TM
Also: Transportmanagement, TMS, Transport Management System, Transportsteuerung, Transport Management
AI-generated
Transportation Management (TM) refers to the software-supported planning, control, and monitoring of transports along the supply chain. TM systems coordinate freight orders, carrier selection, route planning, and transportation costs within a central system.
Key facts
- TM stands for Transportation Management and refers to the software-supported planning, control, and invoicing of transports.
- TM systems are available either as standalone specialized solutions (best-of-breed) or as integrated ERP modules.
- The quality of interfaces to WMS, ERP, and carrier systems is critical to the value delivered by a TM system.
- TM typically encompasses route planning, carrier selection, shipment tracking, freight cost verification, and document management.
- Whether a standalone TMS solution or an ERP module makes more sense depends on transport volume, network complexity, and available internal resources.
What is Transportation Management?
Transportation Management (TM) encompasses all processes required to move goods from sender to recipient – from order capture through carrier selection to invoicing. In practice, the term is most commonly used in connection with TMS software (Transport Management System), which digitally maps and automates these processes. TM systems are available either as standalone solutions or as modules integrated into ERP systems. The scope and focus vary considerably depending on the vendor and company type.
How does TM work in practice?
A TM system typically consolidates the following core functions:
- Freight planning and route optimization: Orders are automatically consolidated into routes, load capacities are checked, and optimal routes are calculated.
- Carrier selection and management: The system selects the appropriate service provider based on rates, availability, and performance metrics, and issues transport orders.
- Shipment tracking and status updates: Active shipments are monitored via interfaces to carriers or telematics data; deviations trigger automatic notifications.
- Freight cost management: Rate structures are stored, freight invoices are automatically checked against agreed terms, and discrepancies are flagged.
- Document management: Delivery notes, CMR documents, customs documents, and pre-advisories are generated and dispatched by the system.
In practice, the quality of data integration is critical: TM systems must communicate closely with WMS, ERP, and carrier systems. Missing or delayed data leads to planning errors and increased manual effort.
What should you consider when selecting a system?
When selecting a TM system, you should weigh several factors against one another. First, transport volume and network complexity determine whether a simple ERP module or a specialized best-of-breed solution makes more sense. Specialized solutions often offer deeper functionality for freight tendering, multimodal transport, or carrier performance analysis, but require more integration effort. Second, carrier connectivity should be assessed: how many carriers are natively supported, and how do EDI or API connections operate? Third, you should evaluate the system's ability to handle special requirements such as hazardous goods, temperature-controlled transport, or customs processes – these requirements vary greatly by industry. An often open question is whether a centrally managed TM approach or a decentralized approach with 4PL control better suits the organizational structure. This is company-specific and depends on the proportion of in-house operations, the number of carriers, and available internal resources.
Related terms
- 3PL
3PL (Third Party Logistics) refers to the outsourcing of operational logistics processes – such as warehousing, order picking, or transportation – to an external service provider. The company retains strategic responsibility, while the 3PL vendor handles operational execution.
- 4PL - Fourth Party Logistics
4PL (Fourth Party Logistics) refers to a logistics model in which an external partner coordinates the entire supply chain and manages multiple 3PL providers and carriers without performing any physical transport or warehousing services itself.
- Absatzlogistik
Distribution logistics encompasses all logistical processes that ensure the flow of goods from the company to the end customer. It includes warehousing, transportation, order fulfillment, and service level management in the outbound area.
- Avisierung
Pre-advice refers to the advance notification of a delivery by the supplier to the recipient before the goods arrive. It enables the warehouse to plan staffing, dock capacity, and put-away processes in a timely manner.
- Beschaffungslogistik
Procurement logistics encompasses all logistical processes that manage the flow of materials from suppliers through to handover at the warehouse or production facility. It connects purchasing, transportation, and goods receipt into a seamless inbound process.
- Best-of-Breed
Best-of-Breed refers to an IT strategy in which the highest-performing specialist solution is selected for each function within the organization — rather than deploying a single suite from one vendor.
- Carrier
A carrier is a transport service provider that physically moves goods from a point of origin to a destination. It assumes operational responsibility for the actual transport – as opposed to freight forwarders or logistics service providers, who often only coordinate.
- Cross-Docking
Cross-docking refers to a goods handling process in which items are transferred directly from inbound receiving to outbound shipping without interim storage. The goal is to reduce throughput times and avoid warehousing costs.
- Cross-Docking
Cross-docking is a logistics method in which goods are transferred directly from inbound to outbound transport at a transshipment point, without going through conventional put-away and storage.
- DESADV
DESADV (Dispatch Advice) is a standardized EDI message in EDIFACT format that electronically announces an upcoming delivery. It transmits structured information on packaging units, items, quantities, and identifiers such as the SSCC to the goods recipient.
- Disponent
A dispatcher plans, controls, and monitors transport or warehouse processes, ensuring that capacities, deadlines, and costs are aligned. The role combines operational planning with communication and disruption management.
- Disposition
Disposition refers to the operational planning and control of resources, quantities, and orders in logistics – for example in transport or materials disposition. It encompasses capacity assignment, scheduling, prioritization, and response to disruptions.
- Distributionslogistik
Distribution logistics encompasses all processes that move goods from the manufacturer or warehouse to the end customer – from network planning through storage and transportation to order fulfillment.