Transportation management system
A transportation management system (TMS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system.
A TMS usually "sits" between an ERP or legacy order processing and warehouse/distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions. These solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider. Once the best provider is selected, the solution typically generates electronic load tendering and track/trace to execute the optimized shipment with the selected carrier, and later to support freight audit and payment (settlement process). Links back to ERP systems (after orders turned into optimal shipments), and sometimes secondarily to WMS programs also linked to ERP are also common.
These systems have been offered with different types of licensing arrangements. The four main offerings are:
Additionally, some software providers were either acquired or merged with supply chain management consultancies and started offering shippers "blended" managed and software services as an outsourced process. Primary Tier 1 TMS providers are still independent, carrier and 3PL neutral, and ERP neutral. While ERP providers are moving to improve their on-premises transportation management offerings by adding TMS modules to their existing, implemented base, the advent of Software-as-a-Service or "SaaS" delivery resulted in a surge of emerging TMS providers.
Transportation management systems manage four key processes of transportation management:
Various functions of a TMS include:
However, all the above logistical functions need to be scrutinized as to how each parameter functions.
Several specific patents have been filed to protect the intellectual property rights of US TMS development corporations. However, judgments against several non-US software companies in 2009, 2010 and 2012 had not been unenforceable as of 2014[update].
The largest number of TMS patents were filed by IBM, SAP, Manhattan Associates, TheFreeTMS.com, Oracle, JDA, and Sterling. Each holds over 15 patents protecting various aspects of their technology.
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