Logistics Software

Logistics software is a computer program which is used to make the process of logistics services more reliable and accurate. Logistics management is a science of planning, organizing, and executing activities for delivering the required goods or services in the right location at the right time. Modern technologies, communication links, and control systems are essential to manage materials, services, and financial goals. Logistics software helps companies or organizations in their overall performances of designing, developing, marketing, and financing.

This software ensures a consistency in the management and automation of a variety of activities in the logistics management. This also helps for precise event management, planning, transactions, and global trading. Data collection and evaluation of raw materials stored, finished goods, and other information about the supply chain can be accessed easily by using the logistics software. Perfection and pace of the operational processes are maintained to increase the performances of the companies or organisations as a whole.

Logistics software helps to retain a sequential order in the transportation of cargos. It gives all details about traffic routes and modes of transportation to satisfy customer requirements at a lower expense. This software also enables a customer to track and trace the status of an ordered product during transportation. Logistics software in distribution management aids in warehousing infrastructure, goods movement, quality assurance, and product labelling. Freight billing, payment, and auditing are made quicker and reliable with the introduction of this software. Other areas in which logistics software find its application are financial services, sales, marketing, human resource management, performance evaluation, order processing, and customer support.

Logistics software proves to be efficient in network planning, asset analysis, and inventory simulations for successful logistics management. It gives an up-to-date detail about the whole business process for the evaluation of progress in performance. It controls and manages industrial processes such as automation, manufacturing, management, and other operational procedures. Integration of computers to run the software, application selection, and maintenance are necessary to get a required result. Logistics softwares are designed, developed and supported by software developing companies according to the requirements of the logistics management of that company. Promptness, reliability, analytical ability, and defined planning outlook are some of the great concerns while designing logistics software.

TMS Software: Frequently Asked Questions

A shipper’s Transportation Management System (TMS) can have a major impact on its operating cost. With this in mind, shippers achieve transportation management in one of three ways: by creating an in house logistics department, by outsourcing to a Third Party Logistics (3PL) provider (a.k.a. freight broker), or by implementing logistics software. Most shippers are more familiar with the first two options than they are with the latter option. If you need a new logistics solution, but are unfamiliar with TMS software, the answers below can help you assess its value:

What capabilities does it offer?

TMS software is designed to supply shippers with a complete logistics function. To this end, it provides them with the following capabilities, among others:

  • Ability to define rules for carrier selection and shipping routes
  • Ability to mode switch for integrating shipping methods
  • Ability to implement strategies that improve warehouse management
  • Ability to print shipping labels automatically

Implementing TMS software allows shippers to function as their own logistics provider without incurring the cost of creating a logistics department, or outsourcing to a 3PL provider.

What costs are associated with implementing it?

Implementation involves two basic costs: the cost of purchasing the product, or paying for it on a Software as a Service (SaaS) model, and the cost of training how to use it. Overall, these costs are minimal compared to the expense of creating a logistics department or outsourcing to a full service 3PL provider.

Is it better to implement it in-house or on a SaaS model?

For many shippers, implementing TMS software on a SaaS model is the ideal option. In addition to reducing software investment, the SaaS model also eliminates the cost of buying new hardware for system support, system maintenance fees, and system upgrade costs. In house implementation is preferred when industry standards or company policies discourage or prohibit the use of SaaS solutions.

Can it provide as many shipping options as a 3PL provider?

TMS softwarecan provide at least as many shipping options as a 3PL provider and it often provides more. Some 3PL providers limit your shipping options to ones that are found in an electronic posting system, where carriers post available transportation for available loads. TMS software can break through this barrier, allowing you to form relationships with carriers that don’t use posting systems.

Are there different types of TMS software?

There are as many types of TMS software as shippers have shipping needs. For example, a shipper that needs Less than Truck Load (LTL) shipping solutions would implement LTL software.

Is it as viable for large shippers as it is for small ones?

Any shipper can benefit from using TMS software. It is typically used by small to medium size shippers who need an alternative to creating a logistics department or outsourcing to a 3PL provider that provides comprehensive solutions. Even if your company is large, and its shipping process is complex, TMS software can reduce its shipping cost compared to the options above.

Logistics Management: Which Option Is the Most Effective?

In shipping, logistics management refers to the management of the shipping process in three respects: transportation planning, transportation monitoring, and the measurement of Key Performance Indicators (KPIs). These disciplines form what is known as a Transportation Management System (TMS), which manages the shipping process from the planning phase to the quality assessment phase. With the exception of certain administrative functions of transportation monitoring, logistics informs each aspect of a TMS. But the best logistical resource for shipping management can be a matter of debate.

The Emergence of 3PL

In recent years, Third Party Logistics (3PL) has become a viable alternative for companies that don’t have – and often can’t afford – an in-house logistics department. Also known as freight brokers, 3PL providers offer different levels of logistics, from basic shipping services to comprehensive, innovative shipping management. For companies that need a singular shipping service (e.g. cross docking) instead of a comprehensive logistical approach, 3PL can be an economical alternative to creating a logistics department. But for companies that need the highest level of logistics (comprehensive, innovative shipping management), contracting with a 3PL provider and maintaining an in-house logistics department can be similarly expensive.

But there is an affordable alternative to creating an in-house department or using a high-level 3PL provider: logistics software, also known as TMS software. Featuring a user-friendly interface that allows non-experts to plan, monitor, and assess the value of shipping arrangements, TMS software occupies a unique niche in the shipping logistics industry, one that allows shippers to supply their own logistics without hiring in-house experts.

If your company is considering alternatives to entering another 3PL contract, the software’s benefits could provide exactly what you need.

