The Role of Data Analytics in TMS

Transportation Management Systems (TMS) help businesses manage their transportation and logistics operations efficiently. In an increasingly competitive global marketplace where supply chains can be long and complex, transportation management systems and the data analytics and reporting tools they provide play a vital role in optimizing operations. This article explains how data analytics is used in TMS, the types of metrics companies may wish to track, how a TMS can integrate with other systems, and the value these systems bring to global businesses.

Complex global transportation networks require careful supervision and can generate massive volumes of data. Businesses must keep track of routes, fuel consumption, workforce productivity and utilization, delivery statuses, and third-party carrier performance. Depending on how the company operates and the platforms used to track the data, this information could easily become siloed, resulting in underutilization.

TMS software, such as the tools offered as part of Manhattan's Supply Chain Execution suite, helps organizations unify data from multiple sources, providing a single source of truth and access to actionable insights that can be used to optimize routes, reduce empty miles, control costs, and provide better delivery updates or tracking information. With real-time access to transportation data, businesses can offer better customer service and make more confident and accurate decisions about carrier selection.

TMS reporting and analytics help companies save money on their fulfillment operations and contribute to improved resilience. Improving supply chain visibility plays a key role in risk management and sets businesses up for better decision-making at every stage of supply chain planning and execution.

Transportation management systems collect and process a variety of metrics that can be analyzed in several ways. Some of the most useful forms of analytics in transportation management include:

• Descriptive analytics. Descriptive analytics explain what happened in the past, such as historical freight spending or total shipments by region. This can be utilized to identify changing trends. For example, if spending has increased in recent months or the number of shipments per quarter in a given region has fallen, this could be something that needs closer analysis.
• Diagnostic analytics. Companies use diagnostic analytics to investigate why a trend occurred. For example, by looking at correlations between various metrics, diagnostic analytics could help a manager understand why shipments are delayed or costs are increasing in a given region.
• Predictive analytics. Predictive analytics involves forecasting future outcomes, such as potential route congestion, peaks or troughs in demand, or changing delivery times, based on past data. Predictive analytics won't always yield accurate forecasts. However, with sufficient data and well-trained algorithms, it can provide useful estimates to support data-driven decision-making.
• Prescriptive analytics. Prescriptive analytics provide recommendations for routes, carrier assignments, load consolidation, or other actions, based on recent data and current trends.
  
  

TMS platforms track several metrics and can generate insightful reports for logistics professionals. Some key reporting features include:

• Freight cost per mile or shipment
• Carrier performance (on-time percentage, claims, exceptions)
• Lane profitability
• Delivery time variance
• Fuel consumption trends
• CO₂ emissions and sustainability
• Order-to-ship cycle times
• Real-time shipment status

These reports have value for direct transportation and logistics use, and operations managers can use them to determine whether their day-to-day actions align with long-term business goals. Finance departments can also use this information to plan future budgets, and customer service teams may find some reports useful for advising consumers on potential delivery delays, tracking shipments, and answering other queries.

Modern TMS platforms offer real-time insights and give managers access to the information they need to optimize their operations. By eliminating data silos and unifying all aspects of supply chain management, businesses can operate more effectively and efficiently.

Reports give managers insight into the current status of their operations, and TMS analytics tools help them understand the information. Manhattan's Supply Chain Execution solutions offer AI-powered analytics tools that deliver actionable insights, support strategic planning, or automate certain tasks. Some use-cases for analytics in transportation management include:

• Carrier selection optimization. Rather than relying on contracts and marketing materials, base carrier selection on recent performance data. 
• Proactive exception management. Improve the customer experience, reduce waste, and save money by identifying issues with late shipments, delays, or route deviations before they impact the customer or cause problems elsewhere in the company's operations.
• Strategic planning. Optimize transportation strategies to meet seasonal trends and sales cycles with demand planning and forecasting.
• Cost savings. Minimize empty miles, identify wasteful routes, optimize fleet usage, and improve overall workforce productivity. Analytics can highlight underperforming carriers and poor asset utilization so managers can take steps to address those issues.
• Customer experience management. Analytics make it easier to provide customers with accurate ETAs, send out alerts as the product moves through the fulfillment chain, and get delivery insights managers can use to improve future shipments. TMS analytics is beneficial for the business and the customer.

