Understand the Basics of SAP Transportation Management


Basics of SAP Transportation Management

SAP Transportation Management, or SAP TM, has made a considerable difference in transportation logistics in a short span of time. Launched recently in 2017, it is a standalone application from SAP AG. 

As an industry leader, your mind will be constantly flooded with the following questions about transportation:

  • How can I manage my logistics network in a holistic fashion?
  • How can I minimize the risk factors throughout my supply chain?
  • How can I reduce my operational costs and better understand transportation costs at the customer level?
  • How can I ensure the best possible usage of my assets?
  • How do I ensure high customer service levels and responsiveness to unexpected supply chain events?
  • How do I ensure I am compliant with all the varying regulations and compliance policies?

SAP TM is the best answer to all the above questions.

How Does SAP TM Help Your Business?

SAP TM solution has been specifically designed for the transportation and logistics requirements of all industries. It helps them reduce transportation costs and improve logistics efficiency and flexibility. It enhances the architecture of SAP’s existing transportation solution for manufacturers. Using SAP TM, you can manage all inbound and outbound domestic and international freight in the same environment and you get traceability and visibility of orders, shipments, items, and logistics processes. In addition, you can also plan the transportation of shipments for many common order types such as sales and purchase orders, returns, and stock transfers. All of this ensures proper supply chain execution.

Benefits derived from using SAP TM

  • Reduced costs and improved operational performance.
  • Efficient logistics and fulfillment processes.
  • Improved carrier collaboration and resource utilization.
  • Efficient, end-to-end order and process management.
  • Improved execution visibility and responsiveness.

What can SAP TM do?


Image source: SAP blog

SAP TM is delivered with out-of-the-box integration with order-to-cash and procure-to-pay scenarios to support timely execution updates. Users can increase the speed at which business process cycles are executed using integrated freight settlement with SAP ERP billing and invoicing. This includes forwarding, freight (land), and booking (sea and air) orders and intermodal scenarios.

The modules and functions of this SAP platform are as follows:

Interactive and Mass Processing

You can manage freight planning and advanced interactive planning. This tool allows you to visualize order details and maps of transit routes. It allows planning to happen both interactively and via mass processing.

Document Management

This module helps you to create documents, manage status, and print bills of lading (road, sea, air), labels, forwarding instructions, and more. These could include freight forwarding orders (FWO), sales order-based transportation requirements (OTR), and delivery-based transportation requirements (DTR). A freight unit is a transport unit used in planning. It could be a pallet or container, but it could also be two pallets that need to be transported together for customs reasons.

Order Management

If you choose to integrate with an SAP ERP system, SAP TM would be integrated by means of Process Integration (PI) interfaces. Orders and deliveries from SAP ERP can be converted into SAP TM transportation requirements automatically. If you run SAP TM as a standalone system, LSP Forwarding Order creation is either done by a manual entry in the SAP TM UI or integrated from a customer’s system via EDI.

On a side note, you may also integrate SAP TM with SAP Hybris Commerce if you are an online retailer.

Transportation Planning

You can plan everything from start to finish. Some of the planning processes delivered with SAP TM are as follows:

  • Transportation cockpit (affords visibility)
  • Planning and optimization
  • Carrier selection
  • Order tendering

Transportation Execution

You can execute the following tasks easily:

  • Integration with SAP Event Management (EM) for alerts and transportation tracking.
  • Generation of delivery documents in SAP ERP.
  • Generation of shipping documents in SAP ERP or (via interfaces) other systems.
  • Integration with dangerous goods management as part of SAP Environment, Health and Safety (requires a separate license).
  • Document printing.
  • Integration with SAP Extended Warehouse Management (EWM).
  • Application of analytics to analyze and adjust business processes.

Freight Settlement

The settlement process supports the following:

  • Definition of freight or forwarding agreements.
  • Ability to define transportation charges.
  • Integration of settlement documents to SAP ERP.
  • Generation of settlement documents.
  • Integration of customer billing to SAP ERP.

These are some of the mind-blowing things SAP TM can do for your business. Here is a brief snapshot of the above benefits.

SAP Transportation Management

Image source: SAP blog

SAP is known to continuously improve its offerings in every new release. Let’s see what the latest version of SAP TM (1809) has in store for businesses. 

What’s New in SAP Transportation Management 1809?

I’m enlisting the highlights of SAP TM 1809 so that you can leverage these capabilities:

  1. SAP TM 1809 offers a simplified integration into other S/4HANA processes based on harmonized master data and customizing (“single-system integration qualities”):
    • No Core Interface (CIF) to transfer and convert master data is needed. The TM system uses business partners and product master data created in S/4HANA directly.
    • No replication of dangerous goods, hazardous substances, and phrases. SAP TM 1809 accesses Product Safety & Stewardship (PS&S) master data in S/4HANA directly.
    • SAP TM 1809 customizing is harmonized with S/4HANA customizing.
    • No replication of logistics business documents for inbound and outbound processes. Transportation demand (Freight Units) is created directly from S/4HANA sales, purchases, and stock transfer documents.
  2. Embedded analytics functionality (technically based on Core Data Services which is a fundamental element in the S/4HANA architecture) is available in SAP TM 1809.
  3. SAP TM 1809 integrates into the embedded applications in S/4HANA and also supports side-by-side scenarios. This means that it can receive and process transportation requirements from other ERP or S/4HANA instances (in addition to the processing of system internal transportation demand).

Besides, a lot of enhancements have been done in planning, change management, and settlement areas while focusing on performance and usability.

A Final Word

Explore all the benefits of SAP TM and use them to your advantage by working with a dedicated SAP partner. Your transportation processes will surely improve for the better. All the best.