Transportation management system


A transportation management system is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system.
A TMS usually "sits" between an ERP or legacy order processing and warehouse/distribution module. A typical scenario would include both inbound and outbound orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions. These solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider. Once the best provider is selected, the solution typically generates electronic load tendering and track/trace to execute the optimized shipment with the selected carrier, and later to support freight audit and payment. Links back to ERP systems, and sometimes secondarily to WMS programs also linked to ERP are also common.

Licensing

These systems have been offered with different types of licensing arrangements. The four main offerings are:
  1. On-premises licensing
  2. Hosted licensing
  3. On-premises hosted licensing
  4. Hosted – TMS free of licensing
Additionally, some software providers were either acquired or merged with supply chain management consultancies and started offering shippers "blended" managed and software services as an outsourced process. Primary Tier 1 TMS providers are still independent, carrier and 3PL neutral, and ERP neutral. While ERP providers are moving to improve their on-premises transportation management offerings by adding TMS modules to their existing, implemented base, the advent of Software-as-a-Service or "SaaS" delivery resulted in a surge of emerging TMS providers.

Functionalities

Transportation management systems manage four key processes of transportation management:
  1. Planning and decision making – TMS will define the most efficient transport schemes according to given parameters, which have a lower or higher importance according to the user policy: transport cost, shorter lead-time, fewer stops possible to ensure quality, flows regrouping coefficient, etc.
  2. Transportation Execution – TMS will allow for the execution of the transportation plan such as carrier rate acceptance, carrier dispatching, and EDI.
  3. Transport follow-up – TMS will allow following any physical or administrative operation regarding transportation: traceability of transport event by event, editing of reception, custom clearance, invoicing and booking documents, sending of transport alerts
  4. Measurement – TMS have or need to have a logistics key performance indicator reporting function for transport.
Various functions of a TMS include:
However, all the above logistical functions need to be scrutinized as to how each parameter functions.

Patents

Several specific patents have been filed to protect the intellectual property rights of US TMS development corporations. However, judgments against several non-US software companies in 2009, 2010 and 2012 had not been unenforceable as of 2018.
The largest number of TMS patents were filed by IBM, SAP, Manhattan Associates, Oracle, Kuebix, JDA, and Sterling. Each holds over 15 patents protecting various aspects of their technology.