictive analytics for demand forecasting, advanced carrier selection algorithms, and simulation tools for scenario planning.

How does a TMS help with supply chain optimization?

Here's how it helps companies:

  • Enhance Visibility: TMS uses IoT devices and sensors for granular tracking of goods in transit, providing real-time visibility and predictive ETAs. This helps in proactive supply chain management, reducing the impact of disruptions.
  • Optimize Multimodal Transportation: Advanced TMS optimizes different transport modes (road, rail, air, sea) and considers intermodal options for efficient and cost-effective transportation.
  • Improve Freight Procurement: TMS provides access to extensive carrier networks and real-time market rates, enabling strategic freight procurement through sophisticated bidding and contract management tools, often with AI support.
  • Advanced Analytics and Reporting: TMS offers deep insights into transportation spend, carrier performance, and supply chain vulnerabilities through advanced analytics and custom reporting, supporting strategic decision-making and continuous improvement.
  • Sustainability in Logistics: Modern TMS focuses on reducing transportation carbon footprint by optimizing routes and loads to minimize empty miles and fuel consumption and selecting eco-friendly carriers.
  • Compliance and Security: TMS ensures compliance with international shipping regulations, manages documentation and audit trails, and provides safety and security features to protect against fraud and theft.