StarNavi Blog - Choose The Right TMS For Your Business

By starnavi | Development | December 2020 | 268 views

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Are you looking to discover the power of Transportation Management System Software? It can be overwhelming to make the switch with different types of Transportation Management Systems to choose from. It is important to consider individual company needs when investing in the best method. We have uncovered the benefits of using a Transportation Management System for transportation or logistic providers or even for owners of a business containing a logistics department. 

What is a Transportation Management System (TMS)?

Before we compare and contrast, what exactly is a Transportation Management System? Commonly referred to as a TMS, this software manages logistic operations to ensure a seamless shipping process. As a function of supply chain management, TMSs allow shippers to automate their inbound and outbound processes in order to raise efficiency and functionality while reducing costs and saving time on future shipments. Many companies choose to work with such systems to minimize all possible business risks they can face.

Benefits of Using a Transportation Management System Software

A TMS can save a business valuable time within the supply chain process. It can also aid in the planning and flexibility of shipments and deliveries when a system is integrated that works best for the company. Tracking inbound and outbound shipments will lead to even further cost reductions and lead to real-time supply chain visibility.

Lastly, with accountability comes a reduction in errors, which should be enticing for any management overseeing logistics operations. Increasing speed and precision is what major transportation and logistics providers such as Americold and C.H. Robinson are doing with the variety of platforms they utilize. In order to remain a steady competitor, it is important to prioritize these key fundamental supply chain needs.

Features of a Good Transportation Management System Software

When selecting the right TMS, the following are features each company should have in order to function properly and receive a return on the investment that is a TMS. The following features are signs of a good TMS: 

  • Calculating Prices

  • Building Loads for Optimization

  • Planning Routes

  • Tracking Shipments

  • Integrating with Third-party Softwares 

Keep an eye on the following features when we compare and contrast the most popular Transportation Management Software Systems below.

Main Options of Working With a TMS

The three main types of Transportation Management System software are as follows:  

  1. Buy an On-Premises TMS

  2. Use a Cloud-based TMS

  3. Invest in Custom TMS Development

Considering that each tracking system has benefits and drawbacks, and each company will need a specific combination of features, it is important to understand what each type of TMS has to offer in order to make the right choice for your company. 

Benefits of Each Solution

For an accurate analysis, we have measured the PROs and CONs of each TMS solution across 5 different metrics: 

  1. Security

  2. Scalability

  3. Functionality 

  4. Data Exchange

  5. Cost

 

  1. On-Premises TMS

As the name implies, the On-Premises TMS is physically installed on-site at company headquarters by a hosted TMS provider. In the past, it was the most popular offering, until Cloud-Based TMS took over. 

  1. Security

Pros: Third parties are unable to access your data – you have full control.

Cons: Since the data is stored locally, total data loss is possible if the data isn’t backed up securely.

  1. Scalability

Pros: Scaling is possible with the purchase of additional hardware.

Cons: Prices can run high when opening new offices since additional hardware must be purchased for each individual location. 

  1. Functionality

Pros: Receive set features at a bundled price along with customizability.

Cons: Bundled features can make the software complex and hard to utilize with ease. You may also experience support issues with too much customizability that can only be resolved by a third party.

  1. Data Exchange

Pros: N/A

Cons: It can be problematic for employees trying to access the software remotely. This is a devastating hurdle to overcome, considering the state of the world today. It is also difficult to achieve an optimized data exchange as it also requires additional software for remote access.

  1. Cost

Pros: One-time initial payment upon purchase. No monthly fees!

Cons: Hardware upfront costs can run high, along with recurring software maintenance costs.

Overall, this system can provide substantial issues when working remotely, making it the least viable for a world tending towards frequent remote work. 

However, other PROs may balance out that CON depending on your company needs.

2. Cloud-Based TMS

Thanks to major cloud advancements in recent years, it is possible to find a wide selection of TMS systems hosted in the cloud. Access a comparison chart here.

  1. Security

Pros: N/A

Cons: Your security, privacy, and data control rely on a third party. Also, prepare to utilize only the latest version of your provider’s software, as you will be unable to delay upgrades or postpone changes to any features. 

  1. Scalability

Pros: Scalability is easy and handled by the software provider.

Cons: Costs will rise rapidly when scaling your software.

  1. Functionality

Pros: Functionality should be seamless, considering countless features are available on the market to fully customize your TMS to suit your business.

Cons: Some functionalities you may need come coupled with others you don’t need. Too many functions paired with a faulty UX will result in time-consuming training sessions to teach employees how to utilize the software. It is possible to customize, but prepare to pay additional fees.

  1. Data Exchange

Pros: Faster data exchange due to integration with most external Warehouse Management Systems (WMSs), invoicing systems, and proprietary solutions.

Cons: It’s possible that your stakeholders or internal departments use a different TMS or a varying format. This might cost you time spent reformatting data. 

  1. Cost

Pros: A variety of payment plans will be available to fit your company’s needs. Cloud-hosted TMS tools remove hardware maintenance fees.

Cons: Additional fees for customizing the functionality, but overall more cost-effective and less tedious.

The Cloud-Based TMS is overall a great solution but should be carefully compared with having a Custom TMS Developed on each of these metrics. It is possible for a Custom TMS to build to be more beneficial than a Cloud-hosted TMS, although the cloud seems easier or most cost-effective.

3. Custom TMS Development

A custom TMS would be made by a developer to include all of the custom features and tools required by your company style, size, type, and functions. This option can be seen as the highest in cost but could be just as costly as the other options yet provide more comfort, ease, and accessibility. 

  1. Security

Pros: Security management of your TMS falls in the hands of your development team. You will also be the sole owner of your product – third parties cannot access your data. 

Cons: N/A

  1. Scalability

Pros: It is possible to ensure scalability at the beginning of building your custom software (as you should). 

Cons: If you don’t build scalability into the TMS in the beginning of the development process, it can be problematic and very challenging in the future.

  1. Functionality

Pros: Choose the features you need and nothing else. Eliminating extraneous features will simplify the system significantly. Your functionality can also be widened by having your vendor implement new modules. The integration will be quick and seamless. 

Cons: N/A

  1. Data Exchange

Pros: Share data in a standardized format with other software such as stakeholders’ warehouse management and enterprise resource planning.

Cons: N/A

  1. Cost

Pros: There is a possibility the custom build costs just as much as the others listed, yet functions easier. In the long run, other options may cost more due to monthly fees and maintenance. 

Cons: Having a custom TMS built could be a higher upfront cost than the other options listed, depending on the case.

Summary

Comparing costs, features, and benefits of a TMS may seem time-consuming for your business. However, the upfront time investment and outsourcing of this project will pay off in the long run once the automation of the Transportation Management System Software allows you scheduling flexibility to save you time and money in the future. If you are looking to compete with major logistics providers, StarNavi highly recommends upgrading and automating your systems. Contact StarNavi today to hire the best development team for the upgrade and implementation of your TMS.