<P> A transportation management system (TMS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system . </P> <P> A TMS usually "sits" between an ERP or legacy order processing and warehouse / distribution module . A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions . These solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider . Once the best provider is selected, the solution typically generates electronic load tendering and track / trace to execute the optimized shipment with the selected carrier, and later to support freight audit and payment (settlement process). Links back to ERP systems (after orders turned into optimal shipments), and sometimes secondarily to WMS programs also linked to ERP are also common . </P> <P> These systems have been offered with different types of licensing arrangements . The four main offerings are: </P> <Ol> <Li> On - premises licensing (traditional purchased license) </Li> <Li> Hosted licensing (remote, SaaS, Cloud) </Li> <Li> On - premises hosted licensing (a blend of 1 and 2) </Li> <Li> Hosted - TMS free of licensing (same as 2 but free with no license requirements) </Li> </Ol>

Key steps used for transportation optimization in tms