Manhattan analytics tools offer end-to-end visibility, giving managers the insights they need to improve the performance of every aspect of their supply chain. The cloud-native platform unifies supply chain management and execution and offers easy integration with third-party tools, helping businesses optimize everything from supply chain planning and warehouse management to order fulfillment.

Transportation Management Systems can provide invaluable insights into a company's fulfillment operations. To get the best results from these reporting tools, follow these best practices:

• Ensure data quality: Limited or inferior data produces poor-quality results. Manhattan analytics tools offer easy integration with other tools in the Manhattan suite and popular third-party applications. Aim to eliminate data silos to provide analytics tools with as much current and accurate data as possible to ensure best results.
• Customize dashboards for user roles: Avoid overwhelming users with information that's irrelevant to their job role. Take advantage of the option to tailor dashboards by creating views that focus on specific areas of interest to team leaders, managers, finance analysts, or executives.
• Automate alerts and reporting schedules: Give leaders access to information in near-real time by automating reports. Transport operations generate vast amounts of data, and TMS tools can process it quickly and accurately, allowing for data-driven decision-making.
• Leverage AI and machine learning: Optimize fulfillment operations with AI and machine learning. Use AI algorithms to improve the quality of reports and analytics, and receive actionable recommendations based on the real-time analysis of the data collected.
• Integrate analytics with broader systems: AI-powered tools provide better recommendations when they have access to metrics from across the business. Sync the TMS with ERP, WMS, and CRM software for full-context decisions.
• Use automation where possible: Respond in real-time with autonomous systems. Once the team is confident in the quality of the analysis provided by the TMS software, use automation to quickly respond to changing demand, delays, or supply chain disruptions.
• Choose cloud-based platforms: Use a cloud-based TMS to take advantage of regular security and feature updates, powerful APIs, and easy integrations. With cloud-native TMS software, managers receive updates quickly, without interrupting the warehouse's regular workflow.
• Choose monitored metrics carefully: TMS platforms can track numerous metrics. To avoid feeling overwhelmed with information, identify target areas for improvement, and monitor those metrics. After gaining an understanding of the current state of the business' fulfillment operations, gradually expand the metrics being monitored and refine more areas of the company's operations.
• Invest in training: Data analytics and reporting tools are only useful if managers take full advantage of them. While team members don't need a background in data analytics to make use of the reports and recommendations, some training can help them understand the reports and leverage the tools at their disposal.

Before implementing a new TMS, conduct an audit of the company's existing operations to establish a baseline for assessing ROI. Define clear goals, such as improving fulfillment speeds, increasing sustainability, or cutting costs. Review fulfillment operations regularly to assess whether the implementation is on track to achieve the organization's goals, and make changes to the operations as needed.

Data analytics and reporting systems can help companies improve the efficiency of their supply chains. Transport management systems give department leaders and managers access to detailed information about fleets, routes, carrier efficiency, and shipments. When combined with other information from across the organization, this can help companies improve their sustainability, efficiency, and customer service.

Tracking the right metrics, such as cost per mile, fulfillment times, and carrier performance, can shine a light on which areas of the organization's transport operations require attention. Armed with accurate, current, and relevant data, managers can make better decisions, become a more agile organization, and offer a higher level of customer service.

Organizations that aren't currently using AI-powered TMS analytics tools may be missing out on invaluable insights into the efficiency of their transport operations. Legacy systems can create data silos, leaving managers in the dark about key areas of their operations.

Using Manhattan's cloud-native Supply Chain Execution platform, managers can benefit from actionable insights and detailed, real-time reporting. To learn more about how we can help organizations of all sizes improve the efficiency of their supply chains, contact us to schedule a consultation or visit our TMS product page.