Positioning Transportation Management

Transportation is an essential element in a supply chain. It affects both incoming and outgoing goods. Effective transportation planning and processing ensures that shipments are dispatched without delays and arrive on schedule. Transportation costs play an essential role in the calculation of the price of a product. It is important to keep these transportation costs to a minimum so that the price of a product remains competitive. Efficient transportation planning and processing helps to keep these costs down.

Similar to Warehouse Management, SAP S/4HANA offers several solutions for managing transportation in a company (transportation planning and execution). These solution are LE-TRA and (embedded) SAP Transportation Management (SAP TM).

LE-TRA (with the same functionality as in the SAP ERP system) is part of SAP S/4HANA through a Compatibility Package (CP). It provides customers with a limited use right which expires on December 31, 2025.

The solution LE-TRA is not the target architecture for managing transportation in SAP S/4HANA as the alternative functionality SAP Transportation Management (SAP TM) is also available. For details about Compatibility Packages, see SAP Note 2269324 - Compatibility Scope Matrix for SAP S/4HANA on-premise.

SAP Transportation Management (SAP TM):

SAP TM supports a company in all activities related to the physical transportation of goods from one location to another. SAP TM can be used to create and monitor an efficient transportation plan that fulfills the relevant constraints (for example, service level, costs and resource availability). SAP TM can determine options to save costs and to optimize the use of available resources. SAP TM can react to transportation events and find solutions to possible deviations from the original transportation plan.

SAP S/4HANA can be connected to an existing SAP TM solution (as a decentralized solution). Since SAP S/4HANA 1709 TM is also available as an embedded version.

For the embedded SAP Transportation Management solution, customers can select between the SAP S/4HANA Basic Shipping or Supply Chain for Transportation Management solutions.

• SAP S/4HANA Basic Shipping:

  Basic Shipping in SAP S/4HANA supports the entire transportation chain. Transportation demands can be managed by planning, tendering, and settling freight processes. Additionally, carriers can be booked in accordance with the requirements of hazardous goods. From a functional view, Basic Shipping corresponds to the scope of LE-TRA.

• SAP S/4HANA Supply Chain for Transportation Management:

  Embedded Transportation Management (TM) in SAP S/4HANA also supports the entire transportation chain, but now with a full suite of features way beyond the scope of Basic Shipping.

SAP S/4HANA Basic Shipping Versus SAP S/4HANA Supply Chain for Transportation Management

For details about the difference between Basic Shipping and Supply Chain for Transportation Management and the differences between SAP S/4HANA Transportation Management 2023 and SAP TM, see SAP Note 3289977 - SAP S/4HANA 2023 Supply Chain for Transportation Management - Release information.

SAP Transportation Management (SAP TM) is a solution with a comprehensive process and multimodal coverage. It enables customers to plan domestic and international transportation for inbound and outbound freight.

The Functions of SAP TM Capabilities:

Strategic freight management is build to support shippers to procure long-term transportation services at logistic services providers (LSPs) or carriers. This enables a customer to undertake the following:

• Keep transportation costs down

• Improve cost planning

• Efficiently manage contracts

Order management functionality includes integration with order and delivery data in the SAP S/4HANA application, order and booking management, personal work lists and schedule management. This enables a customer to do the following:

• Improve the efficiency of order and process management

• Create dynamically-generated, optimized routing proposals based on business rules

• Minimize freight costs

• Enhance customer service

Transportation planning functionality includes manual and automated planning and dispatching, routing, resource and carrier selection, order tendering, dangerous goods management, and planning of parcels. This allows a customer to make the following efficiencies:

• Improve resource utilization and carrier selection to reduce transportation costs

• Handle huge volumes of data thanks to automated planning processes

• Combine decentralized, local business views to identify synergies

• Achieve on-time delivery

Transportation execution functionality includes extended warehouse integration for execution, logistics execution, execution monitoring and event tracking, capacity monitoring, transportation documents printing and trade regulation compliance using SAP Global Trade Services. This enables a customer to do the following:

• Improve cargo handling

• Achieve faster, more dynamic and responsive logistics execution

• Reduce shipping costs due to a streamlined process and maximized efficiency

Freight settlement functionality includes freight agreement management, charge and tariff management and transportation charge calculation. This enables a customer to do the following:

• Achieve accurate transportation costing

• Integrate transportation management and billing

• Increase invoice inaccuracy

Analytics and collaboration functionality includes dashboards for SAP S/4HANA, landed cost analysis, flexible reporting on business warehouse costs, and support for collaborative business processes between shippers, carriers and logistics service providers. This enables a customer to accomplish the following:

• Support real-time, data-driven decision making

• Gain in-depth business insights

• Reduce data complexity

• Enable efficient collaboration between logistics business partners