How logistics software optimizes supply chain operations

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Logistics management is a complex and challenging task. In particular, manufacturers, retailers, wholesalers, and e-commerce businesses should avoid overstocking or stock-outs and delays in product delivery or return and deal with high shipping costs. Transportation companies, in their turn, have to navigate complex routes and ensure efficient use, safety, and proper maintenance of their vehicles.

In this article, we will discuss order management, transportation management, and fleet management systems to illustrate how various businesses can optimize their supply chain operations with well-developed logistics software solutions.

Order management systems

Order management systems are instrumental in streamlining the entire lifecycle of customer orders, from placement to final delivery. As product companies and logistics businesses dealing with the physical delivery of goods strive to meet ever-growing customer demands, they adopt OMSs more often. According to Forrester’s forecast, the global market for OMS software will almost double, reaching $1.9 billion by 2026.

OMS provides user-friendly interfaces for easy manual order entry and supports bulk order imports. For example, a distributor that receives a daily list of orders from multiple retailers can upload a CSV file with all these orders into OMS, including a robust “QR code generator” feature. The system will then process these orders, eliminating the need for manual entry.

This software validates the order details to ensure their accuracy and completeness. It also helps to edit or cancel orders and manage returns and refunds. Besides, OMS monitors stock levels across multiple stores and warehouses. It sends automatic notifications, reminding business users to replenish the stock.

Within OMS, orders can be prioritized based on predefined rules. The system also automatically allocates orders to the appropriate locations and can split orders when items are sourced from different places. The software helps manage the picking, packing, and shipping of goods. It integrates with multiple carriers, simplifying label generation and order tracking. It even supports dropshipping for orders fulfilled by third-party suppliers. In addition, OMS provides automated updates to notify customers about order statuses.

Success story

Ted Baker is a UK high-end clothing brand with 500+ shops and concessions worldwide. Due to substantial annual sales growth the company sought a new omnichannel solution to improve order management efficiency and boost customer satisfaction.

Ted Baker chose OneStock OMS, which provided real-time inventory visibility and intelligent order orchestration capabilities. The system helped to reduce stock-outs, ensure on-time delivery, and cut transportation costs. In the first year of using OneStock OMS in 30 of Ted Baker’s shops, the company fulfilled 100,000 more orders.

Transportation management systems

Transportation management systems become increasingly helpful in orchestrating intricate logistics processes. According to MarketsandMarkets, the global TMS market is projected to grow from $13.5 billion in 2023 to $33.3 billion by 2028.

TMS can help businesses evaluate different carrier options based on cost, performance history, and shipment specifics to select the most suitable carrier. For example, for the shipment of perishable goods, TMS would prioritize carriers with a strong track record in maintaining proper temperature conditions during transit. It then determines the optimal route to reach the destination.

Besides, the software analyzes delivery deadlines, capacity constraints, and carrier availability to schedule shipments. It helps balance the load across various transportation resources, ensuring that vehicles are used efficiently. So, the system can help consolidate several shipments heading in the same direction to reduce empty truck space and minimize costs.

To enable prompt issue management and customer updates, TMS offers real-time visibility into the status and location of vehicles. In addition, the system can help manage freight costs through rate analysis, automated bidding and quoting, invoice auditing, and accurate billing.

Success story

Bosch, a global technology and services provider, used to spend around 1 billion euros in transportation costs, with road transportation accounting for 60% of this expense. It needed a universal TMS to encompass its 4 business sectors, 19 divisions, and numerous locations worldwide. The company also aimed to reduce transportation costs, make logistic processes more transparent, and optimize the management of an extensive transportation network spanning across Europe, China, India, and South America.

In just a few months after its implementation, TMS by 4Flow helped Bosch integrate 7 plants, 1,200 transportation lanes, 23 logistics service providers, and 3,500 sales partners in Europe and China. It contributed to an enhanced transparency of transportation processes and costs. What’s more, the software allowed the company to reduce transportation costs by 10%.

Fleet management systems

FMS offers real-time GPS tracking to monitor the exact vehicle location. Plus, it utilizes geofencing to set virtual boundaries and sends notifications when vehicles cross them. This feature can be particularly useful to prevent theft or unauthorized use of vehicles.

The system continuously monitors drivers’ behavior to identify risky or undesirable actions. It identifies hard braking, speeding, excessive idling, and other behaviors that could impact safety, hinder transportation, or damage a vehicle. Additionally, FMS facilitates communications with drivers, helping manage their schedules and assign tasks.

FMS can offer vehicle maintenance scheduling and health monitoring to reduce the risk of breakdowns and costly repairs. In particular, it can send automated notifications to remind about routine maintenance tasks such as oil changes or inspections. The software also monitors fuel consumption and identifies fuel-efficient driving practices to help reduce fuel expenses and adopt eco-friendly driving habits.

As FMS gains widespread recognition, the global fleet management software market is growing rapidly. It is expected to expand from $23.67 billion in 2023 to $79.82 billion by 2030, according to Fortune Business Insights.

Success story

Vecttor is a Spanish vehicle-for-hire company with a fleet of over 3,000 vehicles. The company aimed to cut down fuel consumption and emissions and ensure safety during trips.

With Geotab’s FMS solution, Vecttor managed to cut down fuel consumption by 2-3% per vehicle, which helped save more than €200,000 per year. This also led to a remarkable reduction of CO2 emissions by over 20 tons annually. Moreover, the fleet management software provided insights into the drivers’ behavior, helping to mitigate dangerous driving habits.

Final thoughts

Market analysis statistics show a growing popularity of various logistics management solutions. While their implementation сan require substantial initial investments, many businesses find them beneficial in the long run.

Logistics software helps save money by reducing manual work, as well as transportation and inventory expenses. It also improves customer satisfaction through timely deliveries and precise order processing. These solutions can even contribute to environmental sustainability by cutting down emissions and waste.

Moreover, logistics software solutions often have compliance management features to help meet industry and regional regulations. Plus, they provide reports and data analytics that assist in making data-driven decisions to improve operational processes. All this makes logistics management software a versatile tool that empowers businesses to handle supply chain challenges efficiently.

 

Author Bio: Natalya Butkevich is a Technology Research Analyst at Itransition, a software development company headquartered in Denver