TM Domestic Road Freight FTL (Full Truck Load) Scenario

Transportation Management Overview

Introduction to the Webinar

• The webinar is hosted by Parinda, director and founder of Sasra Geek Solutions, introducing Mr. ADI Kumar as the speaker.

• Mr. ADI Kumar has over 15 years of experience in the SAP industry, focusing on Transportation Management (TM) for the last five years.

Importance of Transportation Management

• Transportation management is a crucial component of Supply Chain Management (SCM), which encompasses various processes including order-to-cash and procure-to-pay.

• It involves moving goods from one location to another, fulfilling customer requirements effectively.

Current Challenges in Supply Chain

• The COVID-19 pandemic disrupted global supply chains, particularly affecting manufacturing in China due to increased lead times and fears surrounding material sourcing.

• Alternatives for manufacturing locations are being explored, such as India and Vietnam, to mitigate reliance on China.

Lead Time Optimization Strategies

• There is a need for optimizing lead times due to increased demand for certain products during disruptions.

• China proposed infrastructure improvements to reduce shipping timelines by creating direct routes through regions like Pakistan and Iran.

Why Choose SAP TM?

Evaluation of Software Options

• Various software systems exist for transportation management; SAP TM is recognized within Gartner's Magic Quadrant as a top-ranking solution based on usability and business needs.

Target Users of Transportation Management Systems

• Two primary user groups identified:

• Shippers: Manufacturers focused primarily on product creation rather than transportation logistics.

Logistics Service Providers and Transportation Management

Understanding Key Roles in Logistics

• Logistic Service Providers (LSP): These entities act as forwarders, taking requirements from shippers and executing the logistics process or outsourcing it to carriers.

• Carriers: Defined as those who physically transport goods. They are typically truck owners or drivers responsible for picking up and delivering materials.

Distinction Between Freight Forwarders and Carriers

• Freight Forwarders: They gather transportation requirements and delegate the actual carrying of goods to logistic service providers or carriers.

• Examples of Carriers: Notable examples include FedEx, UPS, and local Indian carriers that provide logistics services.

Transportation Management Systems (TMS)

• Importance of TMS: The chosen transport management system must cater to both shippers' needs and LSP processes, with a focus on shippers due to their reliance on ERP systems like SAP.

• Collaboration Portal: Discussion about using a transparent system for creating shipments, which may not be directly relevant to the TMS module but is essential for capturing transportation requirements.

Shipper Scenarios in Transportation Management

• Outsource Transportation: Manufacturers outsource transportation tasks while focusing solely on production.

• International Outbound Transportation: Planning outbound logistics from a manufacturing plant to international customers.

Inbound vs. Outbound Logistics

• International Inbound Logistics: Importing materials into the country from abroad; an example includes receiving materials from China into India.

Transportation Scenarios and Optimization in SAPM

Overview of Domestic Outbound Transportation

• The speaker introduces a domestic outbound transportation scenario, focusing on plant A supplying three customers: B, C, and D.

• Customer names are modified for clarity; the focus remains on the supply chain from plant A to these customers.

• Various routes are discussed for transporting goods from plant A to customers B, C, and D, emphasizing flexibility in route selection.

Route Selection and Cost Efficiency

• Multiple routing options are presented (e.g., A to B, B to C), highlighting that there can be alternative paths based on operational needs.

• The importance of cost-effective routing is stressed; minimizing distance is crucial as costs often correlate with travel distance.

• The speaker notes that while certain routes may not be chosen due to cost considerations (like A to C), they could be viable if using a dedicated fleet.

Master Data Requirements for Transportation Management

• Initial data requirements for the transportation management system (TM system) include business partners such as customers, plants, carriers, and suppliers.

• Locations must be defined within zones; these zones represent specific areas necessary for effective transportation planning.

Defining Zones and Transportation Lanes

• Zones can vary widely in scope—from a single city to an entire country—based on client needs. This definition will be tailored during training sessions.

• Transportation lanes are established between points (A to B), detailing who will execute the transport. This information is critical for operational efficiency.

Modes of Transport vs. Means of Transport

• Modes of transport refer broadly to how goods are delivered (road, rail, air, ocean), while means of transport specify types used within those modes (e.g., trailers or trucks).

