Logistics Software

Logistics software is a computer program which is used to make the process of logistics services more reliable and accurate. Logistics management is a science of planning, organizing, and executing activities for delivering the required goods or services in the right location at the right time. Modern technologies, communication links, and control systems are essential to manage materials, services, and financial goals. Logistics software helps companies or organizations in their overall performances of designing, developing, marketing, and financing.

This software ensures a consistency in the management and automation of a variety of activities in the logistics management. This also helps for precise event management, planning, transactions, and global trading. Data collection and evaluation of raw materials stored, finished goods, and other information about the supply chain can be accessed easily by using the logistics software. Perfection and pace of the operational processes are maintained to increase the performances of the companies or organisations as a whole.

Logistics software helps to retain a sequential order in the transportation of cargos. It gives all details about traffic routes and modes of transportation to satisfy customer requirements at a lower expense. This software also enables a customer to track and trace the status of an ordered product during transportation. Logistics software in distribution management aids in warehousing infrastructure, goods movement, quality assurance, and product labelling. Freight billing, payment, and auditing are made quicker and reliable with the introduction of this software. Other areas in which logistics software find its application are financial services, sales, marketing, human resource management, performance evaluation, order processing, and customer support.

Logistics software proves to be efficient in network planning, asset analysis, and inventory simulations for successful logistics management. It gives an up-to-date detail about the whole business process for the evaluation of progress in performance. It controls and manages industrial processes such as automation, manufacturing, management, and other operational procedures. Integration of computers to run the software, application selection, and maintenance are necessary to get a required result. Logistics softwares are designed, developed and supported by software developing companies according to the requirements of the logistics management of that company. Promptness, reliability, analytical ability, and defined planning outlook are some of the great concerns while designing logistics software.

Operating a Transportation Management System Using Logistics Software

A Transportation Management System (TMS) is an element of supply chain management that is positioned between a company’s Enterprise Resource Planning (ERP) system and its shipping process. Ultimately, the system ensures that a company’s resources are invested in the best transportation process for its freight, one that offers the best combination of freight care, delivery time, and delivery cost. Supporting the system’s management function is a logistics resource, typically either (a) an in-house logistics department, (b) a Third Party Logistics provider (3PL) or (c) logistics software. How well the system works – and the style of management it offers – depends largely on the logistics resource.

Evaluating Logistics Resources

Most shippers prefer to have logistics performed in-house. Traditionally, this requires hiring experts – something that is common among large, high volume shippers that have a transportation fleet, but not among small to medium size shippers that don’t have a fleet. For these shippers, the traditional alternative to hiring experts is contracting with a 3PL provider – an arrangement whose value depended on the practices of the 3PL provider. For many companies, 3PL providers present three problems:

  • They make the transportation management process seem distant
  • Their load pairing strategies aren’t based on the broadest options
  • Their highest level of transportation management can be unaffordable

In recent years, logistics software has provided shippers with an alternative to high level 3PL, one that is capable of managing the shipping process and discovering better shipping options as they arise. In addition to costing less than a 3PL provider that manages and innovates the shipping process (i.e. a customer adapter), the software lets shippers take control of their TMS by facilitating three functions that a good TMS should facilitate:

  • Planning the shipping process. A TMS should plan the shipping process according to the shipper’s parameters, which include such things as LTL rates, delivery time and warehousing fees.
  • Monitoring the shipping process. A TMS should monitor the shipping process in an administrative capacity, handling such things as transport alerts, customs clearance and invoicing.
  • Measuring Key Performance Indicators (KPIs). Without the consistent, accurate measurement of KPIs, a shipper can persist with shipping options that don’t offer the best value.

Logistics software can facilitate these functions, allowing shippers to have the logistics function in-house without investing a significant amount of capital to have it there.

Conclusion

Companies that ship products need an effective transportation management system, which means that they need a comprehensive logistics function. Traditionally, shippers have acquired this function by hiring in-house experts or contracting with a 3PL provider. Today, however, logistics software gives them the opportunity to have the logistics function in-house without paying a premium to have it there.

For small to midsize companies, hiring in-house experts can be cost prohibitive, and contracting with a 3PL provider can bring the feeling of being disconnected from the shipping process. Logistics software can resolve both issues by offering a complete logistical function on a Software as a Service (SaaS) model.

Advantages of Logistics Software Over Third Party Logistics

For manufacturers who ship a steady supply of cargo, the cost of shipping can rival the cost of payroll. Consequently, reducing shipping costs is a full-time task for most shipping managers. Today, most shippers manage the logistical side of shipping (the part of the shipping process where costs can be cut) with one of the following resources:

  • In-house Logistics – A model of shipping logistics in which the shipping process is managed by a shipper’s own staff of experts.

  • Third Party Logistics (3PL) – A model of shipping logistics in which a third party manages one or more aspects of the shipping process.

  • Logistics software – A web-based or in-house program that allows shippers to choose its own shipping arrangements and perform important tasks such as a freight audit.

Most shippers prefer the first option, but paying a team of experts can be unaffordable. Left to choose between the second and third options, many shippers choose the latter based on the following considerations:

Cost

The cost of 3PL is based on the services a shipper receives. When a shipper receives only a few services through a standard 3PL provider or a service developer, 3PL can be affordable. However, when a shipper uses the comprehensive services of a customer adapter or customer developer, the cost of 3PL can be significant. A software-based resource can facilitate comprehensive shipping management for a fraction of the cost of high-level 3PL services.

Shipping Options

Some 3PL providers make carries arrangements using a narrow range of carrier options, such as those found in an electronic posting system. Conversely, logistics software allows shippers to choose from a limitless range of shipping options based on the appropriate shipping model (e.g. less than load or truckload), and perform a freight audit to monitor shipping costs.

Control

Shippers who use 3PL commonly complain that the shipping process feels too removed-a complaint that often results from the failure of a 3PL provider to provide ongoing, in-depth communication to the customer. Using a software-based resource eliminates this issue by placing the shipper in full control of the shipping process.

Permanence

When shippers use 3PL, they often go through multiple 3PL providers as their shipping process evolves, beginning with a standard 3PL provider and eventually using the services of a customer adapter or customer developer. In addition to being more expensive than using a software-based resource, switching from one 3PL provider to another requires forming new business contracts, continuously delegating more shipping tasks to a third party, and implementing new standards for quality control.

Most shippers wish to implement a permanent logistical solution as soon as possible, and implementing a software-based solution is the best way to do it. After the solution is implemented, it options can be changed as the shipping process changes, providing a seamless transition that does not require the customer to look for a new service provider.

Conclusion

For many shippers, logistics software is the most cost effective logistical resource. In addition to allowing shippers to choose from the broadest range of carrier options, it allows them to perform important tasks (e.g. freight audit) without the assistance of a third party. To learn more about the benefits of software-based logistics, contact a provider of transportation software.