Exploring Transportation Management

See the following video to learn more about the processes that transportation management in SAP S/4HANA Cloud Public Edition supports.

Business benefits of Transportation Management in SAP S/4HANA Cloud Public Edition include:

• Support your company's transportation planning and execution in SAP S/4HANA Cloud Public Edition with order-based transportation consolidation within SAP S/4HANA Cloud Public Edition or together with a decentralized transportation management system
• Reduce freight costs with early transportation planning capabilities based on freight orders and freight bookings
• Get fewer delivery changes during logistics execution with late delivery creation based on the transportation plan and close to warehouse activities and goods issue

TM in SAP S/4HANA Cloud Public Edition allows you to plan and execute transports based on sales orders and sales scheduling agreements (outbound process), purchase orders (inbound process), or stock transport orders (intra-company process). Planning transports already as early as orders are available allows you to identify consolidation options early in the process and reduce freight spend. Delivery creation based on the transportation plan leads to fewer changes during the logistics execution process. The delivery creation can happen based on the transportation plan and close to warehouse activities and goods issue, therefore reducing the possibility of subsequent changes being required.

TM in SAP S/4HANA Cloud Public Edition offers a holistic platform for end-to-end supply chain planning and execution. It allows you to combine inbound and outbound freight and therefore offers comprehensive integration into the Order to Cash as well as into the Procure to Pay processes. Freight planning can be done within SAP S/4HANA Cloud Public Edition as well as externally. The transportation process is supported by efficient freight execution and monitoring. Finally, accurate integrated freight costing and settlement including carrier invoice verification and payment address the financial part of the transportation process.

The different business processes that are available in the area of transportation management are characterized by their starting point (sales order for an outbound process, purchase order for an inbound process, stock transport order for an intra-company process) and how the planning tasks are going to be accomplished. Planning can be done within SAP S/4HANA Cloud Public Edition or using a de-central transportation management planning system (either using third-party TMS or using an SAP S/4HANA Cloud Private Edition system with scope item 4OZ).

1. Transportation Planning in SAP S/4HANA Cloud Public Edition (scope items 6W2/6W3/6W4)
2. Integrated with SAP S/4HANA Cloud Private Edition, Transportation Management (scope item 6W1 with 4OZ)
3. Integrated with 3rd party transportation management (scope item 6W1)

Each transportation process starts with a transportation demand, which is called freight unit. The freight units originate from their predecessor documents, which can be sales orders, sales scheduling agreements, purchase orders, stock transport orders, or corresponding returns orders. The freight units are assigned to freight orders or freight bookings in the planning process. These are the transportation orders. The planning process can be performed within SAP S/4HANA Cloud Public Edition, with an external SAP S/4HANA Cloud Private Edition system or with a third party transportation management system. The subsequent processes of transportation execution and settlement are based on the transportation orders.

There are four scope items available for the different process steps transportation planning (6W1 for external planning and 6W2 for planning within SAP S/4HANA Cloud Public Edition), transportation execution (6W3) and freight settlement (6W4). From release 2308 of SAP S/4HANA Cloud Public Edition these scope items replace the scope items that have been available before (3EP, 5VV, 5XC, 4MO, 5OS, 5XD, 64A, 64B, 64C, 6B2, 6B3, 6B4). It is possible to activate the new scope items on top of the corresponding old scope items, if these have been activated in a previous release.

See the following video to get an overview of the transportation process.

The only process that deviates from this baseline is the intercompany transportation process. This scenario supports the end-to-end transportation process in ocean freight in SAP S/4HANA Cloud Public Edition for the advanced intercompany stock transfer between two affiliated companies. This process can be based either on a sales order (scope item 5D2) or based on a stock transport order (scope item 5HP). The transportation requirements (freight units) are derived from an intercompany stock transfer order (purchase order) created in a receiving company or its related intercompany sales order of the delivering company. The freight unit building is considering the incoterm agreed between the receiving and delivering company (e.g., Cost, Insurance, and Freight (CIF) to the port of discharge). Based on the incoterm mentioned above, the transportation department of the delivering company is responsible for planning the pre-carriage and the main carriage up to the port of discharge. The transportation department of the receiving company is responsible for planning the on-carriage from the port of discharge to its receiving plant. In the case of incoterm CIF, the transfer of the risk of loss or damage to the goods passes when the goods are shipped on board. At this time, the valuated stock in transit is posted from the delivering to the receiving company. The transportation requirements are first planned by a dispatcher of the delivering company in the transportation cockpit. The freight units are assigned to an ocean freight booking and planned door to port, which covers the voyage from the shipping point location to the port of discharge. Afterwards, it is subcontracted to the freight forwarder. The freight forwarder returns a booking confirmation that includes further details like vessel, voyage, container number and routing information (such as locations, mode of transport, executing carrier, dates and times, and so on). Based on communicated routing information, a freight order for pick-up is created. The dispatcher of the receiving company plans the freight order for the on-carriage from the port of discharge to the receiving plant (receiving point location). After additional information of the freight booking (such as container number, port pick-up date) is added in the freight order, it can be subcontracted to the road carrier. The execution and settling process for the involved freight order / bookings does not deviate from the other processes.