The logistics and supply chain industry lend itself well to the digitisation and automation technology. Technological advancements in this field have led to increased efficiency and minimised risks and costs involved.
These advancements have transformed how the industry has been functioning for ages. Manual freight rate negotiation and invoice processing, visiting websites of multiple carriers to track shipments, laborious paperwork and manual analysis etc.has become a thing of the past, thanks to the emergence of technology in this sector.
Today, everything is automated and organisations across the world are leveraging various systems in this field to track shipments in real-time, find the best shipping routes, get competitive freight rates, benchmark freight rates and more.
A Transportation Management System or TMS is a platform designed to help you simplify your shipping process. It makes it possible for you to streamline your end-to-end transportation process right from planning shipments to tracking them till they reach their destination.
These systems are also designed to record several data points in your supply chain and analyse them to offer actionable insights. A good TMS system automates your entire freight management process and helps you communicate better with your vendors as well as consignees. These benefits translate to reduced costs and increased efficiency.
Key features to consider while investing in a TMS:
A Logistics Resource Management system digitises and automates your logistics management and helps drive significant cost savings. The system facilitates effective management of end-to-end supply chain network by automating shipment tracking, invoice processing, negotiating freight rates and more.
In present times, cloud-based LRM solutions have gained popularity and wide acceptance as they are quick to set up and can be easily updated to keep pace with technological advancements. Besides, these systems address multiple problems in your supply chain and help you achieve unprecedented control over your overall operations.
Managing logistics can be a turbulent experience and investing in an LRM system that best suits your company can benefit you immensely right from enabling you to be in control of your freight, creating transparency in your operations to saving costs.
Following is a list of some way in which an LRM platform can benefit you:
Typically, invoices are manually processed and approved by the accounting department and the process by design is prone to errors. However, modern-day invoice processing solutions have made it possible to fully automate this process and make it foolproof while reducing the cost involved in the process.
These software use a blend of the Intelligent Optical Character Recognition system, advanced algorithms and contextual matching to automate the process.
Once your vendor uploads the invoice on the system, it immediately highlights any inconsistencies between the invoice and the original quotation to your vendor. This enables the vendor to proactively rectify the mistakes and re-upload the document, saving you the trouble of personally following up with vendors each time there’s an error.
Negotiating the best rates for each one of your shipments is critical for every organisation that exports goods. If you are a shipper, this is probably how you go about inviting quotations for your shipment: You may call or send an email to say five vendors and ask them to give you a price. Further, you may consider the best two prices and negotiate with the two vendors offering those rates.
In this case, three of the vendors have been shut out. They may have been able to beat the final price that you negotiated but you’ll never know, as you didn’t make the call. This is where the RFQ management module steps in.
Suppose you have the same pool of five vendors who offer you their rates on an RFQ management system. On submitting quotes, the system will show your vendors their rank based on their quote as compared to their competitors. But crucially, no vendor will see the amounts of the competing quotations.
The system will tap into the competitive nature of each vendor to secure the first rank and win business. It will allow vendors to resubmit their quote with a reduced price and improve their ranking. Every time a vendor reduces his rates, all other vendors get notified. Potentially what’s happening is that every vendor is negotiating with every vendor. This results in more number of negotiations and ultimately leads to the lowest possible rates.
Benefits of adopting an RFQ management system