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Transportation Management Software
Transportation Management Software
Transportation management software is a broad term. Large
shippers and carriers began developing transportation management
software in the 1960's when mainframe computers became more
widely available and affordable. Large LTL carriers such as
Roadway Express and Red Ball were pioneers in the field. It is a
little known fact that the freight industry created E.D.I.
(electronic data interchange) during this time frame. Early
transportation management software was custom built and run on
company mainframes at the large carriers and shippers. As with
so many other fields, transportation management software for
small or medium sized companies did not begin to materialize
until after the introduction of the I.B.M. personal computer in
1980. Transportation management software can be as simple as
software used to calculate point-to-point mileage or complex
enough to manage virtually all shipping functions of a carrier,
broker or shipper.
Modern transportation management software has standardized into
basic functional groups based on the needs of shippers and
carriers/brokers. Much of the available transportation
management software is sold with these functions as modules that
can be purchased separately. Which modules are purchased is
usually driven by the size of the company looking for the
transportation management software.
Transportation management software as applied to shippers can be
part of the much larger field of supply chain management or more
narrowly focused on supply chain execution. Supply chain
management can be defined as the application of information
technology to economic order quantity theory. It encompasses
virtually every function within a company that deals in tangible
products and is usually best preceded by ERP. Enterprise
Resource Planning is the company getting its data house in
order. It can then think in a more focused way about supply
chain management and execution.
Transportation management software as it applies to shippers is
most often associated with supply chain execution. The main
functional groups here are the preparation of goods for shipment
and the effective management of transportation vendors. The
preparation of goods for shipment is a function of warehouse
management software. The warehouse must stock the products that
will later be shipped, pick the products that have been ordered
and package or unitize those products for shipment.
Management of transportation vendors is an important function of
supply chain execution software. Shippers usually need a number
of vendors to cover their territory or find it beneficial to
have vendors competing for business. Vendor management software
uses objective measures to point out the best vendor for any
given shipment based on price and service accomplishment. The
best supply chain execution software allows for effective
communication with vendors throughout the shipping process.
Transportation management software as it applies to trucking or
broker companies has standardized into three basic functional
groups; dispatch operations, equipment management and
accounting. Much of the available trucking software is sold with
these functions as modules that can be purchased separately.
Which modules are purchased is usually driven by the size of the
carrier or broker looking for the trucking software. Very small
carriers and brokers can manage dispatch and or equipment on
paper. Accounting functions at this level are well served by
software packages such as QuickBooks or Peachtree. Carriers that
grow beyond 10 so trucks and brokers with 20+ loads per month or
can usually
begin to see the value of having one or more of the
transportation management software modules.
Transportation management software designed for the accounting
functions is the least likely of three to be offered as a
stand-alone product since it depends upon the others for data.
Payroll functions can be derived from dispatch operations data
such as which driver went where. Invoicing and receivables are
also derived from dispatch operations data as in which customer
sent what where. Equipment expenses are derived from equipment
management functions. Transportation management software
designed to integrate with the over the counter accounting
packages such as QuickBooks can ease the transition for many
small carriers and brokers.
Equipment management functions of transportation management
software revolve around fuel and maintenance costs. Fuel, tires,
periodic maintenance, and repairs are all important costs to be
managed by every trucking company. This type of software can get
very complex but is essential to larger carriers and can be a
good value to smaller companies. The availability of fuel cost
data on the internet has given carriers a new tool to manage
those costs as in where and when and how much fuel to buy.
Transportation brokers do not have these concerns.
Transportation management software designed for dispatch
operations is the most likely of the functional groups to be
offered as a stand-alone product. It is also arguably the most
important of the three functional groups. It is the most
important because it can have the greatest impact on customer
service. Freight brokers in particular should recognize that
this software can give them a competitive advantage. Equipment
management and accounting functions are internal; dispatch
operations touch every customer the carrier or broker has in one
way or another. Dispatch operations is all about keeping the
right drivers with the right equipment in place to services the
customers' needs and take advantage of opportunities that arise.
Managing those resources is important but the best dispatch
software also gives dispatchers and managers tools to monitor
work in progress and communicate effectively with customers.
The internet has given rise to two interesting new developments
in the field of transportation management software; software as
a service and networking as a new functional group. Software as
a service is delivered via the internet by subscription and has
the following advantages:
No large upfront investment as in traditional buying of
software. No new hardware costs. Your existing network, internet
connection and browser such as Microsoft Internet Explorer are
all that are needed. Pay as you go. This type of software is
often available month to month without a contract. Maintenance
and upgrades handled at the web server with little or no bother
to the user.
Networking as a functional group is a new development made
possible by the internet. Dispatch software can now be extended
onto the customers' desktops. Carriers, brokers and shippers can
collaborate to give and get the data that they need to get the
job done. Customer service is greatly enhanced with true real
time communications and the customer as a larger part of the
process. TDNweb.com is an example of this new breed of
transportation management software.
About the author:
Van Wooten is the vision behind Transport Data Networks (TDN) an
innovative online application that is revolutionizing the
transportation management software industry.
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