Transportation management is one such aspect that holds the top position in the current supply chain businesses. Given how the ongoing pandemic has affected the supply chain on every level, businesses today require more diverse, simplified, digitized, and reliable ways to manage their transportation operations.
You have to make sure that you can never go wrong with the delivery and management of your products across the supply chain. To ensure such parameters, businesses use platforms like the SAP-based Transport Management that have positively impacted delivery in various industries.
While previously SAP TM was embedded only in the logistics management industry solution, the latest update of SAP S/4 HANA adds improved dynamics and multiple-level functionality to this offering, making it even more appealing for the transportation industry.
The S/4HANA TM has a new interface that is easy to use and eliminates the complexity of using multiple interfaces and controls data duplication.
Have questions about S/4 HANA Transport Management? Let’s understand these functionalities in detail:
What is Embedded TM in SAP S/4 HANA?
S/4HANA 1709 onwards introduced users with an additional option for the deployment of SAP Transportation Management. This feature allowed the TM functionality to utilize the same S/4HANA instance. Fast forward to 2021, S/4 HANA continues to upgrade its offering and has recently included SAP TM as an additional feature to the existing transportation management capabilities.
With the latest update, SAP aims at adding flexibility and removing the need for any extra hardware or database that is required for using the SAP S/4 HANA platform in transportation management. This way it can be carried out in a classic side-by-side implementation method.
This side-by-side implementation method is an appealing option for businesses with several systems using SAP-based ERP. If you want to implement these functionalities as a standalone transportation management system, that is possible as well. SAP TM is also a beneficial choice for those who are currently unable to migrate to the SAP S/4 HANA platform but are willing to take advantage of the SAP TM system.
What are the main 5 components that make up the SAP TM?
- Order Management: This helps in receiving orders based on requirements directly from the sales process and forwards the order for the required resources to be allocated by the freight forwarders to plan and execute.
- Transportation Planning: This is the step where it is decided how the resources will be transported from one place to another is determined. This can either be a manual or an automatic process, but the planning is done keeping factors like the type of resources, transportation constraints, and traffic rules in mind.
- Transportation Execution: This part deals with tracking and determining the status of the shipment. In this part, the probable dates for receiving the shipment and everything else are taken care.
- Transportation Charge Management: The carrier’s total cost and all other inclusive expenditures are calculated beforehand so that the carrier can be paid. Enough room and flexibility are kept for issues that may arise because of the variation in the prices due to some unavoidable circumstances.
- Freight Settlement: This is the last stage, and it deals with the payment invoice. It forms the link between SAP TM and the ERP that sends the invoice to the company’s finance department, which is then verified, and the payment is made to the carrier.
What are the main advantages of the SAP TM option?
- A smaller database and hardware are required as transportation monitoring can be done by using the existing SAP S/4 HANA infrastructure.
- It is easy to use due to a better user interface powered by Fiori UI and the S/4 HANA platform.
- As both the ERP and the TM share single data objects, there is no need to duplicate the customers, vendors, material master data, and other information in the TM platform.
- SAP TM works using real-time data to ensure there is no issue with planning and tracking shipment.
- There is a lot of reduction in the cost of ownership due to lesser monitoring and replication effort.
New functionalities and features in the latest SAP S/4 HANA TM:
Some functionality upgrades in the existing SAP S/4 HANA TM system make the new variant a more lucrative offer for the transportation industries. Some of the features are:
- Loading Direction Profile: This is a new feature introduced under the “resource general setting” node, and this helps in the prior mentioning of the orientation in which the goods have to be loaded in the freight. And this is to be followed both during the loading and unloading process.
- Vehicle Loading Profile: This is also another new feature added under the “resource general setting” node, which helps the transporter plan and optimizes the vehicle as per the cargo profile. The container of the freight carrying transportation is chosen based on the parameters like weight and volume.
- Attached Equipment Profile: Also a new addition to the general settings option, this mentions the availability and the demand for special equipment. This information is used in the planning process when the location attached equipment profile is compared with the actual resource attached.
- Location Calendar: The location calendar has introduced a new feature for the charge calculator process under the SAP TM for a particular region or country. This system is primarily used during the transportation planning process, where the geographical location and the nature of cargo determine the transportation cost. It also uses the calendar to identify a non-working day and can ask for a higher rate for shipping on those days.
- Handling of Incorrect Inbound Messages: This feature helps understand if any error message comes and how they are handled in the SAP TM module for the freight documents, specifically for the inbound freight. If it is set to default, then the inbound document will not be changed and will be directly rejected.
The latest features and functionalities of the SAP S/4 HANA Transportation Management module now solve and optimize functions across the global supply chain. With these new changes, using SAP for TM will drastically improve transportation planning and execution to a very large extent.