Learning about the SAP Transportation Management Solution

Objective

After completing this lesson, you will be able to identify the different modules of SAP Transportation Management and their key functions.

Introduction to SAP Transportation Management

The SAP TM solution offers various modules, covering the end-to-end process.

SAP Transportation Management (SAP TM) is a comprehensive solution designed to optimize and streamline transportation and logistics processes within the supply chain. It supports the entire transportation chain. You can manage transportation demands by planning, optimizing, tendering, subcontracting, and settlement of freight processes. Additionally, you can book carriers in accordance with the requirements of international trade and hazardous goods.

SAP TM supports the following end-to-end processes:

Domestic and international transportation.
Inbound and outbound freight management based on sales orders, purchase orders, purchase and sales scheduling agreements, deliveries, stock transport orders, and returns.
Embedded analytics and key performance indicators for real-time performance visibility.

SAP Transportation Management Key Features

Main key features include, for example:

Order-based transportation planning with subsequent creation of deliveries based on the transportation plan.
Consolidation of inbound and outbound transportation demand in one freight order or freight booking.
Automatic planning (optimization).
Enhanced functionality for air and ocean freight management.

Master Data and Transportation Network

You can create and use central master data such as business partners and products for transportation-related processes. In addition, you can use transportation-specific data to set up your transportation network, for example, locations, transportation lanes, and default routes.

SAP TM is capable of using information determined by external geographical information systems for geo-coding, distances, and durations, and geo-routing based on the standard integration with SAP HANA spatial services.

Agreement Management

You can use agreements in SAP TM. An agreement is a contract between business partners that details their commitment to conduct business with each other in an agreed-upon manner. It includes contractual data such as the following:

Organizational unit: for example, the purchasing organization.
Involved parties: for example, the ordering party or carrier.
Terms of payment.
Validity dates.

Agreement management is integrated with charge management in SAP TM. SAP TM calculates transportation charges based on the master data stored in calculation sheets, rate tables, and scales that are created locally or independently of the agreement.

Strategic Freight Management

To support your freight agreement negotiations, strategic freight procurement can be utilized. It assists you in negotiating rates with carriers to transport cargo between specific locations (trade lanes) and agreeing on a contract (agreement) with the carriers. SAP TM provides the tools necessary to request rate quotations, evaluate responses, and award the transportation business to carriers.

Charge Management

Charge management allows you to configure the master data necessary for the system to calculate transportation charges. You can determine the costs associated with transporting goods between locations using rates maintained in a rate table or a local rate table. When calculating transportation charges, the system utilizes master data including agreements, calculation sheets, local calculation sheets, rate tables, and local rate tables.

Forwarding Order Management

**Forwarding Order Management** Forwarding order management enables you to create, edit, and confirm forwarding orders from your ordering parties. Additionally, you can specify the route and calculate the transportation charges at this stage. These orders serve as the foundation for transportation planning. Beyond creating the forwarding order, you also have the option to enter the data as a forwarding quotation and forward it to the ordering party. Subsequently, you can generate a forwarding order based on the provided forwarding quotation.

Freight Unit Building

Freight unit building automatically generates freight units from forwarding orders, order-based or delivery-based transportation requirements, or other related business documents such as sales orders or purchase orders. It can also split and merge product quantities within these requirements when creating freight units, in accordance with the applied freight unit building rules.

Logistics Integration

In the integrated logistics process within SAP S/4HANA, the following applies:

Freight Unit Creation: SAP TM uses sales, purchase, and stock transport orders, returns, sales, purchase, and stock transport scheduling agreements, S2P JIT calls, as well as inbound and outbound deliveries to create freight units.
Responsive Adaptation: Logistics integration allows you to continuously react to changes in original documents that occur in the system.
Order-Based Planning: In order-based planning, SAP TM requests the creation of deliveries based on the transportation plan taking into account dates, times, and quantities.
Delivery-Based Planning: In delivery-based planning, transportation planning is based on outbound and inbound deliveries.
Sales Order Scheduling: Logistics integration supports the scheduling of sales orders based on SAP TM durations or SAP TM scheduling using the transportation requirement routing and scheduling (TRS) capability of SAP TM.

Freight Order Management

Freight order management allows you to create and edit various freight documents, such as freight orders, consignment orders, and freight bookings. These documents provide essential details necessary for transportation planning and execution, including information on source and destination locations, key timelines, product information, and resources used. You can create freight documents either directly or during transportation planning. For instance, you can assign freight units to freight orders and enable the system to calculate transportation charges. Furthermore, carrier selection can be streamlined by assigning freight orders directly to a carrier as a suborder, or you can engage in tendering processes.