Transportation Charge Calculation and Process Overview

Understanding Charge Calculation in Transportation

• The transportation process involves selecting lanes, carriers, and calculating charges. Different providers have unique methods for charge calculation based on factors like weight, distance, or volume.

• Charge calculation rules must be defined within the system to determine costs accurately. This includes various parameters that influence how charges are calculated.

• Additional charges may apply, such as fuel surcharges for shipments. These considerations are crucial in international shipping contexts where multiple services incur different fees.

• Various service charges (e.g., customs clearing, insurance) contribute to the overall transportation cost and need to be accounted for in the charge calculation process.

Outbound Transportation Process

• The outbound transportation process can be executed through a standalone TM (Transportation Management) system or an embedded one within SAP HANA.

• In a standalone scenario, sales orders from SAP ERP or HANA create requirements that lead to order-based transportation requirements (OTR).

• Requirements generated in the system convert into freight units—the smallest planning unit used for organizing transport logistics.

• Freight orders are created from these units and subsequently lead to delivery proposals that facilitate actual shipment execution.

Embedded vs Standalone Systems

• In embedded systems, OTR generation is not necessary; freight units are directly planned without intermediate steps.

• Once a freight order is established, it is sent to the carrier for execution. Proof of delivery is required before settlement with service providers occurs.

System Demonstration Insights

• A demonstration will illustrate creating a sales order within an embedded system context and how it transitions into a freight order.

• Delivery proposals serve as notifications from the TM system indicating when deliveries should be created; this process remains consistent across both embedded and standalone systems.

Practical Application of Sales Orders

• A live demo will show how sales orders generate communication with the TM system upon creation—highlighting real-time data transfer between systems.

• The speaker emphasizes practical engagement by demonstrating how to manage sales orders effectively within the TM framework.

Freight Order Creation and Transportation Management Overview

Freight Unit and Order Creation Process

• The speaker discusses the creation of a freight order against an already established freight unit, emphasizing the importance of planning in this process.

• A profile is introduced to view the freight unit, with intentions to convert it into a planned freight order.

• The system identifies the selected freight unit number, and trucks are chosen as means of transport for assignment.

• A temporary assignment is made for the freight order; upon saving, a new freight order is created with only 2% utilization noted.

• The speaker checks if the document has been successfully created in the system, indicating that communication issues may be present.

Delivery Creation and Material Configuration

• The speaker attempts to assign a delivery location (DH in India), questioning its feasibility within the current setup.

• A new delivery is created from a sales order linked to the previously established freight unit, showcasing integration within systems.

• It’s noted that materials have been split into two pallets due to configuration settings—10 pieces per pallet—which affects how units are displayed.

Subcontracting Process and Charges Calculation

• Discussion on subcontracting processes where carriers are contacted for potential work assignments; charges calculation is mentioned but deemed unnecessary at this stage.

• Questions arise regarding business functions needed for activation in transportation management (TM), including organization structure considerations like transportation zones.

Transitioning from ECC to TM: Benefits and Flexibility

• Clarification on necessary business functions that need activation for embedded TM systems; configurations must align with TMS requirements.

• Comparison between existing ECC processes versus benefits gained by migrating to TM functionality; highlights increased flexibility in planning and charge detailing.

Advantages of Embedded vs. Standalone TM Systems

• Historical context provided about logistics execution within ECC systems, noting limitations such as lack of tendering options or multiple carrier choices available in TM systems today.

• Emphasis on optimization capabilities within TM that allow better load fitting into trucks while minimizing transportation costs through effective routing strategies.

• Limitations of not adopting TM over traditional methods are discussed, suggesting further exploration during training sessions.

Architectural Differences Between Embedded and Standalone TM

Understanding Standalone vs. Embedded Systems in S4

Overview of System Functionality

• The discussion begins with the distinction between standalone and embedded systems, emphasizing that functionality remains unchanged regardless of the system type.

• Clarification is provided that using the S4 system does not preclude the continued use of standalone systems; it’s a matter of preference for managing multiple instances.

Advantages and Disadvantages

• Standalone systems offer resilience against failures, as issues in one instance do not affect others, unlike embedded systems where problems can impact the entire database.

• The conversation highlights that while embedded systems have advantages like reduced master data shifts, they also come with limitations such as potential unavailability affecting all operations.

