To achieve a completely diversified and low-risk supply chain, we recommend using a wide variety of tools and resources. The technology in the logistics industry moves quickly, constantly being updated to help businesses tackle new challenges and better serve their customers. This has especially been true for transportation management systems (TMS). These systems have long helped businesses plan, execute and optimize the movement of their products, which is why they are so often implemented within global and domestic supply chains.
On the other hand, many businesses rely on third-party logistics providers (3PLs) to help them move their freight quickly, efficiently, and affordably. 3PLs, especially asset-based ones, employ a wide range of expertise, resources, and technology to help their customers reach their goals.
Using both a TMS and partnering with a 3PL can provide excellent benefits to your business and its supply chain. Find out how each can help you.
What Exactly is a TMS System?
A transportation management system is a type of technology that allows businesses to manage their supply chain and shipping operations. The programs are powerful and complex, offering a variety of capabilities that include:
- Planning and procurement
- Carrier selection and communication
- Shipment documentation and tracking
- Freight billing
- Performance tracking and analytics reporting
Think of it as an all-inclusive suite of technology to help your business manage its supply chain. It can be combined with systems like enterprise resource planning (ERP) and warehouse management systems (WMS), but it does not replace them. Why would a business want to employ this technology? The reason why many retailers, manufacturers, and distributors use a TMS is because it helps them:
- More efficiently plan and route shipments
- Find carriers to haul loads at more cost-efficient rates
- Track their shipments
- Gain access to data for supply chain optimization
It’s a piece of technology that can be implemented into your supply chain, but it’s not without its drawbacks. Yes, it’s a DIY solution for businesses to manage their supply chains, but it comes at a cost, both literally and figuratively.
The Downside of Using a TMS
You know better than anyone how complex your supply chain is. There are multiple parties, from manufacturers to distributors to warehouses, carriers, retailers, and end users. While a TMS can help you manage all the links in your supply chain, the process isn’t automatic. A TMS system can be used to optimize your logistics operation, but you still need to know how to optimize it. You can buy all the tools and materials needed to build a house, but one important question remains: do you know how to build a house?
If you’re considering using a TMS system, keep in mind that it is only a tool. Simply using it will not provide efficiency and optimization to your supply chain. Neither will it provide the resources your business needs to run its own warehouse, distribution, etc.
What Can a 3PL Provide?
Many businesses, including those that already use a TMS, choose to work with a third-party logistics provider because of the benefits they provide. 3PLs are businesses that specialize in logistics optimization and supply chain management. They employ the teams, resources, and technology needed to fully manage a supply chain from end to end, customizing their service offerings based on your specific needs and goals.
Many of the services a 3PL will provide your business include:
- Transportation management
- Warehouse management
- Kitting and fulfillment
- Carrier management, selection, and rate negotiation
- Freight billing and auditing
- White glove and final mile delivery
- Much more
When you partner with a 3PL company, you gain access to all the assets they have at their disposal. This includes warehousing space, a large carrier network, and many supply chain experts that not only know how to operate a TMS system, they can also dive deep into your supply chain. These experts help you solve any issue you have, optimize your current resources, and identify new ways to streamline your operations.
What We Offer at King Solutions
At King, we partner with businesses to solve their most pressing logistics issues. We work with you to create a customized solution that takes into account your entire supply chain, the resources you have, the resources you need, and your end goals. Our team becomes an extension of your own, working closely with your team on everything from warehousing to fulfillment, distribution, and more. Ready to see how you can leverage our large network of carriers, warehousing locations in Chicago and Minneapolis, and all our other assets? Get in touch with our team today for a free supply chain consultation and review.