SAP Transportation Management: A Comprehensive Guide

Introduction to SAP Transportation Management (SAP TM)

SAP Transportation Management (SAP TM) is a comprehensive solution designed to streamline transportation logistics for various industries, introduced by SAP AG in 2017. SAP transportation management enables businesses to manage their logistics network holistically, reduce costs, and enhance operational efficiency through integrated freight settlement, advanced transportation planning, and real-time visibility. SAP transportation management system supports domestic and international freight management, ensuring high customer service levels and regulatory compliance. With its seamless integration into SAP ERP and S/4HANA, SAP transportation management system enhances order and process management, offering a robust tool for optimizing transportation logistics and improving overall supply chain execution.

Understanding SAP Transportation Management Operations

SAP TM for beginners – Route determination dependency:   

• Country and departure zone of delivering plant  
• Country and transportation zone of ship to party  
• Shipping condition from customer master  
• Transportation group from the material master record  

Most essential SAP transportation management functionalities for beginners:

• Order Management
• Analytics 
• Shipment Management 
• Planning
• Freight Management

SAP TM for beginners benefits of the reporting functionality

The analytics of the SAP transport module provide real-time insights, allowing monthly KPI tracking by collecting data from various company departments. Analysis of transport duration, timeliness of goods arrival, follow-up on transports, and carrier rates offer a better overview for strategic decision-making. In features of SAP transport module, customization options enable defining transport modes, such as sea transport with distinct main and pre-leg segments, enhancing trackability. The SAP TM Module process offers simplicity and flexibility, starting with generating a sales order, automatic route determination, and advanced reservation management for loading and freight.

How Does SAP TM Help Your Business?

SAP Transportation Management system (SAP TM) is one of the pivotal sap tm module in optimizing logistics by reducing transportation costs and enhancing efficiency. It seamlessly manages inbound and outbound freight, offering traceability and visibility for orders, shipments, and logistics processes. Businesses benefit significantly from using SAP transportation management system, experiencing cost reductions and improved operational performance. Additionally, the system enhances carrier collaboration and resource utilization, ensuring efficient end-to-end order and process management. By integrating with SAP ERP and S/4HANA, SAP transportation management system supports comprehensive freight planning, execution, and settlement, ultimately driving better logistics efficiency and cost management.

Functionality and Features of SAP:

Interactive and Mass Processing 

SAP Transport Management System can manage freight planning and advanced interactive planning. This SAP TM Module tool allows you to visualize order details and maps of transit routes. The SAP TM Module will enable planning to happen both interactively and via mass processing.

Document Management

This SAP TM module helps you create documents, manage status, and print bills for lading (road, sea, air), labels, forwarding instructions, and more. SAP tm module 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 must be transported together for customs reasons.

Order Management

If you integrate this SAP Transport Management System into the SAP TM module with an SAP ERP system, SAP transportation management would be integrated using Process Integration (PI) interfaces. Orders and deliveries from SAP ERP can be converted into SAP transportation management system as transportation requirements automatically. Suppose you run SAP transportation management system or SAP TM module as a standalone system. In that case, 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.

You may also integrate SAP transportation management with SAP Hybris Commerce as an online retailer.

Transportation Planning

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

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

 Easy Execution:

• Integration with SAP Event Management (EM) a SAP TM module 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.

What’s New in SAP Transportation Management 1809?

In SAP Transportation Management 1809, a SAP tm module, several significant features and enhancements have been introduced to streamline transportation processes. Firstly, there’s a simplified integration with other S/4HANA processes, eliminating the need for Core Interface (CIF) and enabling direct access to business partners and product master data within S/4HANA. This integration is further enhanced with harmonized customizing and no replication of logistics business documents. The update includes embedded analytics functionality, leveraging Core Data Services to provide advanced analytics capabilities. Moreover, SAP Transportation Management 1809 integrates seamlessly into embedded applications in S/4HANA and supports side-by-side scenarios, enabling the processing of transportation requirements from other ERP or S/4HANA instances. These enhancements in sap tm module, along with improvements in planning, change management, and settlement areas, emphasize performance and usability enhancements, offering a more efficient and integrated solution for transportation management.

Security Risks and Best Practices in SAP Transport Management

Security Risks:

• Unauthorized access
• Data breaches
• Insecure transport protocols
• Lack of monitoring
• Segregation of duties.

