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 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 the least cost possible. Once the best option is selected, the solution is typically generated by an electronic load tendering and a track/trace system to execute the optimized shipment by 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 Warehouse Management System (WMS) programs are also linked to ERP.