BY BEN AMES, SENIOR EDITOR

TMS
technologyreview

A TRANSPORTATION MANAGEMENT SYSTEM (TMS) is a crucial tool for controlling the costs of moving goods. Designed to automate the transportation component of the supply chain, this powerful software enables large companies to manage scheduling, routing, carrier oversight, load tendering, and consolidation all in one place, making the shipper more efficient and accurate, according to the industry group MHI.

However, many small and medium-sized businesses (SMBs) say this full range of capabilities represents a bigger toolbox than they need or can afford. In response, TMS vendors have started offering simpler, streamlined, less expensive options crafted for these users. The change has come just in time, as global-ization and e-commerce are opening new markets to SMBs, allowing them to work with suppliers and customers around the world.

BIGGER MENU FOR SMALL SHIPPERS

Until now, SMBs that were unable to afford or maintain an enterprise TMS platform were faced with a stark choice: either manage their operations with a rudimentary in-house TMS or partner with a third-party logistics service provider (3PL) that could provide one for them.

“It used to be that shippers would choose to partner with a 3PL for greater expertise or pick a TMS to use within their own four walls if they wanted to own the data and integrate it with their own ERP [enterprise resource planning] or WMS [warehouse management system],” said Daniel Vertachnik, chief sales officer at supply chain software developer Kewill PLC.

But the marketplace is starting to change. Kewill recently made waves in the supply chain software segment when it acquired rival TMS provider LeanLogistics, a move that some saw as a case of a pure-play technology provider seeking to defend its turf against the 3PLs that are bringing proprietary software solutions to a broader market.

The merger is also an indication that vendors are looking for ways to expand their product portfolios in order to offer more options and serve a broader range of customers. That larger menu of options often includes versions tailored to different software delivery models.