The Benefits of TMS Software

For most shippers, TMS software has three primary benefits when compared to operating an in-house logistics department or contracting with a 3PL provider:

  • Low overall cost
  • Truly unlimited shipping options
  • Direct control of the shipping process

An in-house department can offer unlimited shipping options and control of the shipping process, but it doesn’t offer these benefits on a budget that is affordable for small and midsized companies. 3PL can offer an economical logistics function, but it doesn’t offer control of the shipping process. When a shipper wants the benefits listed above in a single solution, TMS software is the most effective option.

Conclusion

TMS software can be implemented on an in house model or on a Software as a Service (SaaS) model. Because it eliminates hardware costs, system maintenance fees, and system upgrade costs; the latter model offers the most economy and the least aggravation, making it the most popular option.

If your company doesn’t have the budget to support a logistics department, and it doesn’t wish to delegate its shipping process to a 3PL provider, TMS software could be the answer. To learn more about how TMS software could improve your company’s TMS while lowering its operating cost, consult with a provider of shipping logistics software today.

TL Logistics Software – How Does it Compare to Third Party Logistics?

If your company is at the point that it ships enough goods to benefit from truckload (TL) shipping, achieving the optimal truckload transportation management system will require careful consideration, beginning with what logistics option you should choose. In most cases, companies have three basic options for applying logistics to the shipping process: hiring an in house logistics expert; contracting with a third party logistics (3PL) provider; or implementing TL logistics software-also known as truckload logistics software.

If your company feels like other shippers, it would probably prefer to have its own logistic expert on location. But, if adding a $70,000-$90,000 salary to your payroll isn’t acceptable, then contracting with a 3PL provider for TL shipping solutions or implementing logistics software are more affordable options.

To understand what you get when you hire a 3PL provider, it helps to distinguish the four types of 3PL providers: standard 3PL providers, which offer basic 3PL services and usually don’t feature 3PL as their main function; service developers, which offer a more specialized range of services than standard 3PL providers; customer developers, which manage a company’s entire shipping process but don’t suggest innovative shipping solutions; and customer adapters, which manage a company’s shipping process and propose innovative solutions.

If you were only looking for TL shipping solutions, hiring a standard 3PL provider or a service developer would be the most cost effective option. However, these types of providers typically place their customers with carriers that offer third party logistics providers a discounted rate that they profit from by charging their customers a rate that exceeds it.

If you think that this scenario sounds disingenuous, it is, especially as it places the provider’s interests above the customer’s in such a way that a customer has little chance of realizing optimal truckload shipping solutions, which is why it turned to the provider in the first place. TL logistics software, on the other hand, removes this situation by doing the work of a logistic expert and allowing companies to become their own logistics provider.

Like a logistic expert or customer adapter, the software evaluates every aspect of the truckload shipping process (i.e. route analysis and optimization, freight optimization, payment arrangements, etc.) and presents companies with a list of ranked shipping options that can be selected through the use of a user-friendly interface. If cost savings is a major goal in your company’s shipping process, logistics software offers a dual cost savings approach: it negates the need to outsource logistics and uncovers shipping solutions that offer the lowest price for you shipping needs.

Logistics Software Provides Companies With Freight Optimization

In the manufacturing industry, the discipline of logistics focuses on efficiently moving products from the manufacturer to the buyer. For large manufacturers, logistical operations can represent a large expense, especially when logistical elements are managed separately instead of being integrated into one solution. In an attempt to take the time and guesswork of out executing logistics, many companies totally or partially outsource their freight optimization needs to third parties. A complete outsourcing amounts to hiring a company to move products throughout the entire supply chain, while a partial outsourcing involves letting a third party manage the transportation of goods through the “stages” of the supply chain. However, implementing logistics software is a more cost effective way to achieve freight optimization that offers the same level of quality as a third party logistics provider.

There are several factors that contribute to a manufacturer’s total shipping costs, including warehouse fees, inventory fees and freight carriage fees. To minimize these fees, a manufacturer might choose to ship by air carrier instead of in tandem with freight carriage, significantly reducing warehouse fees by moving the goods from manufacturer to buyer in a matter of hours. However, to save the most money, companies have to examine all three cost areas with an eye toward developing an integrated cost savings solution. In developing such a solution, there are two basic issues that manufacturers must address: finding the right mix of freight carriage, inventory and warehouse services and finding the best price for each one.

Logistics software can help by providing an analysis of service combinations in relation to individual service cost. For small to midsize companies that deliver goods from the assembly line directly to retail outlets, logistics software can offer a basic analysis of routing options and freight rates. But companies that use multiple warehouses and multiple supply chain locations may require more, such as production scheduling analysis that develops manufacturing plans with regard to multiple supply chain locations (i.e. company’s whose products are assembled at more than one location before reaching the retailer).

The basic advantage of logistics software is that offers refined shipping solutions that meet the needs of a variety of manufacturing situations (and does so at a lower cost than hiring a third party logistics provider). For example, some solutions may focus on a particular freight carriage issue, such as analyzing how to increase delivery time by studying construction schedules and highway traffic data, while other solutions may focus on offering an integrated solution for all logistical concerns, including carrier loading, weight distribution, cube optimization and shortest path to destination. Studies show that manufacturer’s who implement logistics software regularly realize a 10 percent decrease in shipping costs after the first year.

Whether your company has its own trucking system or uses a third party, logistics software can help reduce your delivery costs without compromising punctuality, efficiency or freight safety. If you need to simplify your delivery process and reduce your cost of shipping, consulting with a logistics software provider is the best way to arrive at a solution that accomplishes both at the same time.

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