The core job of a TMS system is to move an order through your system and settle it in the most efficient and cost-effective way. Exactly how that happens depends on the options a customer sets up upon implementation, as well as the flexibility of the TMS.
The term “TMS” has come to mean many different things (I’ve also discussed definitions in an article for Inbound Logistics), but I suggest we look at the class of solutions that were the original TMS software systems. I call this specific subset “multimodal TMS.”
A multimodal TMS system should include routing, rating and mode selection for multiple modes. This class of solutions addresses a core set of business issues, including 1) routing and rating the orders 2) executing the shipments and loads across multiple modes 3) tracking and tracing the loads and 4) freight settlement.
Gartner, Inc. recently released the Magic Quadrant for Transportation Management Systems* that examines many of the multimodal TMS systems on the market today. Here is how Gartner defines the multimodal TMS market:
Multimodal domestic transportation management systems (TMSs) are a subset of the global TMS market. They generically refer to the category of software that deals with the planning and execution of the physical movement of goods across the supply chain.
This Magic Quadrant focuses on holistic multimodal domestic TMSs for use by shippers (such as manufacturers, retailers, distributors and wholesalers) or non-asset-based, third-party logistics (3PL) organizations. The primary emphasis is on systems that support for-hire transportation management operations. This is where users employ a variety of shipping modes, including over the road, private/dedicated fleet, small package, rail and intermodal. Global companies and companies that import products from different regions also use air and ocean as a main transport mode, which also can be covered by some, but not all, of the multimodal domestic TMS vendors.
I expect that TMS definitions will continue to evolve, but a straightforward classification would greatly simplify the selection process. By creating a narrower category for multimodal TMS, you can start to whittle down the list of software providers capable of covering multiple modes.
Note: For the first time, 3Gtms was positioned in the Niche Players Quadrant of the Gartner Magic Quadrant for Transportation Management Systems.
*Gartner Magic Quadrant for Transportation Management Systems, Bart De Muynck 19 March 2018.