Logistics Software is the technology that lets shippers automate their logistics and supply chain workflows. Many small and medium size companies are in a difficult position because their shipping volume does not warrant a big investment in a large supply chain software solution. The Return on Investment is just not there for some shippers when the cost of entry for a large managed TMS system will easily exceed $100,000 on the low end.
So what do the large Logistics Software solutions provide for the big companies that can afford them? Primarily, the system automates the flow of information through the organization, as well as automates much of the communication between departments and supply chain vendors. For instance, as a normal process, most companies that ship product will receives orders and need to make decisions on how the orders will ship. For the company with logistics software – the orders are optimized into the most efficient Load Plan, carrier selection is made via the prepared Routing Guide, and loads are tendered and delivered with all the relevant data captured and reported on. For companies without a supply chain software solution, all these parts of the process are handled manually, or not at all. For instance, not having Bill of Lading Software a shipper obviously has to hand write or type of Bills of Lading. Shipping Software also automates the selection of carriers and the communication process with the carriers. Instead of phone calls or faxes to schedule loads, carriers can confirm or reject loads through email or on-line. Carrier rate contracts are all managed in a single database, ensuring the correct carrier selection is made every time. Delivery updates, Proof of Deliveries, Freight Invoices can all be provided electronically.
Simply stated, the benefit of the right logistics software solution is that it takes processes that in the past were done manually and automates them. The difficult challenge for shippers is to evaluate the Return on Investment from implementing a new transportation management software solution. The system will save time, it will save money by improving carrier selection, it will make the process of getting delivery updates and POD’s quicker. – but is the cost too much?