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A Transportation Management System (TMS) is a subset of supply chain management concerning transportation operations, which may be part of an Enterprise Resource Planning (ERP) system.
A TMS typically acts as an intermediary between an ERP or legacy order processing and warehouse/distribution module. In this setup, the TMS Planning Module evaluates both inbound (procurement) and outbound (shipping) orders, providing the user with suggested routing solutions. The user reviews these suggestions and selects the most reasonable option, which is then passed to the transportation provider analysis module. This module determines the best mode of transportation and the most cost-effective solution. Once the optimal option is chosen, an electronic load tendering and track/trace system is used to execute the shipment through the selected carrier. The TMS also supports freight audit and payment processes. Integration with ERP systems (once orders are transformed into shipments) and sometimes with Warehouse Management System (WMS) programs are also commonly linked to ERP.
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