Tendering

The tendering process allows you to send out freight requests for quotation (freight RFQs) to one or more carriers according to a tendering plan. You can use a freight RFQ tendering process to send out one or more freight RFQs. You can send the freight RFQs manually or enable the system to send them out automatically. You can also use a direct tendering process to send a road freight order (road FO) directly to a specified carrier without creating a freight RFQ. Carriers can confirm or reject the road FOs. Unlike the freight RFQ process, the system generally awards a carrier if they do not reject the road FO within a given time limit. Direct tendering can be initiated either manually by the user or automatically by the system. Furthermore, you can use freight bookings to book freight space in advance, for example, with a shipping company. You can then perform the execution on these documents.

Planning

In planning, freight units are created on the basis of logistics business documents. Then, capacities can be assigned to these freight units. Furthermore, various constraints can be taken into account, for example, requested delivery dates. Finally, freight orders are the result of planning.

A number of profiles and settings are available that you can use to perform transportation planning. You can use them to group planning-relevant settings, for example, capacities and planning costs.

You can perform planning either manually or automatically.

Forwarding Settlement

You can create a forwarding settlement document to bill a customer for the transportation services you provide to the customer. SAP TM transfers the forwarding settlement document to Sales and Distribution (SD) and SD sends the invoice to the customer.

Freight Settlement

In freight settlement, a freight order or freight booking provides the basis for the freight settlement document. For a credit memo, a freight settlement document forms the basis. You use this function to trigger the verification of an invoice, which has been received from a supplier or carrier, against a freight document. With freight cost distribution, the system allocates the freight costs to the individual delivery items when used with the logistics integration feature. This enables you to post the freight costs to expenses or to material valuation.

Carrier Collaboration

You can collaborate with your carriers during various processes in SAP TM by giving them access to your SAP S/4HANA system to do the following:

Manage and respond to freight agreement requests for quotation (RFQs) during your strategic freight procurement process.
Manage and respond to your freight RFQs, view freight quotations that they've submitted to you, and manage and respond to freight orders that you've sent them during your freight subcontracting process.
Monitor the execution of freight orders that you’ve subcontracted to them, and report events for freight orders that they are executing.
Monitor the charges for freight orders that you have subcontracted to carriers.
Create invoices for relevant freight orders that they’re executing.
Update freight invoices or approve the charges that are suggested by you in the freight invoice and submit the freight invoices to you for further processing.
Display credit memos that they have created for the submitted invoices.

Analytics

This function enables you to collect and combine relevant data across different operational areas to answer business-related and specific questions. By analyzing this data, you get important insights and improved transparency, which are crucial for your operational and strategic decision-making.

You can use operational reporting for real-time analyses of data from SAP TM. If you use overview pages (OVPs) and the corresponding Core Data Services (CDS), you can access the data in your live system directly. Therefore, you always have real-time data for your evaluations, and you can react promptly to meet your operational daily business needs and processes. SAP TM provides several OVPs with multiple KPIs covering areas such as quantities, execution, tendering, business share, and allocations.

Additional Information

For additional information regarding the different solution capabilities, please visit the SAP Help Portal.

User Experience

SAP TM Fiori-based front-end; serves as a single entry point for all TM applications, dependent on user roles and authorizations.

SAP Transportation Management (SAP TM) Fiori apps provide a modern, user-friendly interface for accessing and managing transportation processes in real-time. These apps are designed to enhance the user experience by offering intuitive navigation, personalized dashboards, and efficient access to critical transportation data. Below are some key categories and examples of Fiori apps for SAP TM:

Order Management:
- Create Freight Bookings: Facilitates the creation of freight bookings for air and sea transportation.
- Create Freight Orders: Facilitates the creation of freight orders for land transportation.
Transportation Planning and Execution:
- Manage Freight Orders: Allows users to view and manage freight orders, including assigning and tracking shipments.
- Monitor Freight Order Execution: Provides real-time visibility of the execution status of freight orders.
Freight Costing and Settlement:
- Freight Cost Calculation: Enables users to calculate freight costs based on various parameters like routes, rates, and transport modes.
- Manage Freight Settlements: Provides functionality to view and manage transportation invoices and settlements, ensuring accurate cost tracking.
Carrier Management:
- Manage Carrier Contracts: Allows users to manage and review contracts with carriers, ensuring compliance with agreed terms.
- Evaluate Carrier Performance: Provides insights into carrier performance to help optimize the selection process and improve service levels.
Transportation Monitoring and Analytics:
- Transportation Dashboard: Offers a high-level view of transportation activities, providing key performance indicators (KPIs) for efficient decision-making.
- Transportation Analytics: Helps users analyze transportation data, such as on-time delivery performance, cost analysis, and carrier efficiency.

These Fiori apps enable SAP TM users to improve productivity, enhance collaboration, and make data-driven decisions to optimize their transportation processes. The mobile-responsive design also allows users to access these apps on various devices, providing flexibility and convenience for transportation management tasks.

Additional information

For the full list of available applications, you can search in the Fiori Library app.
Learn more about SAP Fiori here.

