How modern TMS solutions are transforming logistics operations for shippers

Written by Rohit Lakshman | Oct 29, 2024 5:00:00 AM

An AI-first TMS offers advanced features that can streamline your operations, saving shippers both time and money.

If stakeholders from the 1960s logistics and supply chain sectors could witness the wizardry of today's AI-first transportation management systems (TMS), they might have wished for a time machine back in the day!

While the older, more cumbersome TMS technologies certainly laid the groundwork, there's broad agreement that today's systems are vastly more efficient in both cost and time.

Modern TMS has changed logistics from a clunky, manual chore into a streamlined, automated process, enhancing scalability and agility. Equipped with real-time data analytics and predictive insights, these contemporary TMS software offer various benefits to shippers and enable companies to make well-informed decisions, improving service delivery and cutting overhead costs.

From clunky to cutting-edge: The case for AI-first TMS for shippers

Although your older generation TMS may still function, an AI-first TMS shipping solution offers advanced features that can streamline your operations, saving shippers both time and money.

Here is an overview of how legacy TMS and new AI-powered TMS differ:

Feature/aspect	Legacy TMS (Old-school solution)	Modern AI-powered TMS (Modern solution)
Procurement	Uses a generic procurement tool for freight sourcing.	Intelligent freight procurement leverages AI by automating freight matching, analyzing vast datasets for demand forecasting, optimizing contracts and carrier modes, streamlining procurement tasks, and providing real-time performance insights.
Transportation planning and execution	Limited functionality, often requiring manual processes.	AI-driven automated transportation planning and execution optimizes routes, predicts disruptions, and enables real-time monitoring, reducing manual errors and costs. It enhances efficiency through predictive maintenance and streamlines decision-making using traffic, weather, and GPS data, improving delivery accuracy and boosting customer satisfaction with precise execution.
Freight audit and payment	Outsourced to a third-party service provider.	Automated freight audit and payment within a TMS system leverages AI to streamline invoice processing, validate data, and detect anomalies. This integration reduces manual errors, speeds up invoice verification, and ensures compliance with contracts and regulations.
User Interface (UI)	Archaic interface with limited functionality and customization.	Modern GenAI-powered user experience (UX), customizable apps for shippers, drivers, carriers, etc.
Data utilization	Basic data reporting is often siloed and not easily accessible.	AI-driven data insights for predictive analytics and real-time decision-making.
Technology stack	ERP-based, often outdated, and difficult to integrate with other systems.	An end-to-end solution that seamlessly integrates procure-to-pay processes.
Adaptability and flexibility	Rigid and difficult to scale or customize.	Highly flexible, scalable, and adaptable to changing business needs, with AI learning and improving over time.
Route optimization	Limited or manual route planning.	AI-driven route optimization, vehicle assignments, and load balancing for efficiency.
User experience (UX)	Complex and non-intuitive, requiring significant training to operate.	GenAI-driven, intuitive UX with applications designed for various stakeholders (shippers, drivers, carriers, etc.).
Mobile access	Limited or no mobile functionality.	Full mobile access through apps, enabling real-time communication and updates for all stakeholders.
Automation level	Mostly manual processes, leading to inefficiencies and human errors.	High level of automation across transportation management processes, reducing errors and improving efficiency.

The benefits of shifting from legacy TMS to AI-driven solutions

Transitioning from legacy TMS to AI-driven solutions benefits your businesses. Here is how a modern solution can help with cost reduction, flexibility, scalability, and competitive advantage:

