A transportation management system is a software package that automates the process

of building orders, tendering loads, tracking shipments, audits, and payments. Table 2.1
presents a representative list of 15 tasks that might be performed by a TMS package.

Asset tracking Carrier selection Claims management

Driver management Freight payment Load planning

Order or shipment visibility Package delivery verification Pickup scheduling Rating

Package pickup tracking Shipment consolidation Load tendering

Real-time route reporting Route optimization

Organizations that have implemented TMS software have reported decreases in empty
vehicle miles, reduced fuel consumption, and reduced transportation expenditures.
The demand for TMSs continues to grow driven by several factors. These factors include
the following: older TMS systems needing upgrades, the growth of intermodal
transportation, the improvement of TMS capabilities beyond just execution, the
emergence of the previously described “big data,” and a desire for more holistic
solutions.38 In addition, the use of a TMS is now seen as one way for an organization to
improve the environmental sustainability of its logistics activities. By using the
information provided, companies can get their freight to where and when it is needed in a
more environmentally efficient manner.

Warehouse management systems are software packages that provide oversight of the
storage and flow of materials within a company’s operations.40 Activities that can be
controlled by a WMS include inventory management, product receiving, and
determination of storage locations, order selection processes, and order shipping.
Potential benefits of a warehouse management system include dramatic reductions in data
entry errors as well as dramatic reductions in the travel distances for order picking. Other
benefits of a WMS include reduced operating expenses, fewer stock outs, increased
inventory accuracy, and improved service to customers.
Research has shown that firms that have adopted and implemented a WMS have
significantly more efficient logistics processes than non-adopters. Adopters were found to
spend less on their overall logistics processes, even though the costs of the WMS affected
the costs of operating their warehouse. The results are largely driven by the increased
visibility that is provided by the WMS.

Because of the many different TMS and WMS options that are available to a logistics
manager, it’s important that an organization utilizes a software package that best suits its
needs, as opposed to one from a “name” provider or one that offers many unneeded
options. Moreover, the installation of a TMS or WMS can cause organizational upheaval
in the sense that the organization will change its established approach to managing
transportation and warehousing, and current employees will need varying degrees of
training to become proficient with the new system.