Collaboration Portal Limitations

• It is noted that certain functionalities are limited in embedded systems, particularly regarding access to collaboration portals which have been rebranded under different names.

Technical Aspects and Integration

• Questions arise about whether technical aspects will be covered in training sessions, specifically mentioning BOPF development within Transportation Management (TM).

• Confirmation is given that integration scenarios between EWM (Extended Warehouse Management) and TM will be included in training content.

Event Management and Training Scope

Advanced Topics Coverage

• Event management within Global Track and Trace will be addressed but categorized as an advanced topic requiring additional licensing.

Training Focus on TM 9.5

• The training will focus on TM version 9.5+, ensuring participants are updated on recent features and functionalities.

Transportation Cockpit Functions

Manual Planning Insights

• The Transportation Cockpit serves primarily as a manual planning tool rather than an automated solution; carrier assignments require user input unless optimized settings are configured.

Delivery Proposals Process

• Delivery proposals are described as a manual process where carriers get assigned to freight orders before delivery creation occurs.

Understanding Transportation Units

Definition of Trailer Units

• A trailer unit consists of a tractor engine coupled with a trailer; this terminology is crucial for understanding transportation logistics.

Role in Transportation Proposals

• Transportation proposals involve creating transportation units (TUs), which play a significant role when changing modes of transport during shipments.

Transportation Management Planning

Importance of Pre-Planning Transportation

• Effective transportation management requires planning ahead, particularly when generating requirements from sales orders or purchase orders.

• Outbound delivery and shipment creation are essential processes in transportation management, emphasizing the need for clarity in order handling.

Inbound vs. Outbound Transportation

• Transportation management is applicable not only to outbound shipments but also to inbound deliveries related to purchase orders.

• The integration of transportation management (TM) with confirmation processes is crucial for creating inbound deliveries linked to purchase orders.

Delivery Proposals and Freight Units

• Similarities exist between outbound and inbound cycles, where freight units play a significant role in managing delivery proposals.

• Payment settlements for transporters are handled separately, highlighting the complexity of financial transactions within transportation management systems.

Optimizing Routes in Transportation

Complexity of Route Management

• Managing routes for international shipments involves considering various modes of transport (e.g., air, road), which can complicate logistics.

• Optimizing routes based on cost and volume is essential; different stages such as pre-carriage and post-carriage must be individually optimized.

Master Data and Route Assignment

• The assignment of routes to transportation planning ensures that the best possible route is selected based on predefined criteria.

• Master data plays a critical role in determining optimal routing options within the TM system.

Event Management and Bidding Capabilities

Event Management Integration

• While event management isn't mandatory, it enhances tracking capabilities within transportation processes by monitoring events automatically.

Tendering Processes in TM

• SAP TM includes bidding capabilities such as peer-to-peer tendering and broadcast tendering, allowing flexibility in carrier selection based on responses received.

Resource Utilization Tracking

Resource Scheduling Considerations

Understanding Gantt Charts and Freight Orders

Purpose of Gantt Charts

• Gantt charts are useful for planning freight orders, allowing users to visualize scheduling issues and reschedule automatically if problems arise.

Clarification on Freight Terms

• A freight order refers specifically to a shipment, while a freight unit is a collection of goods along with packing materials. Resources must be assigned correctly to the freight order.

Complexity in EWM and WM Integration

• Activating Extended Warehouse Management (EWM) or Warehouse Management (WM) can complicate processes due to the flow of information between systems, particularly when integrating with Transportation Management (TM).

Comparing ELRA and TM

Advantages of TM over ELRA

• The discussion highlights that tendering multiple carriers is possible in TM but not in ELRA. Further points about advantages were requested for clarity.

• TM allows for better route selection and load planning compared to ELRA, which lacks these optimization features.

Limitations of ELRA

• In ELRA, carrier tendering is limited; users can only assign one carrier without advanced conditions or service options being available.

BRF+ Conditions in Transportation Management

Importance of BRF+ Conditions

• Understanding BRF+ conditions is essential for TM consultants as they play a crucial role in configuring and executing documents related to freight orders.

Learning Requirements for Consultants

• While perfection isn't required, familiarity with BRF+ conditions will be part of the training course for consultants working within this framework.

Closing Remarks and Next Steps