TMS vs. ERP for Transportation Management

TMS ERP integration aligns all your management tools so you can make maximum use of information to drive your business.

This article explores TMS vs. ERP and how the transportation management capabilities in ERPs typically lack the functionality needed to manage shipment execution, logistics, and transportation. Read on, and you will quickly understand the compelling need for TMS ERP integration in your business.

Over the past 30 years, Enterprise Resourcing Planning (ERP) systems evolved into large-scale platforms at the foundation of most modern businesses. The ERP is a nearly ubiquitous system thousands of organizations use to manage business information, providing a high-level view of company activity and performance. While ERPs are great at managing core business functions, a TMS is often needed to keep pace with complex transportation models in an increasingly challenging supply chain environment.

Transportation Capabilities: TMS vs. ERP

There is confusion among buyers when it comes to selecting the right technology to support their transportation management activities. ERP system vendors often tout ERP systems as “one-stop shops” with a multitude of capabilities, including transportation management.

Unfortunately, mainstream ERP systems have noticeable and well-documented gaps in their transportation management function. Stand-alone ERPs traditionally fail to deliver the magnitude of organizational value demonstrated with a dedicated TMS.

A dedicated TMS enhances logistics optimization, provides real-time performance dashboards, enables better decision-making, and handles numerous tasks that ERP systems cannot address. There are four main reasons why integrating a stand-alone TMS and ERP allows you to enjoy the best of both worlds.

1) TMS Accelerates Implementation to Realize ROI Faster than ERP

Implementing an ERP requires a transformational undertaking and can cost hundreds of thousands to millions of dollars, depending on the complexity and size of the business. That’s why organizations often spend months developing RFP criteria and evaluating ERP vendor options.

After ERP system selection, the average implementation can take 14-21 months, with 75% of ERP implementation projects exceeding their initial timeline. By comparison, a TMS implementation typically takes 3 to 6 months. Simply put, faster implementation translates to faster ROI across the supply chain organization.

2) TMS Provides Visibility Across the Transportation Network

Companies seeking greater visibility into their transportation network are limited by static information within ERPs. Most ERP systems fail to provide real-time data on freight movements.

A TMS ERP integration alleviates this issue by linking shipment-level updates from the TMS with data directly in the ERP. As a result, logistics teams access control tower visibility over their shipments and the ability to manage exceptions proactively.

End-to-end visibility over every shipment in the network is critical to controlling freight operations and your inventory every step of the way. Dedicated TMS solutions deliver top-down visibility of individual shipments and bottom-up visibility of SKUs, going well beyond the capabilities of a typical ERP.

3) TMS Achieves Unrealized Value, Cost-Savings, and ROI

Considering that the average ERP implementation costs $9,000 per user and takes between 14 – 21 months to roll out, ROI on the system is likely years away. Conversely, 89% of companies implementing a TMS system reach their break-even point between months 6 and 18.

A TMS is specifically designed for your company’s unique logistics needs by facilitating an optimized workflow for operations teams. The TMS often relies on intuitive user interfaces that transportation experts can easily understand. Still, they can be configured to align with terms that other departments within the organization can understand and relate to as well.

This simplifies conversations between departments and helps ensure that larger business goals are kept at the forefront.

4) TMS Delivers Critical Transportation-Specific Functionality

An ERP and a TMS offer different and complementary benefits to an organization due to their unique functionalities.
The ERP is designed to manage overall business information, including finance, procurement, and inventory. The TMS ties into your entire transportation lifecycle, including details on carrier performance, rate bid optimization, and freight pay.
TMS also provides the ability to plan shipments dynamically, allowing organizations to pivot quickly in response to market disruption.

Calculate your potential Saving While Using an enterprise TMS

TMS ERP Integration: The Bottom Line

Integrating ERP and TMS solutions offers the most comprehensive functionality to ensure supply chain continuity and faster ROI.

In addition to reducing direct freight costs, a TMS increases customer satisfaction, improves supply chain visibility, and enhances operational efficiencies. A TMS ERP integration improves daily workflows for logistics teams and other departments that rely on accurate, real-time transportation data.

An ERP and TMS integration delivers the best technology infrastructure to leverage data from both systems. As a result, your total organization gains greater visibility to ultimately drive better, faster decisions that allow you to keep pace with modern commerce.

To learn more about the capabilities of an ERP and TMS combination, download the white paper, The Case For ERP and TMS Integration: 4 Reasons Why ERP Fails Transportation Management. Read it for research results that reveal why ERPs alone aren’t enough to manage your transportation requirements.

Learn about TMS and ERP integration in our white paper.


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