Analytics and Monitoring with SAP Transportation Management

In SAP Transportation Management (SAP TM), analytics and monitoring capabilities are crucial for optimizing transportation processes, gaining visibility into operations, and making data-driven decisions. SAP TM provides several tools and reports to help users analyze performance, monitor transportation activities, and improve efficiency. Here are some of the key analytics and monitoring features available in SAP TM:

Transportation Dashboard
- The Transportation Dashboard provides an overview of key performance indicators (KPIs) related to transportation activities, including on-time deliveries, freight costs, and order status.
- It helps users quickly assess transportation performance across various metrics and identify areas for improvement.
- Dashboards are customizable to meet the specific needs of different users or roles.
Transportation Analytics (SAP Analytics Cloud Integration)
- SAP TM integrates with SAP Analytics Cloud (SAC), providing advanced analytics capabilities for in-depth insights into transportation data.
- Users can access pre-built reports or create custom analytics based on transportation data, such as shipment status, carrier performance, and cost analysis.
- Key features include interactive visualizations, trend analysis, and predictive analytics to optimize decision-making.
Freight Order Monitoring
- This tool enables users to monitor the status of freight orders in real-time, providing insights into the current state of shipments, including delays, exceptions, or cancellations.
- Users can track the progress of orders and identify potential bottlenecks, enabling proactive management of transportation operations.
Freight Cost Analytics
- SAP TM provides tools for monitoring and analyzing freight costs, helping users evaluate transportation spend and identify cost-saving opportunities.
- Users can analyze cost breakdowns, compare rates across different carriers, or identify areas where efficiency improvements can lead to reduced costs.
Carrier Performance Monitoring
- This feature tracks and evaluates the performance of carriers based on metrics like on-time deliveries, service quality, and compliance with contract terms.
- Carrier performance data helps businesses make informed decisions when selecting carriers or negotiating contracts.
On-Time Delivery Performance
- SAP TM includes analytics to track on-time delivery performance, allowing users to measure and improve delivery reliability.
- This feature is essential for identifying potential delays and ensuring that customers receive their goods as promised.
Exception Management
- Exception management tools in SAP TM allow users to monitor and address issues such as delays, missing shipments, or capacity shortages in real-time.
- The system generates alerts and notifications when transportation exceptions occur, enabling quick resolution and ensuring continuous smooth operations.
Route and Mode Optimization
- SAP TM includes route optimization and mode analysis tools that analyze transportation routes and transportation modes to suggest the most efficient options.
- This can help reduce transportation time and costs and improve overall efficiency by choosing the most cost-effective and timely routes.
Shipment Tracking and Monitoring
- SAP TM provides end-to-end shipment tracking, offering visibility into the status of each shipment.
- Users can monitor shipments in real-time, check expected delivery dates, and receive alerts about potential delays or issues during transit.
Real-Time Visibility with Integration to External Systems
- SAP TM integrates with external systems (e.g. telematics, GPS tracking, and third-party logistics providers) to provide real-time visibility into transportation activities.
- This integration enables monitoring of live data, such as vehicle location, traffic conditions, and delivery updates.
Analytics for Freight Procurement
- During the freight procurement process, SAP TM enables users to analyze and compare different carriers' rates, services, and delivery times.
- This helps optimize carrier selection and freight negotiation based on historical data and performance metrics.
Historical and Predictive Analytics
- SAP TM offers both historical analytics for reviewing past transportation performance and predictive analytics to forecast future trends or risks in transportation operations.
- Predictive models help users anticipate potential disruptions, optimize capacity planning, and improve overall supply chain forecasting.

These analytics and monitoring capabilities within SAP TM provide businesses with the insights needed to drive operational excellence, improve decision-making, and optimize their transportation management processes. By leveraging real-time data, historical trends, and predictive insights, organizations can enhance the efficiency and effectiveness of their transportation networks.

Conclusion

In conclusion, SAP Transportation Management (SAP TM) is a powerful and comprehensive solution that enables businesses to optimize their transportation processes, enhance supply chain efficiency, and reduce costs. By integrating key functionalities like freight procurement, planning, execution, and settlement, SAP TM ensures a streamlined, end-to-end transportation management experience.

The SAP TM Fiori apps further enhance the solution by providing a modern, intuitive, and mobile-responsive interface. These apps empower users with easy access to real-time data, allowing for efficient transportation planning, execution, and management. The user-friendly design of the Fiori apps ensures that users can quickly navigate complex transportation tasks, improving overall productivity and decision-making.

Moreover, SAP TM’s robust analytics and monitoring capabilities offer valuable insights into transportation performance, cost management, and exception handling. Through advanced tools and integration with SAP Analytics Cloud, users can gain in-depth visibility into key metrics, enabling data-driven decisions and proactive management of transportation operations. Whether for optimizing routes, tracking carrier performance, or improving on-time delivery, SAP TM analytics provide the insights necessary for continuous improvement.

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