Maximizing ROI with a Modern TMS: Best Practices and Strategies

A modern transportation management system (TMS) is more than just a tool—it’s a strategic investment.

Are you struggling to balance cost efficiency and operational performance? This article analyzes the best practices and strategies to drive maximum ROI from your TMS integration.

We’ll also explore innovative solutions for improving operational efficiency and optimizing freight management.

Understanding ROI in the Context of TMS

What does ROI mean for TMS? It refers to the value a business gains after investing in a TMS. This could mean improving efficiency, reducing operational costs, and enhancing service levels for logistics.

The goal is to benefit from all the TMS values through streamlined processes, better decision-making, and the optimization of transportation networks.

How can ROI be calculated accurately? By comparing the cost savings, time efficiency, and service improvement since the TMS was introduced against its implementation and cost.

Key Metrics and KPIs

Tracking key performance indicators (KPIs) that reflect logistics performance is critical to effectively measuring TMS ROI. These can include (but are not limited to):

• Cost per shipment: Measuring the total cost to move goods, including fuel, labor, and carrier charges.

• On-time delivery rate: Evaluating service levels and customer satisfaction by tracking how often deliveries arrive as promised.

• Freight spend analysis: Examining overall transportation expenses and identifying cost-saving opportunities.

• Load utilization rate: Measures how efficiently vehicle space is used. Higher load utilization means fewer trips and lower transportation costs.

• Carrier performance: Monitors how well carriers meet service expectations, such as on-time pickups, deliveries, and damage-free shipments.

Best Practices for Maximizing TMS ROI

Implementing a TMS alone, unfortunately, doesn't cut it. Choosing the right TMS that caters to your needs is the way to go.

Your ROI TMS strategy needs to ensure the system delivers value over time. These strategies can focus on:

Integration with Existing Systems

A modern TMS must integrate seamlessly with other enterprise systems. This could be enterprise resource planning (ERP) or warehouse management systems (WMS).

Seamless integration improves data flows between platforms and provides real-time visibility into operations.

For example, connecting your TMS with ERP allows for better cost control by aligning transportation planning with inventory management and financial assistance.

This helps improve decision-making, driving efficiency and visibility across the entire supply chain operation.

User Training and Adoption

Proper user training and TMS adoption strategies are crucial for maximizing its benefits. An excellent rule of thumb is to look for a TMS that provides:

• User-friendly interface and tutorials.

• Comprehensive onboarding and regular training resources.

• Ongoing support and troubleshooting capabilities.

Prioritize simplicity with a user-friendly interface that minimizes the learning curve and allows immediate results.

Strategies for Improving Efficiency and Cost Management

Strategic TMS approaches enhance operational efficiency and manage freight transportation costs effectively.

Route Optimization Techniques

Efficient route planning and optimization are central methods to reduce costs and improve delivery times.

Modern TMS solutions offer advanced route optimization tools that analyze distance, traffic patterns, and delivery windows to determine the most efficient routes. More techniques include:

• Automated planning: This innovative feature is designed to optimize the planning of recurring lanes, eliminating the need for manual intervention every time. Planimatik offers the automated planning feature within the RFP module.

  This serves large companies that have multiple (many) loads for the same destinations daily or weekly.

• LTL scheduling: Whether you're a small business or a large company, an advanced scheduling feature allows you to plan, reduce downtime, and improve how you organize operations.

  Planimatik's LTL tool introduces advanced scheduling, streamlining shipments less than truckload (LTL) for enhanced efficiency.

Effective Carrier Management

Developing healthy relationships with carriers is essential. Still, managing multiple carriers and negotiating freight rates is a challenging task.

A robust carrier management strategy includes the following:

• Performance monitoring: Using TMS analytics to track carrier performance and identify opportunities for improvement.

• Automated rate negotiation: Streamlining the process of securing the best rates for each shipment.

• Diversifying carrier networks: Building relationships with a mix of carriers reduces dependency on any single provider and enhances service flexibility.

TMS can simplify carrier complex tasks by centralizing carrier management and automating freight rate negotiations. Here are some great TMS features that help with this:

• Dashboard for data-driven insights. Gain valuable insights into your freight operations with Planimatik's Stats, a feature designed to provide a comprehensive overview of your logistics performance.

  You'll have access to key metrics that enable you to make informed decisions and optimize your operations for success.

• Managing requests for proposals (RFPs) in logistics and transportation involves defining requirements and distributing them to all potential service providers.

  The process includes evaluating submissions based on criteria like cost and service quality, negotiating with shortlisted carriers or brokers, and selecting the best candidate.

After awarding the contract, monitoring the provider's performance against key metrics is crucial, ensuring efficient and cost-effective procurement of logistics services.

Leverage Your TMS Full Potential and ROI

Following these best practices and utilizing TMS features can drive operational efficiency, cut costs, and enhance service levels.

Optimize freight shipping costs with Planimatik. Our powerful freight platform empowers businesses to streamline their freight management operations and boost ROI.

Our implementation process can take less than 2 hours, reducing the friction that often overwhelms users with new software.

Ready to see the benefits of ROI TMS for yourself? Request a free demo today and start maximizing your TMS investment.