Operational costs: Sticking with an outdated TMS can lead to significant, up to 30% higher operational costs due to inefficiencies. Legacy systems often require more manual input, which slows down processes and increases labor costs for shippers. Unlike traditional on-premises systems, modern TMS models for the shipping industry operate on a subscription-based approach, reducing the need for large upfront investments in IT infrastructure. This can be particularly beneficial for enterprises and mid-market companies that want to access advanced TMS capabilities without the hefty price tag.
Moreover, with manual processes, the chances of errors can further drive up costs and reduce productivity.
Flexibility and security: In contrast, a modern TMS offers the flexibility and accessibility that your business needs. Your teams can access the modern TMS from anywhere, at any time, facilitating better collaboration across departments and with external partners.
Remote accessibility, combined with the solution providers' security protocols, ensures that your data remains both accessible and protected. AI-powered TMS benefits like automatic updates and disaster recovery enhance efficiency and also future-proof your supply chain operations against unexpected challenges.
Competitor advantage: On the competitive front, the drawbacks of relying on a legacy TMS are clear, such as a cluttered user interface that complicates navigation and slows down productivity, as well as siloed insights that prevent seamless data sharing across departments, limiting visibility and decision-making capabilities. Your competitors have adopted advanced, AI-driven TMS solutions and can respond more quickly to market changes, optimize their operations more effectively, and offer superior customer service.
Take DHL, for instance—they’ve implemented AI-driven logistics, enabling them to provide faster and more reliable deliveries. With AI in logistics, shippers can cut their shipping time by up to 20% compared to outdated systems.
Scalability: Legacy TMS systems often struggle to keep pace as businesses grow, leading to operational bottlenecks that hinder scalability and stifle growth. This inability to scale efficiently results in missed revenue opportunities and rising maintenance costs, which divert resources from innovation. In contrast, AI-powered TMS solutions offer seamless scalability, easily handling increased data volumes and transactions without compromising performance. For example, large retailers rely on modern TMS to manage complex supply chains and scale effortlessly during peak seasons like Black Friday, enabling smoother operations and maximizing revenue potential.
Lack of real-time visibility: Old-gen TMS solutions often lack the real-time visibility and advanced analytics that modern customers expect. Today’s customers demand transparency, real-time tracking, and faster delivery times—features that older systems may be unable to provide.
SVP of Global Supply Chain at Accuride, explains how the company overcame challenges like manual tracking inefficiencies and lack of real-time visibility by implementing Pando's system. The solution provided real-time container visibility and automated freight auditing, addressing customer demands for transparency and significantly improving operations. This digital transformation resolved logistical issues and led to substantial cost savings and a higher ROI, demonstrating the benefits of modern TMS solutions over old-generation systems that lack these capabilities.
AI-powered optimization: AI-powered features like predictive analytics and automated route optimization allow businesses to make more informed decisions, reduce costs, and improve service levels.
You can use AI-driven TMS to optimize delivery routes, resulting in faster deliveries and reduced fuel consumption. The ability to use AI for real-time visibility and predictive insights means you can respond more swiftly to market changes and disruptions, keeping your supply chain agile and competitive.

Seamlessly transition to a modern TMS: Your step-by-step guide to success

Now that you know how pivotal shifting from a legacy TMS to an AI-first solution can be for your business, it is time to plan for it. Here’s a step-by-step guide to help you navigate the process smoothly.

Evaluate your current system and identify gaps: Start by taking a close look at your current TMS. Understand its limitations and how it’s holding back your business. Identify the specific needs that a new TMS for your logistics business should address, like better scalability, real-time data access, or improved integration with other systems.
Set clear objectives: What is it that you want to achieve with the new TMS? Are you looking to boost efficiency, cut costs, or enhance customer service? Make sure these goals align with your broader business strategy and future growth plans.
Build a business case: Building a business case to invest in a TMS involves aligning the investment with organizational goals, highlighting potential returns, and ensuring operational efficiency. Key components to emphasize include reducing transportation costs, increasing freight audit accuracy, and managing the Total Cost of Ownership (TCO). Addressing the hidden costs of sticking with legacy systems, such as inefficiencies and overpayments, is crucial.
In the second phase, focus on overcoming challenges like resistance to change and integration complexities. A successful business case should outline vendor selection criteria, including system scalability, ease of integration, and security.
Choose the right TMS solution: The good news for you is that there are loads of TMS vendors in the market, so you will find the one that is perfect for your business. However, you must be careful when choosing one. Thoroughly research shipping TMS solutions and look for one that is user-friendly, scalable, and offers strong integration capabilities.

You should also look at customer and other reviews about the vendor and look into their support services. Don’t hesitate to ask for demos (Pando offers one!) or trial runs to see how each option performs in your environment. It’s also a good idea to gather input from key stakeholders across different departments.
Ensure smooth integration: Make sure the new TMS will integrate seamlessly with your existing systems, like ERP, CRM, or WMS, to avoid creating data silos. Utilize APIs and middleware to enhance integration and functionality.
Implementation to value realization: To ensure a smooth transition from implementation to value realization, start by conducting thorough testing in a controlled environment, and simulating peak load conditions to ensure the TMS can handle high transaction volumes. Involve end-users in acceptance testing to ensure the system meets their needs.
Next, provide comprehensive training and ongoing support tailored to different user groups to help them adapt to the new system. Finally, carefully execute the go-live plan, keep stakeholders informed, and continuously monitor the system’s performance post-launch to make necessary adjustments for optimal effectiveness.

Although generic, these steps will help you transition from a legacy TMS to a modern solution smoothly.

Get next-level efficiency with Pando TMS: AI-driven, seamless, and scalable

No matter the size of your organization or the industry you are in, if you need a transport management solution for your logistics operations, Pando TMS is the way to go. It is a powerful AI-driven solution that offers seamless integration and real-time visibility, all designed to optimize supply chain efficiency.

If you're seeking to streamline your logistics operations, Pando TMS is your ultimate solution. With AI-powered optimization, it automates route planning, demand forecasting, and inventory management to boost efficiency. Real-time visibility keeps you informed of shipments and inventory, enabling smarter decision-making. Its seamless integration with ERP, CRM, and WMS systems ensures effortless connectivity, while its scalability supports your growth without disruption. Plus, a user-friendly interface guarantees quick adoption, making Pando TMS the perfect partner for your evolving supply chain needs.

Want to know how Pando’s TMS fits within your goals and requirements?

Request a demo today!

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