Transportation Management Software Development: Everything You Need to Know
Global TMS market value will reach 4.9 billion by 2025 and it will be almost double the market value in 2019. The reasons for such rapid growth include automation of supply chain transportation activities by most shipping & logistics businesses. Yes, transportation management software can be an absolute game-changer for your business. It helps you optimize supply chain transportation, cut down transportation costs, and improve customer service greatly.
Not using a quality transportation management system (TMS) software may result in you falling behind the competition in the logistics industry. Having a logistics management software helps you handle complex transportation networks with ease. But, most small businesses struggle when it comes to building TMS. If you're facing a similar problem, we’ve got you covered.
This guide will provide you with a comprehensive overview of logistics software development.
So let’s get started:
What is Transportation Management Software?
According to Wikipedia, transportation management software is a part of supply chain management, focusing primarily on transportation-related operations. Businesses use TMS to plan, execute, and optimize the movement of incoming and outgoing goods. TMS is often used as a standalone system or as a module of the business enterprise resource planning (ERP) systems for handling shipment-related activities.
Why Use a Transportation Management Software
Having quality enterprise software solution for managing transportation activities can benefit your business immensely. Below are some reasons to use transportation management software in your business:
Cut Down Transportation Costs: TMS takes care of the whole shipping process - from planning the route to shipment delivery. This helps you minimize costs for transportation administration tasks. Custom clearance, document verification, and workflow facilitation - all get done smoothly with TMS in place.
Reduce Manual Errors and Automate Workflow: A TMS lets you automate freight payment and auditing process, hence, it reduces the chances of manual errors. It also ensures better coordination between logistics teams during contract management, freight settlement, and more.
Improve Supply Chain Visibility: Both on-site and cloud-based software for transportation management lets you track shipments in real-time, thereby offering better control and visibility into logistics management.
Improve Inventory Management: TMS also assists you to manage your inventory operations (e.g. order management, accounting, etc.) by providing exact updates about shipments.
Key Functions of Transportation Management Software Applications
An efficient TMS can reduce your workload and optimized workflow greatly - whether you are shipper, 3PL, or a carrier. The important thing is choosing a system that matches your business requirements or processes. So, always choose a logistics management software that is tailored for your business.
A TMS can be used typically for performing the following tasks:
- Freight Settlement
- Contract Management
- Shipment Planning & Cargo Tracking
- Logistics Performance Monitoring
- Financial Reporting and analytics
- Managing Unforeseen Logistics Events
- Online Driver Support
Transportation Management Software: Build Vs Buy Decision
Most shipping & logistics solutions vendors offer custom TMS nowadays. So, you really need to think about whether you need to build a TMS in house and invest your valuable time and resource over it.
Your build or buy TMS decision should be based on the following things: your operational needs, long-term business goals, logistics team challenges, culture, and internal processes. Overlooking any of the given factors can lead to the development of a TMS that’s totally unfit for your business.
Other things that you should consider include:
Budget: Analyze hidden TMS costs in both cases. In the case of readymade logistics solutions, licensing fees, subscription fees, annual maintenance, training, etc. can occur. So, choose a solution that’s less expensive, if you’re on a tight budget.
Data Security: Any technology security loopholes in software can cost your business greatly. Poorly protected data storage systems are a great threat. So, when building in-house software, make sure you have an expert data security team.
How to Build a Transportation Management Software
Step 1: Analyze Business Requirements and Manage Expectations
Before you proceed with TMS development, analyze your business goals, employee expectations, and existing processes carefully. Often ready-made existing TMS solutions are available in the market that doesn’t match with your unique needs. So, stretch out the exact features or modules you need in your TMS after analyzing existing logistics processes, employee needs, goals, and more.
Step 2: Choose a Reliable TMS Software Development Vendor
It’s important to work with a reliable and experienced TMS solution that provides the company to get your desired solution. Also, when choosing the vendor to keep an eye on the following aspects:
System architecture design: Make sure you choose open architecture design so it’s easy to implement new features or technology in the future.
Scalability: The system is flexible enough to fulfill demands as your business grows.
Integration: Confirm the system has a Flexi integrator mechanism so it can work with multiple third-party services seamlessly.
Security: Multiple encryption and data security methods exist to prevent any data breach incident.
Step 3: Decide Between On-premise and Cloud Delivery Model
Modern shipping & logistics software vendors offer cloud and on-premise delivery options. So, you need to decide the preferred deployment option. The on-premise installation often requires an additional investment in infrastructure and system security. Cloud-based apps or software are best in today’s day and age.
Most big manufacturing and logistics companies prefer cloud deployment as its comparatively cheaper, secure, and offers real-time control. Again, your choice should be based on the performance needs of your business.
Step 4: Finalize System Modules or Functionality
After deciding the development strategy, vendor, and deployment method, you need to finalize the modules that will part of your software:
Most popular modules in TMS include:
- Contract Management
- Freight Management
- Reporting and Analytics
- Integration with CRM, WMS and SCM system
Step 5: Mobile App Support
Having a solid transportation and logistics app is a must for businesses to get real-time updates about shipments. It allows all the supply chain participants to stay connected and exchange data at any time, anywhere for making quick decisions and mitigating risks. So, you must consider building an app alongside the TMS system to ensure seamless logistics delivery and exceptional customer service.
Step 6: System Testing
Once the TMS software development gets over, it’s important to perform quality testing in a real-time environment to trace any bugs or functional errors. It also helps you analyze system performance and compatibility with your existing systems or process. Don’t forget to hire quality assurance experts at his stage for better results.
Common testing methods for TMS include
- Unit Testing
- Installation Testing
- Integration Testing
- Regression Testing
- Acceptance testing
Step 7: Deployment and Launch
Finally, at this stage, your system gets ready for deployment after getting approval from QA teams. Make sure to organize workshops and training programs for your logistics staff so they can familiarize themselves with the new system. Also, ask for training videos, user manuals. FAQs, and other useful system information from your vendor.
Cost to Build Transportation Management Software
TMS software development cost ranges between $200k to $400 depending upon the unique needs and requirements of each project. The key factors that affect the final cost of TMS include system functionality, technical complexity, UI/UX design, quality assessment, and app support.
Ready to Receive a Tailor Made TMS Solution for your Business?
Hope the above guide has provided you with a detailed idea about TMS software and why it’s imperative in modern logistics and transportation. TMS is getting handier and cheaper for supply chain businesses. The overall cost to build TMS software ranges from $200 to $400k, depending upon your unique needs. If you are looking to get one for your transportation needs, connect with us here at A3logics.
We are among the best shipping & logistics software solution providers across the globe with 5-star client reviews across top platforms. Our engineers hold deep expertise in TMS software development and can build a solution that fits right into your business.
Drop us a line to discuss your project ideas and get an exact quote. We promise nothing less than quality TMS solutions at the best prices.