How to Develop Custom Transportation Management System to Improve Your Logistics Operations

Benefits of Custom Transportation Management Systems

Opting for a custom TMS offers several advantages over off-the-shelf solutions. By tailoring the system to your unique needs, you can:

• Increase operational efficiency and reduce costs: A custom TMS allows businesses to automate manual processes, eliminate inefficiencies, and optimize operations, resulting in cost savings and improved productivity.
• Enhance visibility and traceability of shipments: With a custom TMS, businesses can gain real-time visibility into their shipments, enabling them to track and trace each item throughout the entire transportation process. This visibility enhances transparency and helps businesses proactively address any issues that may arise.
• Improve customer service and satisfaction: By leveraging the capabilities of a custom TMS, businesses can provide accurate and up-to-date information to their customers regarding the status of their shipments. This improves customer satisfaction and loyalty.
• Scale and adapt the system as your business grows: Unlike off-the-shelf solutions, a custom TMS can be easily scaled and adapted to accommodate the changing needs of your business. This flexibility allows businesses to future-proof their transportation operations.

Key Features of a Transportation Management System to Consider 

Since a TMS is aimed to automate key logistics processes,  it is crucial to identify the key features that will address your specific business requirements before going into the software development stage. The list of features will depend on your unique challenges and operations. Nonetheless, the most primarily are the following: 

Automated Order Management 

With a TMS, businesses can automate the entire order management process, from order creation to order fulfillment. This eliminates the need for manual data entry and reduces the chances of errors.

Real-Time Shipment Tracking

One of the most valuable features of a TMS is its ability to provide real-time visibility into the status and location of shipments. This allows businesses to proactively address any issues that may arise during transit, ensuring timely delivery.

Carrier Management and Selection

A TMS enables businesses to efficiently manage their carrier relationships by providing a centralized platform to track carrier performance, rates, and contracts. This helps businesses make informed decisions when selecting carriers for their shipments.

Freight Rate Management

Managing freight rates can be a complex task, especially for businesses that deal with multiple carriers and shipping modes. A TMS simplifies this process by providing tools to manage and negotiate freight rates, ensuring businesses get the best possible rates.

Route Optimization

Optimizing routes is crucial for reducing transportation costs and improving delivery times. A TMS uses advanced algorithms to calculate the most efficient routes based on factors such as distance, traffic, and delivery windows. 

One more important aspect is that in such a way logistics companies can meet current strict sustainability regulation requirements. For example, the total distance traveled by vehicle could be reduced by 49,600 kilometers, fuel consumption could drop by 23,400 liters, and greenhouse gas emissions could decrease by 63.1 tonnes thanks to route optimization. 

Warehouse Management Integration

Integrating a TMS with a warehouse management system allows businesses to seamlessly manage their inventory and streamline the flow of goods. This integration ensures accurate inventory tracking and efficient order fulfillment.

Invoice and Payment Processing

With a TMS, businesses can automate the invoice and payment processing, reducing the administrative burden and improving accuracy. This feature also enables businesses to track and reconcile transportation costs more effectively.

Preliminary Steps for Transportation Management System Development

Before diving into the development process, it is essential to lay a solid foundation for your custom Transportation Management System (TMS) project. The following preliminary steps will help set the stage for a successful implementation:

Identifying Your Transportation Needs

The first step is to clearly define your transportation needs and challenges. Conduct a thorough analysis of your current processes, pain points, and areas for improvement. This will help you pinpoint the specific functionalities your custom TMS should provide.

When identifying your transportation needs, consider factors such as: 

• Shipments volume.
• Transportation modes used. 
• Geographic areas served. 
• Your supply chain complexity. 

Setting Clear Objectives

Defining clear objectives is crucial for project success. Determine what you hope to achieve with your custom TMS, whether it’s reducing transportation costs, improving delivery times, or enhancing customer satisfaction. Setting measurable goals will help track the system’s effectiveness and provide valuable insights.

Involve key stakeholders from various departments in setting objectives to ensure alignment with broader organizational goals. Collaborating with teams such as logistics, finance, and customer service will provide a holistic view of the desired outcomes and foster a sense of ownership and accountability across the organization.

Choosing the Right Development Approach

Once you have completed the preliminary steps, it’s time to decide on the development approach for your custom TMS. Two main options exist:

In-house Development vs. Outsourcing

Developing a TMS in-house gives you full control over the process but requires a significant investment in resources and expertise. On the other hand, outsourcing the development to a reputable company like Inoxoft allows you to leverage their specialized knowledge and experience, reducing time-to-market and ensuring a high-quality product.

When opting for in-house development, you have the advantage of having complete control over every aspect of the project. This means you can tailor the TMS to your exact specifications and make changes swiftly as needed. However, this approach demands a dedicated team of developers, project managers, and quality assurance specialists, which may require substantial financial investment and time commitment.

Selecting a Development Methodology

Choosing the right development methodology is crucial to ensure efficient project execution. Agile methodologies, such as Scrum, provide flexibility and allow for iterative development, ensuring that the system meets changing requirements.

Another popular development methodology is the Waterfall model, which follows a linear and sequential approach. This method is suitable for projects with well-defined requirements from the outset, as it involves completing one phase before moving on to the next. While it lacks the adaptability of Agile methodologies, the Waterfall model ensures a structured and predictable development process.

