What is a transport procurement management software and its benefits?

A transport procurement management software assists companies in procurement, tracking and invoicing for all transportation modes.

Let’s visualize the whole process a company goes through:

Source: Easy4Pro

Sales → Production → Planning → Buying → Execution → Follow up

All this needs to be coordinated and work like an orchestra. When it’s not the regular basis or forecasted rhythms, you need a powerful procurement tool that allows you to:

• Optimize your purchase

• Avoid excessive prices by imposing budgets

• Protect your business (avoid the high disruption impact a non-quality would have)

• Pay (usually involves managing PR / PO process)

A state-of-the-art transport procurement management system is an online platform that assists companies with streamlining their shipping processes.

The shipper may use transport procurement management software to select their chosen method of transport, invite logistics service providers to participate in the bidding process, monitor and trace their package, communicate and exchange documents with the carrier, and analyze data.

The carrier, on the other hand, has the option of participating in organizing procedures, bidding for deliveries, and communicating with the customer. Using transport procurement management software, companies are already making significant gains in the logistics industry.

The benefits of using a transport procurement management software:

1. Saving Time

When looking for a carrier for an urgent delivery these are usually the steps a company follows:

• Collect the correct carriers to obtain quotes from (learn from the past: capacity, quality, etc)

• Email / telephone them multiple times to negotiate the price, renegotiate, compare, and award the shipment.

• Email the contract or offer acceptance and PO# (Purchase Order number)

• Validate the received invoice

• Compilation of all non-regular shipments to create statistics and improve for the next quarter

Time is of the essence in logistics, and no second can be wasted. You must cope with transportation disruptions, traffic congestion, worker strikes, national holidays or festivities, weather, and even global pandemic disruptions. Despite this, there is an expiration date, products proximity standards, among many other concerns. All of these variables have an impact on delivery and freight dispatch times.

To tackle this challenge, logistics solutions use a combination of technologies to reduce the time to book a mode of transport, communicate with the carrier, and choose shorter shipping times.

Reduce the amount of time spent filling out paperwork. All of the documentation is automatically done with little human involvement.

Reduce the amount of time you spend on manual labor. Another advantage of automatization is that it reduces the likelihood of errors.

Real-time reports generated by a Business Intelligence system reduces time in generating reports for the management.

2. Cost Saving

The market is unpredictably volatile. Because overcapacity is equally as harmful as under-capacity, calculating capacity requires forecasting global economic developments.

• Forecast and adapt projects purchases or SPOT to set them up at the most favorable moment.

• When planning was not possible, react by keeping a hand and management of the situation.

Analytical functionality is what you truly need here. Top transport management software companies offer Logistics Consultancy Programs wherewith the data collected via the tool, they can predict when the customers should make their shipping requests & give them real-time suggestions on how to optimize their purchases (tenders, groupage, planning, etc.)

What the rest of the logistics management companies offer to provide cost savings is the reverse bidding system where the invited carriers by the shipper place their offers for the requested transportation and whoever achieves the cheapest price will win the bid.

More benefits of using transportation management systems are:

• Faster and smarter matching of loads with capacity.

• Enabled collaborative shipping.

• High-cost avoidance, through optimizations and productivity, low impact on transporters margins.

• Align purchasing strategy within a group.

• Network-based BI and Analytics.

• Best performers get rewarded.

• Consume on-demand delivery services by avoiding internal indirect cost effects like validation. process unclarity, production delays, quality issues, or excess inventory levels.

To learn more about all the benefits download our whitepaper: Strategies for succeeding in today’s logistics world.