[TMS for Non-Logistics Industries] Food Manufacturing Part 1: Why should TMS be Considered?

While a Transport Management System (TMS) is greatly associated with the logistics industry, the logistics industry is not the only one that is in need of such technology. Before venturing into other industries that could possibly require and benefit from the use of a TMS, it is important to know what a TMS is.

As the name suggests, a Transport Management System (TMS) is a system that helps manage the allocation of transport resources to help fulfill delivery or pick-up orders. A TMS enables companies to plan, manage and dispatch their job orders to drivers. The planning capabilities often include zoning capabilities or route optimisation to help boost and facilitate the planning process of operations.

Most TMS are used by logistics transportation companies to help manage their deliveries and pick-ups. This is especially important for these companies’ main revenue is made from the transportation & distribution of goods from one place to another.  However, a TMS can also be used by other industries. One such industry is the food manufacturing industry. While the main core of the business is food manufacturing itself, transportation and distribution of goods also play an important role in the business. In this first part of the series, we will be briefly exploring the different ways a TMS can help in the food manufacturing industry.

When the goods from a food manufacturer are sold, most often than not, the delivery of the goods is often promised as part of the selling process. As such, distribution becomes a large part of the service that is provided. Similar to logistics companies, food manufacturers also have a fairly large fleet of their own and may also outsource excess orders to other companies in order to fulfil them. As such, there is much planning and managing job orders involved in the process.

The planning would involve deciding how much can be handled by the internal fleet of vehicles, how much of it would be outsourced and also the routing of all the deliveries. The delivery of goods produced by the food manufacturing industry is different from goods delivered by a logistics company as many of the goods may require special handling or storage conditions. In fact, it is very common to see refrigerated cold trucks as part of the fleet of vehicles in order to keep the food as fresh as possible and to prevent spoilage. Oftentimes, there are tighter time constraints due to the sensitive nature of the goods which need to be managed alongside the usual capacity planning, driver management and many others.

A TMS then becomes very useful to this industry to help plan and manage the distribution of goods. With powerful routing capabilities, a TMS can help manage the many time constraints of the deliveries on top of the optimal number of jobs the in-house fleet can take. Usually, for the food manufacturing industry, the distribution is managed by detailed zoning plans and designated routes. Often, these designated routes are assigned to a specific driver. Some of these designated routes may have been created a long time ago and have been in use for years with very few revisions due to the amount of data that needs to be analysed like the volume of orders, the density of customer locations, the frequency of orders and more. Over the years, more customers or locations are added to each designated route. However, the routes often end up disproportionate as some routes will have more customer locations than others. An example would be a route that passes through the main shopping district of a city would have more orders and deliveries to fulfil than a route that passes through the suburban area. By collecting data on past and ongoing routes, a TMS could act as a catalyst to re-examine and revise the zones and designated routes as data is more easily collected.

Furthermore, a TMS is able to optimise routes further by potentially redistributing the orders across different routes to ensure that the orders are equally distributed across the resources available. Also, as the food manufacturing industry is also subject to peak seasons and hence a spike in orders, a TMS can be used to determine how much additional capacity is needed and how much outsourced resources are required.

These are some of the possibilities that adopting a TMS could bring to increase efficiency and productivity of the distribution of goods of a food manufacturing industry. In the next part, we will be examining some reasons to adopt a TMS in more detail and also venture to offer some signs to note that the business may be in need of one.