ERP + TMS: The Best of Both Worlds
Does your business need a Transportation Management System (TMS) or an Enterprise Resource Planning (ERP) system? For supply chain managers, the answer to this question is increasingly becoming “all of the above.”
Over the last 30 years, Enterprise Resourcing Planning (ERP) systems have evolved into large-scale systems that form the foundation for most modern businesses. The ERP is a nearly ubiquitous system used by thousands of organizations to manage business information, providing a high-level view of company activity and performance.
However, mainstream ERP systems have noticeable and well-documented gaps in transportation management functionality and have often failed to deliver the magnitude of value demonstrated with a dedicated TMS system.
New study highlights importance of a TMS with an ERP
A study by Ohio State University’s Jim Hendrickson reported 86 percent of the respondents believe their ERP needs to be supplemented with other supply chain execution automation. In fact, the report mentions that an external TMS solution is most often cited as the system needed to augment the ERP software. A dedicated TMS helps in enhancing transportation efficiency, providing real-time dashboards, enabling better decision-making, and handling numerous tasks that cannot be addressed by ERP systems.
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An ERP and TMS compliment each other’s strengths
Working together, an ERP-TMS combination can help form the best possible technology infrastructure to enable you to leverage data from both systems, gain greater visibility, and to ultimately drive better, faster decisions and keep up with the speed that modern commerce demands.
A TMS integrated with an ERP has the best of both options without their downsides. Even though reducing freight costs is a standard value proposition for TMS, there are many other forms of direct and indirect ROI that such solutions present, including higher customer satisfaction, improved supply chain visibility, and enhanced operational efficiencies. When you carefully consider all of the people involved in managing the daily workflow and how it will improve their effectiveness, the time and money spent on a robust transportation management platform will pay off on several fronts.
Business needs change and the rigid transportation processes in the ERP inhibit growth of the organization. On the other hand, the dynamic TMS solutions of today allow rapid change of the transportation model enabling the business to adapt and grow. A dedicated TMS stands as the only “one-stop” shop for real-time visibility of shipments across trading partners, and across the breadth of the supply chain, putting you in control of your business.
The article originally appeared in the March 30, 2017 edition of Logistics Viewpoints, a publication of the ARC Advisory Group.