To tackle the SAP Transport Management System risks in TMS, it’s pivotal to derive relevant access controls, use secure transport protocols, segregate duties, and audit transport activities. At the same time, encryption and digital signatures should be implemented to ensure trust.

Basics of Transportation Management System (TMS)

A SAP Transport Management System (TMS) helps in the efficient planning and execution of the physical movement of various goods. SAP Transport Management System, a SAP TM module is utilized by different supply chain members, from manufacturers to distributors and third-party logistics providers (3PLs)- any parties that want to streamline shipments.

Overview of Transportation Planning Features

In a comprehensive SAP Transport Management System,  a SAP Transportation Management System (TMS), the transportation process creates transport requests and quotes, followed by load tendering to carriers who plan capacity and cargo distribution. Order management features enable users to enter and overview orders, including manual or automatic order entry with route generation, transport, driver assignment, and ETA calculation. 

Orders, routes, and assigned transports are accessible to planners and drivers via a dashboard, with automatic document linkage for easy access on mobile devices. SAP Transport Management System has Tendering functionalities as the SAP TM module include automated tendering with carrier selection methods like least-cost, auto-award, allocations, service-based, and customer-based. Shipment rate management incorporates a rate engine to calculate transportation rates based on rules and custom pricing, facilitating automatic client quoting. Load planning tools allow for truck, trailer, and container loading space planning, with features like master data storage and 3D load plan visualization for efficient space utilization.

Overview of Transportation Execution Features

SAP Transport Management System, execution phase of the transportation management SAP TM module, a TMS facilitates fleet management, dock scheduling, and settlement processes. Fleet management functionalities allow for the centralized management of assets, including driver and equipment assignment, dispatch management, and financial settlement. Advanced fleet management software may also enable monitoring of fuel consumption, vehicle maintenance, and remote control of trucks. Integration with warehouse and yard management systems enables efficient dock scheduling and load sequencing, optimizing transportation plans based on warehouse and transportation constraints. Additionally, SAP Transport Management System will  streamline documentation management and settlement processes by generating digital bills of lading invoices and conducting freight auditing, automating billing, invoicing, payment setup, and claims management.

Overview of Transportation Visibility Features

In transportation visibility, a SAP Transport Management System facilitates connectivity through portals for partners and customers, allowing order tracking and status updates. While TMSs support basic routing, specialized software is often used for advanced route optimization. Real-time tracking and tracing technologies, such as telematics and RFID, enable continuous monitoring of shipment locations for customer information, security, and scheduling. Business Intelligence and analytics tools provide real-time insights into transportation data, enabling performance analysis by carrier, product, or route, cost analysis by SAP Transport Management System mode, and margin monitoring for workflow improvement and informed decision-making.

TMS Integrations

TMS is an integral part of the Internet technology sector. For TMS to be effective, it has to be smoothly integrated across various systems, enabling communication across channels. A brief look at the integration with multiple channels:

ERP: Connecting TMS with ERP is an integral avenue because it is the core of the company’s ecosystem. 

Warehouse Management System (WMS) Integration: Connecting WMS with TMS facilitates efficient warehousing and coordination of shipping operations, enabling the sharing of shipment information and scheduling activities.

Order Management/Inventory Management/Retail/eCommerce Integration: Integrating specialized software with TMS streamlines distributors’ shipment management, enhancing operational efficiency.

Accounting/Settlement Tool Integration: SAP Transport Management System utilizes standalone accounting solutions alongside TMS ensures accurate billing, invoicing, and claims management.

Business Intelligence (BI) Integration: Connecting TMS with specialized BI platforms enables comprehensive analysis of transportation-related data, enhancing decision-making capabilities.

External Carrier or 3PL System Integration: Integrating SAP Transport Management System with external systems facilitates the smooth exchange of transportation data, allowing for the provision of load details and shipment tracking.

Freight Marketplaces Integration: Integrating TMS with freight marketplaces enables the utilization of load boards and market capabilities seamlessly within the interface, optimizing truck utilization for 3PLs or owner-operators.

Conclusion

SAP Transportation Management (SAP TM) offers robust features like advanced planning, real-time visibility, and seamless ERP integration, enabling businesses to streamline logistics, reduce costs, and enhance efficiency. The latest SAP Transportation Management 1809 updates emphasize simplified integration and embedded analytics, showcasing continual improvement. To maximize benefits, partnering with dedicated SAP Transport Management System experts ensures successful implementation and optimized transportation management.