Step-by-Step Guide to TMS Development

After considering all necessary details, it’s time to develop and design your custom transportation management system. 

Step #1: Requirement Gathering and Analysis

This initial phase involves gathering requirements from stakeholders and analyzing them to define the system’s scope. For example, you may require automated load optimization to minimize costs and maximize truck utilization. By analyzing current processes and discussing pain points, Inoxoft can determine the most effective solution.

Step #2: System Design and Prototyping

Based on the requirements gathered, TMS design and architecture are developed. Inoxoft’s team of experts will create wireframes and prototypes, allowing stakeholders to visualize the system’s interface and functionalities.

Step #3: System Implementation

The development phase involves converting designs and prototypes into a working system. Inoxoft’s developers will write efficient code, implement features, and integrate external systems if necessary. For example, the custom TMS may integrate with inventory management systems to ensure accurate data exchange and timely replenishment.

Step #4: Testing and Quality Assurance

Rigorous testing is essential to identify and fix any defects or issues before deploying the system. Inoxoft’s quality assurance team can conduct various testing activities, including functional, performance, and security testing, to ensure a robust and reliable solution.

Step #5: Deployment and Maintenance

Once the system is thoroughly tested and approved, Inoxoft can assist in deploying it to the production environment. We can provide support during the initial rollout, ensuring a seamless transition. Ongoing maintenance and support are also crucial to keep the system running smoothly. 

Overcoming Common Transport Management System Development Challenges

Building your ideal TMS doesn’t have to be a bumpy road. While the advantages of a Transport Management System are clear, the development process can present hurdles. Below, let’s explore Inoxoft’s insights on how to navigate through the common TMS implementation challenges. 

Budgeting and Cost Management

Developing a custom Transportation Management System (TMS) involves meticulous budgeting for various activities, including in-depth analysis, innovative design, robust development, rigorous testing, and ongoing maintenance. Partnering with Inoxoft not only provides you with a team of skilled professionals but also grants you access to their expertise in precise cost estimation and management. 

Ensuring System Security and Compliance

Transportation systems are entrusted with handling a plethora of sensitive data, making system security and compliance paramount. Inoxoft recognizes the critical nature of safeguarding data integrity and confidentiality and is committed to implementing state-of-the-art security measures. 

Managing Change and User Adoption

Introducing a custom Transportation Management System into your organization may necessitate significant changes to existing processes and workflows. Inoxoft understands that managing change and facilitating user adoption are crucial components of a successful TMS implementation. Our team will collaborate closely with your organization to navigate these changes seamlessly. 

Measuring the Success of Your Custom TMS

Investing in a custom TMS is a strategic decision designed to optimize your transportation operations. But how do you know it’s working? You should continuously measure necessary metrics and make informed decisions based on them. 

Key Performance Indicators (KPIs)

Measuring the success of a custom Transportation Management System involves monitoring key performance indicators. These KPIs serve as vital metrics that provide insights into the performance and effectiveness of the system. Some relevant KPIs to consider include:

• On-time delivery rate: This metric indicates the system’s ability to ensure timely deliveries, reflecting customer satisfaction and operational efficiency.
• Freight spend as a percentage of sales: This KPI helps in evaluating cost-effectiveness and budget management within the transportation process.
• Carrier performance metrics: Tracking carrier performance metrics such as on-time pickups and deliveries can help in assessing the reliability and quality of transportation partners.
• Customer satisfaction ratings: Customer feedback and satisfaction ratings provide valuable insights into the overall performance of the TMS from a user perspective.

Continuous Improvement and System Updates

A custom transportation management system is not a static, one-time solution but a dynamic tool that needs to evolve in response to changing business requirements and industry trends. 

Through a systematic approach of analyzing performance data and conducting thorough assessments, you can implement strategic updates and enhancements to your custom TMS. These updates may include software upgrades, workflow optimizations, integration of new features, or adjustments to configurations to align the system more closely with your evolving business objectives.

Collaborate with Inoxoft to Develop Your Custom Transportation Management System 

The Inoxoft team has been developing custom logistics software solutions for over 8 years, including TMSs. We understand that supply chain management companies require a unique approach since their operations can be completely different. Even during the requirements gathering stage, we will not only focus on functional requirements but also pay attention to non-functional ones like system performance, scalability, and security. 

A prime example of our expertise is showcased in our development of a SaaS meal ordering and delivery platform, which effectively functions as a Transport Management System. This platform was designed to streamline meal delivery logistics, ensuring efficient order processing and timely deliveries. 

The system provided real-time route optimization, significantly reducing delivery times and fuel consumption. Built with scalability in mind, the platform could handle increasing volumes of orders without compromising performance. Seamless integration with various third-party services such as payment gateways and external delivery services ensured smooth operations. 

Wrapping Up

Transportation management systems (TMS) play a crucial role in streamlining operations for businesses in the logistics and transportation industry. By automating processes such as route planning, load optimization, and carrier selection, a custom TMS can significantly improve efficiency and reduce costs. 

At the same time, a custom TMS development requires careful planning and expertise. If you are considering developing such a solution, you can rely on Inoxoft. Thanks to our industry knowledge, we can deliver a tailored solution that meets your business objectives. With over 80 custom solutions under our belt, we’re not just developers; we’re your partners in innovation and growth. 

Contact us today to discuss your custom TMS needs and start optimizing your transportation operations.