Transportation is usually defined as the mobility of people, goods and animals from one point to the other. There are several different modes of transportation including air, railway, roads, cables, water, space and pipelines. They can further be categorized into vehicles, operations and infrastructure. Transport is an integral part of logistics since it enables trade between different individuals and organizations. Transportation has played a role in the formation of civilizations in past by allowing the tribes to trade and communicate.
In the industrial context, logistics is defined as the science and art of producing, obtaining and distributing the products to the proper place in reasonable quantities. This definition of logistics has been proposed by the council of supply chain management professionals (CSCMP) and includes outbound, inbound, external and internal movements.
By looking at the definitions of transport and logistics given above, it is clear that transport and logistics management is not the same thing. Transportation acts as the driving force of logistics, but logistics is the product of transportation. Both depend on each other and work simultaneously to play an important role in business and trade. While logistics require deliberate planning, transportation acts as the medium to implement that plan. Transportation is simply moving the items from one location to the other but logistics include:
- export and import of regulations,
- damage claims
- Collaboration with other professionals in the supply chain management
- Managing partners and vendors
- Mitigation of risk and expenditures
All these matters are to be taken care of by the logistics management executives. The procedures mentioned above cannot be performed by logistics management software as they require strategy and communication. This realization is important for both the large and small scale businesses. So, it is important not to see the logistics management software as an end to the management requirements. An executive faces various problems during the management of logistics that he needs to resolve. These troubles are beyond the transportation management and procurements usually offered by the software. By letting the expert provider handle the logistics, who will not only offer the software but will also deal with claims, accounting and custom management system programs; an executive will be able to have meaningful interactions with the workers in supply chain management and company at large.
By utilizing the services of an experienced logistics management professional, the head of the business becomes more focused. It allows the executive to actually focus on the results and strategy for further optimization of the business instead of focusing on small details and complexities of logistics management. With a keen focus on results and assistance of a trusted professional, it becomes easier to realize costs and savings quickly and efficiently.
Transportation management system
Transportation management system is a sub part of the supply chain management. It is concerned with the transportation operations. TMS fits between ERP or warehousing module and legacy order processing. It includes both the outbound and inbound shipping orders that are to be evaluated by the planning module of TMS which also offer the customer various other routine solutions. There are several functions of transport management system which include:
- Planning and optimization of transport rounds by land
- Selecting the appropriate transportation provider
- Managing internal and external transport
- Management of air, motor carrier, rail or by sea transport according to the requirements
- Transportation tracking real time
- Quality management of services by key performance indicators
- Route optimization and vehicle load
- Scheme simulation and transportation costs
- Shipment of orders in batches
- Cost control, reporting and statistics
- Freight Auditing
The transport management department works in collaboration with -- but separately to the logistics management department. It rather functions as a part of logistics management as a whole.
Logistics management system
As mentioned earlier, The Logistics management system not only deals with transport but also requires deliberate planning and implementation of the plans.
The importance of Logistics management system in business:
Logistics management system benefits from freight management, load creation and optimization, carrier and mode selection, freight audits and rating, tendering of load and real-time logistics. Logistics companies that utilize software along with the workforce have a competitive edge over their rivals, as the software allows them to deal with cost pressures successfully. The expenditure problems may include the rising costs of fuel, increased load resulting from the increased customer demand and the trend of shipping smaller dispatches more frequently. This trend increases customer satisfaction by making small, frequent and timely delivery of the goods.
Benefit of logistics management system:
Freight management software enables the administrator to track if the driver is going by a correct route, the brake usage and speed of the vehicle. This allows the company to implement crucial measures to prevent excessive fuel consumption and depreciation of a vehicle. The software can also evaluate wear and tear of a carrier so that the company can arrange the spare parts in advance. The reports on vehicle efficiency and driver’s performance by vehicle tracking system caused the staff to become more competent with a noteworthy decrease in accidents and complaints from the customers.
Limitations in logistics management system:
It all depends on how much the executives are willing to put in a business in terms of capital and effort. The transportation may or may not be limited to the on-road commercial vehicles. As the business expands, the railway, ship and air cargo delivery systems are established. Just like there is software available to monitor the condition of a vehicle, software to monitor the air cargo, ship and rail condition is also available. Often times there is a special section in the transport department of the company that looks at the physical condition of the vehicle before dispatching the goods and keeps an eye on the route the driver is taking.
Logistics management with proper usage of software, work force and other tools paves the way towards success and enhances the customer satisfaction leading to expansion of the business.