Is it time to implement a TMS? When and how to prepare

Just a few years ago, TMS systems were seen as tools for large transport and freight forwarding companies. With the development of the transport market, increased competition, and rising customer expectations, TMS systems have become standard even in small and medium-sized transport companies. The reason is simple: with a growing number of orders and cost pressures, manual transport management is no longer efficient. In such circumstances, many transport company owners ask themselves whether the time has come to implement a transport management system. The answer is not black and white, but there are clear signs indicating that continuing to use Excel may cost more than implementing a TMS.

TMS as a solution to real problems within the company

Firstly, it is worth noting that a TMS is not merely an add-on to a company’s operations that helps tackle a few problematic tasks. On the contrary, it is a tool that organises the entire daily workflow, particularly in those areas where the growing scale of operations is beginning to cause issues such as errors and delays.

In practice, a working model without a TMS relies on several tools:

• spreadsheets, emails and paper documentation as sources of data on the company’s operations,
• telephone and email for contacting customers and drivers,
• additional software for record-keeping, such as word processors, invoicing and accounting software.

Furthermore, some processes rely on the individual knowledge of employees, which poses a problem if such an employee goes on holiday, takes sick leave or leaves the company.

Meanwhile, a TMS system allows for the collection and processing of all key information within a single tool, as well as the integration of this system with specialist software (e.g. accounting programmes) or GPS telematics. Thus, the biggest change does not concern technology, but the way of working, which becomes more organised, predictable and measurable. 

First warning sign: loss of control over the company’s day-to-day operations

One of the most common situations leading to the decision to implement a TMS system is when the owner loses a full overview of the company’s operations.

What might the symptoms of this situation be?

• It is becoming increasingly difficult to quickly check the status of an order
• Data is stored in various files and systems
• Reports are generated based on incomplete or out-of-date data, or with a delay.

This situation leads to more serious problems, such as: incorrect business decisions, a lack of control over costs, or difficulties in responding to changes.

The solution in this case is data centralisation, i.e. collecting data in real time in a single location. This allows you to quickly and effectively ascertain the status of orders, determine current operating costs, and make informed decisions based on automatically generated and updated reports.

Second sign: the company’s growth is starting to cause chaos

Although an increase in the scale of operations is a sign of success, it often reveals the company’s weaknesses and its limited resilience to increased demand for services.

A higher number of orders means:

• more phone calls and emails,
• a higher risk of errors,
• an increasing workload for the team,
• less time for tasks other than order processing.

At some point, the company faces a dilemma: whether to serve a larger number of customers by hiring more staff. However, demand in the industry is seasonal, so it may turn out that during quieter periods, these additional staff will only generate costs. 

The solution is to improve efficiency through TMS, which changes this dynamic. Automating repetitive tasks, such as order import, route planning or transport monitoring, allows you to scale up your operations whilst maintaining high operational efficiency.

Third warning sign: lack of knowledge about order profitability

This is one of the most underestimated problems in the transport industry. It stems from the belief that since handling orders generates profits, there is no need to analyse them further. However, there may come a time when orders generate higher costs than revenue, and the company then becomes unprofitable.

What might be the cause of this problem?

• Some orders are unprofitable
• Some customers generate losses
• Order processing costs are underestimated

Without a TMS system, a detailed profitability analysis is time-consuming and prone to errors. Meanwhile, the system allows for the automatic collection of cost and revenue data from invoices, which, once processed into a suitable report, enables the analysis of order profitability. This makes it possible to discontinue certain types of orders or stop serving customers who generate losses, and instead acquire more customers who offer higher margins – based on hard data from orders.

Why do companies delay implementing a TMS system?

Despite clear signals coming in daily from the company, the decision to implement a TMS is often put off. The reasons are usually similar.

The first is the belief that implementation will be complicated and time-consuming. In practice, however, cloud-based transport management systems, such as fireTMS, are designed so that you can start using them very soon after deciding to purchase them.

The second reason is concern about staff reaction. Changing tools means changing habits, which naturally meets with resistance. However, in most cases, staff quickly come to appreciate the simplification of their work. This is particularly true when the system eliminates repetitive and time-consuming tasks that must be performed manually (such as importing orders or route planning).

The third is the cost of purchase and implementation. However, it is worth viewing such an investment in the context of the losses resulting from the lack of a system: recurring human errors, low efficiency which affects competitiveness, and lost orders.

How to prepare effectively for the implementation of a transport management system

The success of a TMS implementation depends not only on the choice of system, but above all on the effective organisation of the process.

The first step should be an analysis of current processes. This is not about creating complicated diagrams, but about understanding how work actually operates within the company and where delays, errors and time-consuming tasks most frequently occur.

The second step is to define the objective. Implementation for image-building purposes rarely yields the expected results. Therefore, objectives must be clearly defined, e.g. reducing order processing time, increasing the number of orders handled or transport operations, or improving profitability. This allows the real value of the system’s implementation to be measured regularly.

The third element is employee engagement. Involving them in the process of testing and selecting the tool significantly increases the chances of it being well received, of all its functions being utilised, and of the set objectives being achieved.

Implementation in practice: faster than you might think

In the case of modern cloud-based systems, such as fireTMS, implementation is nothing like themulti-month IT projects commonly seen in large transport and logistics companies.

The implementation process usually looks like this:

• system testing,
• decision to purchase the system,
• account creation and basic configuration,
• staff training
• data entry, e.g. customers, vehicles, drivers, orders,
• starting work in the TMS system.

The key point is that the company does not need to suspend its day-to-day operations during this process, as such a system can be implemented gradually, transferring operations to the TMS in stages.

What changes after implementing TMS?

First and foremost, the business owner or managers gain comprehensive insight into the company’s data. Meanwhile, staff can save time by avoiding tedious and time-consuming tasks, such as entering orders or chasing payments.

This completely transforms both management and day-to-day operations:

• it is clear which orders are profitable and which to avoid,
• it is easier to plan work,
• staff carry out their tasks more efficiently,
• you can respond to problems more quickly,
• information chaos disappears.

It is also worth bearing in mind the economies of scale, as the company can handle more orders without a proportional increase in staff numbers.

Summary: is it time to implement a TMS?

A TMS system is becoming an essential tool for transport and freight forwarding companies. With this tool, it is possible not only to optimise specific areas but to completely transform the company’s transport management model. In this approach, the most important factors are comprehensive and up-to-date operational data and the ability to make rational decisions quickly.

So, if a company is growing but its owners or managers are beginning to feel the constraints of work organisation and chaos in order processing, if quick access to data is a problem and it is impossible to clearly identify where the company makes the most profit, then the time has probably come to implement a transport management system.

If you want to implement a transport management system, try the comprehensive fireTMS system, which will help with importing and processing orders, planning and optimising routes, monitoring transport, as well as invoicing and settling orders. Sign up for a free fireTMS account and take advantage of a 14-day free trial.