What Is Transportation Management System ROI? How to Evaluate When TMS Pays Off

What is Transportation Management System ROI - Woman with Computer

Implementing an efficient transportation management system is a great way to streamline all digital freight management and supply chain operations. But simply setting up a plan and letting it run will not provide the results supply chain managers want and need. It takes constant monitoring and routine evaluation to ensure everything is working as it should. This remains the most effective and efficient way to ensure ROI remains maximized and that a TMS pays off in the short and long term.

Unlocking the Effect of Transportation Management System on Supply Chain ROI

A transportation management system is essentially one of many components that make up the modern-day supply chain network. Its management and resource planning system can allow for effective monitoring and control of various supply chain components. Using a transportation management system, supply chain managers and logistics directors can unlock the network’s full potential. These benefits include optimizing daily processes, data-driven decision making, optimal routing and load building assistance, and enhanced shipper and carrier management. Additional services include access to more reliable procurement methods, improved network collaboration, and streamlined methods implemented by AI machines or automated processes. These benefits can tie back directly to ROI and can have a tremendous impact on bottom-line profits, expenses, and income levels throughout the transportation network.

Don’t Overlook the Need to Evaluate Systems to Ensure They Are Profitable and Adding to Overall Growth

When things seem to be progressing well within the supply chain, the temptation often arises to leave well enough alone and not look too deeply at data and statistics. However, this is a significant mistake for supply chain managers to make. Routine evaluation and review are imperative for a successful transportation management system. Data must be collected and analyzed and then reviewed to be applied to the network’s operations practically. Implementing real-time data tracking and analysis, automated dashboard communications, up-to-date market trend monitoring, and similar system tracking and monitoring systems remain the best way to maintain a competitive advantage.

Points to Consider When Monitoring the System Performance Rates

Boosting productivity and ensuring proper platform utilization will help guarantee maximum ROI. According to Bart De Muynck, Gartner Supply Chain Expert, many transportation service providers can see a 5% to 10% productivity improvement by successfully utilizing the full suite of software and capabilities available in today’s transportation management systems. Yet, it’s possible to derive even greater value from the platform and eliminate risks. Ultimately, some pitfalls need careful observation and monitoring as they could derail the process, which is why routine evaluations are essential for operational success. Here are a few critical points to consider when monitoring and evaluating performance with the transportation management system.

The goal is to grow and expand the network, but it requires implementation at a sustainable rate and in a controlled manner, and that is where the balance between integration and maximum ROI comes into play.

Calculate your potential Saving While Using an enterprise TMS

Ensure Continued Growth and Success Within any Volatile Market With a Sound Transportation Management System Platform

Companies interested in automating and optimizing management processes should examine current trends and income/expense ratios and see how their current platform performs. Resources are available to help shippers and carriers implement the most effective transportation management system that can work within their existing capabilities. Logistics managers and freight management directors can determine what level of savings they could expect to capture by applying transportation management system controls to automate and streamline daily functions within the supply chain. In the end, the goal is to secure future growth and success while maximizing investment returns, even during volatile markets. See the value a TMS can provide your organization. Try our self-service value calculator to learn more about how you can increase visibility and derive a greater ROI today.

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Phil Melton
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