End-to-End Transportation Process

Transportation Management Main Areas:

• Requirements and Order Management
• Transportation Planning
• Transportation Execution
• Freight Costing and Settlement
• Analytics and Collaboration

Requirements Management & Order Management: The transportation process initiates with the management of transportation requirements and order processing.

For shippers, the creation of these requirements can occur in two distinct scenarios:

• Integrated Sales Order and Delivery Process: Sales order and delivery processes as well as transportation management are handled inside the same instance/system. Logistics business documents derived from Sales and Distribution (SD), Materials Management (MM), or those generated in Logistics Execution (LE) serve as the source for transportation requirements and planning.
• Decentralized Sales Order and Delivery Process: Sales orders and delivery are handled in one instance/system and transportation management is done in a separate instance/system. Order-based transportation requests (OTR)/delivery-based transportation (DTR) request represents a transportation demand based on an order/delivery that was created in an SAP S/4HANA ERP system. In this scenario, the order-based transportation requirement or delivery-based transportation requirement serve as the source for transportation requirements and planning.

For LSPs, forwarding order/forwarding quotations serve as the source for transportation requirements and planning.

All the above-mentioned documents serve as the source for transportation requirements and planning. The data from these source documents is used to generate the Freight unit. The business document data, with the freight unit building rules, form the basis for building a freight unit. A freight unit represents a collection of goods that can be transported throughout the complete transportation process chain.

During planning, freight units are assigned to means of transport to create freight orders. SAP TM offers choices for manual planning, optimization-driven planning, and semiautomated procedures such as generating transportation proposals, creating unified packaging hierarchies, and optimizing loads. Load optimization specifically aims to maximize the utilization of container or truck space within a three-dimensional framework. In the planning process, various attributes (including those associated with time and geography), capacities (encompassing vehicle resources, types, and schedules), and elements related to the transportation network (involving locations, zones, and lanes) are considered. Also, the planning process addresses constraints, such as capacity, time, routing, scheduling, and incompatibilities.

Planning is conducted within the transportation cockpit user interface (UI). The transportation cockpit can tailor its interface to suit the specific planning scenario being undertaken. This includes options like map-based planning, Gantt chart planning, drag-and-drop functionality, load planning, and command-based planning, all of which can be executed seamlessly within the transportation cockpit.

Carrier selection can be undertaken either during the planning process or afterward. Carrier selection can be executed through multiple methods. It can be carried out manually, using optimization algorithms, or via a tendering process. The primary aim of carrier selection is to establish a ranked list of carriers eligible to fulfill a planned freight order. This selection process considers various constraints such as costs, priorities, incompatibilities, and business allocations. The tendering process can function as an integral part of carrier selection or operate as a distinct and separate process. Within the tendering process, freight orders are proffered to eligible carriers through a tendering or auction procedure.

Transportation execution encompasses a comprehensive range of activities related to the management and documentation of shipments during their transit. The freight order serves as the foundation of the execution process, providing precise details and actual quantities of the cargo being transported. Any discrepancies arising between the initial order capture and planning phases, and the physical verification and handling, are systematically recorded. Furthermore, the process of moving cargo triggers updates to both the order and cargo status. This includes actions like manual entry of loading status into the transportation management system or automatic updates facilitated through SAP Event Management & Global Track and Trace, ensuring real-time visibility and traceability of the shipment's progress.

Charge management delivers comprehensive financial insights by supplying precise details concerning costs, revenue, and profitability within the transportation domain. Within this framework, agreements play a central role, serving as contractual instruments that represent both customers through forwarding agreements and suppliers through freight agreements. These agreements make explicit reference to calculation sheets that encompass an exhaustive list of charge elements used in the computation of fees for customers or suppliers. The calculation engine analyzes these charge elements within the calculation sheet and calculates correct fees for customers or suppliers. The outcomes of these calculations are recorded in either the forwarding order for customer invoices or the freight order for supplier invoices.

From the forwarding order and freight order, draft invoices can be created for settlement integration to the SAP S/4HANA ERP. To create customer invoices, forwarding settlement documents are created from the forwarding order and then are sent to ERP to create a billing document. For supplier invoice settlement, freight settlement documents are created from the freight order and are then transferred to ERP to create accruals and later to create a purchase order and service entry sheet (SES) for invoice verification or self-billing.

Within the SAP S/4HANA TM system, a range of overview pages, reports, and KPI dashboards have been created that are relevant for shippers and logistic service providers. These overview pages provide a consolidate view of all data from day-to-day activities and help in real time decision-making. These pages can be tailored to business roles, users who supervise transportation execution can start their day by navigating to the freight order execution overview.