How to know if you need a TMS? The right questions to ask yourself.

Have you ever wondered about the relevance of a software such as a TMS (Transport Management System) in your company? Indeed, these various software allow you to optimize your delivery routes and thus minimize driving time or distance traveled while taking into account your physical and time constraints. Here are 6 questions to answer to determine if you need a TMS.

1. Are you currently able to identify the impacts of adding express orders to your daily deliveries?

What may seem like a minor impact may be a “domino effect” on all your remaining deliveries for the day. It is possible to see an overview of these impacts in some TMS solutions and make a more informed decision about adding express orders to daily deliveries. This type of observation is very important to take into consideration when building routes. Indeed, it is sometimes more beneficial for a company to ship the express order the next day, rather than forcing a shipment into one of your ready-to-go trucks.

2. Are you currently able to track your vehicles?

TMS software solution offer the possibility to track the route of vehicles. In case of a problem, this tool allows you to easily detect the location of your truck. Finally, you can even study the routes taken by your drivers to determine if they really took the shortest routes for their travel.

Real Time Dispatch & Tracking

Detailed route progress review

3. Are your trucks currently running at full capacity?

Sending trucks at 75% or even 50% of their capacity is a considerable loss for your company. In fact, it is preferable, as much as possible, to use as few trucks as possible to make your shipments. This allows for a much better return on vehicle costs, as well as indirect gains by reducing the number of employees required for the task. In the case where the volume of demand is lower, we recommend assigning drivers to related tasks and making deliveries only when demand is higher.

C2.0 can do a preliminary study to identify the average capacity of your trucks when they leave for your customers. This allows you to evaluate your efficiency in terms of deliveries and to determine the threshold in order to identify the potential gains in productivity if the ratio is increased.

4. How do you currently build your delivery routes

It is interesting to have a team dedicated to the current road creation process. However, this workload converted into hours can be enormous and is not always the most optimal way to build delivery routes. We recommend that you compare your operating time costs versus the acquisition of a TMS, as you may be surprised at the return on investment of such a purchase. Furthermore, there are accessible solutions on the market that meet the needs of all sizes of businesses.

5. What is the average delivery cost per order?

The average delivery cost per order is an important performance indicator for your distribution department. Indeed, a low average cost means that your trucks and routes are optimized. This allows you to gain a better profit margin on sales and to be more aggressive in the market by offering lower prices.

Thanks to the preliminary study discussed in the previous point, it is also possible to determine your current average delivery cost. This metric is based on your operating costs and the capacity used by your trucks. Once these values are defined, it is easy to estimate the potential gains from an optimization of your trucks.

6. What is the satisfaction rate of your customers (internal and external) with your deliveries

The TMS software solution is not really a tool to manage customer satisfaction, but there are modules, specific to certain solutions, which can considerably improve customer satisfaction. Indeed, this module allows to have an automatic communication to the customers. It is therefore possible for the software to send a text message or an email (based on the GPS information of the truck) announcing the arrival of the goods. In addition, if something unexpected happens on the road and the truck is likely to arrive outside the time slots planned for the customer, it is possible to notify the customer automatically.

Key takeaways

Here are three important things to keep in mind if you are considering implementing a TMS system in your company.

At C2.0, we have helped several companies structure their transportation and distribution operations. We are there to support the client at all levels of the TMS integration process. From the identification of solutions relevant to their needs, to the integration of the system into the company. Our expertise extends to several solutions such as: