On the face of it, thinking logically, there is only one drive for transportation management systems - reducing costs. That is why there is a common assumption that no matter what TMS you choose, you will come ahead with savings. The system is expected to pay for itself within a few years, if not months.
These systems are expensive, and have a learning curve. We have built many such systems using common tools for our clients. In each case they delivered cost savings well in excess of what the client paid for the system.
Having said that, I would also like to point out that a bulk of transport dollars are wasted in many companies of moving goods that should not be moved, or carried in the inventory in the first place. If you handle that problem first - your transportation costs will plummet significantly.
We cover this question in full detail in several blogs because it is a rather deep discussion worthy of its own contemplation. We encourage you to read the following blog posts before we continue this discussion:
- What is the Most Effective Strategy to Massively Slash Shipping Freight Costs?
- Why Logistics Companies Get Away With Extra-ordinary Practices and Pricing?
- What Is The Easiest Way To Cut Warehousing Logistics Cost To Minimum?
Once you have read these three posts carefully, you would already have a number of ideas on making changes in your logistics and transportation arrangements. Now you are ready to consider the right TMS for your operation. Read the following 2 blog posts before you actually invest in a TMS:
- Critical Functionality Of A Good Transportation Management System (TMS)
- Three Dimensions Of Transportation Optimisation
Now you are well equipped with the requisite information to start choosing the right TMS and implementing it into your business.