Transportation management (TM) in SAP S/4HANA consists of business processes that drive the offering, selling, demand handling, assignment, planning, procurement, subcontracting, steering, documenting, and settling of transportation services within companies and for logistics service providers (LSPs).
The most simplistic way to define TM is “moving cargo or people from one place to another.” Transportation today is a highly significant factor in logistics, as it’s related to a large amount of logistics costs and is a major contributor to the reliable delivery of any kind of cargo. It’s essentially the backbone of the global supply chain.
Increased globalization has made it apparent to companies that transportation-related processes can’t be managed without the support of software tools for handling certain aspects. These include service level-compliant organization of all movements of goods, availability of affordable transportation capacity, proper communication with partners and peers in the logistics network, and legal compliance of all transportation-related movements of goods.
In this post, we’ll explore TM and its functionality in SAP S/4HANA. First, let’s look at how standard software elevates transportation processes.
Standard Software for TM
Transportation software can be assigned to one of three categories: legacy systems, best-of-breed systems, or standard software systems. LSPs tend to use legacy or best-of-breed software that is specialized for transportation; however, shippers usually use standard software, since they already run many integrated processes. Standard software is a group of programs and applications—like SAP S/4HANA—used to solve or process many similar tasks in an enterprise.
By using standard software, companies can avoid using individual or legacy solutions to cover common processes, as this practice often leads to system landscapes that are fragmented or hard to maintain. Individual software solutions often produce an increased integration effort and high complexity of data exchange and consistency. Even the use of best-of-breed software brings the risk of different areas of an enterprise using different software solutions and, as a result, splitting further apart. This leads to increased effort and cost since the release development of those tools is completely independent with no guarantee that they will always fit together. Large companies may end up with hundreds of systems in their landscape that need to be maintained and integrated in terms of master data consistency, release levels, interfaces, and cross-application processes. In the long term, standard software can be implemented and integrated in an enterprise much more efficiently than multiple self-developed or independently designed best-of-breed tools.
TM in SAP S/4HANA
As the main component used to coordinate both shipper- and LSP-focused transportation processes, TM started as a standalone SAP Business Suite application that was integrated with one or multiple separate SAP ERP systems. With the arrival of SAP S/4HANA, TM functionality was embedded in the software to achieve a tighter integration into the master data, logistics and financial processes, and digital core. SAP S/4HANA is SAP’s long-term strategic enterprise software, meaning that all components should be available as embedded parts of the suite or as integrated products to comply with maintenance regulations.
TM is also available as a public cloud application. However, its scope is limited in comparison to TM in on-premise SAP S/4HANA release 2022. The main scope of TM in SAP S/4HANA Cloud, public edition includes the creation of freight orders, planning of those orders in an external instance, and getting the planning results back into TM for further tendering, execution, and settlement. Individual processes, master data, and configuration-based process variants can’t be defined in the current version.
Basic and Advanced Shipping in Transportation
As TM was moved into SAP S/4HANA, there was the need for synchronization with the classic transportation component of Logistics Execution (LE-TRA), SAP ERP’s transportation management module for shippers. The ability to use LE-TRA has been extended until the end of 2030; however, the decision was made to define a two-level scope for TM functionality.
Transportation Management (Formerly Known as Basic Shipping)
The basic version of TM contains all semantic functions that were part of LE-TRA and are now available in a comparable way as part of TM in SAP S/4HANA. The TM basic shipping scope is part of the SAP S/4HANA license. However, enhanced or engine-based functions aren’t part of this scope.
Advanced Transportation Management (Formerly Known as Advanced Shipping)
"Advanced TM” describes the full scope of TM either for extended utilization by shippers or end-to-end LSP operation. It requires a specific license and isn’t included in the standard SAP S/4HANA license.
About the Transportation Management with SAP S/4HANA Book
SAP’s TM solution has evolved substantially since its release—especially with the introduction of SAP S/4HANA. Our book Transportation Management with SAP S/4HANA provides the background information you need on transportation and logistics, and introduces the latest components of the TM ecosystem.
Start with the basics of transportation processes and the role they play in your organization. Once you understand the foundation of TM and the necessary software for performing business processes, take a closer look at how they’re incorporated into SAP S/4HANA. You’ll step further into the technical architecture of TM and see how it integrates with adjacent processes.
The next chapter explains the general master data of SAP S/4HANA in the context of TM (e.g., business partners) and transportation-specific master data, such as networks and resources. It also gives an overview of remodeled master data usage in SAP S/4HANA, which replaces the transmission-based technology of SAP Business Suite.
The book illustrates how to create and manage transportation demand in TM for both shipper and carrier scenarios. You’ll understand freight units as the basis for planning; package units and consignment orders as groupage elements; and transportation units for modeling truck, trailer, container, or railcar scenarios. Then learn how freight orders and bookings work, including their use as subcontracting documents to carriers or other service providers.
Get details on execution and monitoring for handling freight, providing visibility of shipments, and handling compliance issues that might arise from trade regulations and hazardous cargo. The charge management chapter explains cost and price calculation within TM and provides details on how to use it for shipper processes, including setting up agreements (contracts) and defining tariffs and rates. Then you’ll learn about the payables process that shippers face with their subcontractors.
You’ll become familiar with the necessary integration and migration processes. Learn about integration between TM and SAP S/4HANA’s analytics applications, as well as extended warehouse management (EWM) for traditional and transit warehouse management. Preview the migration steps for moving from SAP Business Suite-based SAP TM to TM in SAP S/4HANA.
Close the book with implementation best practices, which highlight specific topics to keep in mind when you’re undergoing a TM implementation project. Get a synopsis of industry challenges and the future of TM.
Who Is This Book For?
This book is for anyone looking for a comprehensive guide to TM functionality and use. SAP logistics consultants will gain a deep understanding of TM processes, and enterprise management members and IT decision makers considering a TM implementation will be provided with the necessary information for their projects.
About the Authors
Dr. Bernd Lauterbach is chief solution architect for transportation management at Westernacher Consulting in Heidelberg. Until 2019, Bernd worked for SAP SE for 25 years. He gained 13 years of experience as a development manager for SAP TM and as a development architect for SAP Event Management, SAP Auto-ID Infrastructure, and SAP ERP Logistics Execution (LE-TRA). Subsequently, Bernd was responsible worldwide as chief solution architect for the logistics industry at SAP IBU Travel & Transportation – Cargo & Logistics. An additional focus of Bernd’s work is supporting many projects for Westernacher customers (LSPs and shippers), where he brings together LSP or shipper needs and SAP solution competence in terms of customer requirements, business processes, target architectures, and software capabilities.
Dr. Jens Gottlieb has worked in supply chain software development at SAP SE in Walldorf, Germany, since 2000. He is chief product expert in the TM standard development unit. As the product owner responsible for transportation planning and the transportation network, Jens leads a development team. He has worked as a developer, development architect, and development manager, and has led internal development projects as well as a standard-related custom development project for a TM customer in the beverage industry.
Meike Helwig leads the Center of Expertise for transportation management at SAP SE in St. Leon-Rot. She is responsible for managing and delivering services for the premium customers of SAP SE in the EMEA region. Together with her team, she proactively supports customers during the whole lifecycle of a TM system with technical and advisory services. Furthermore, her team is responsible for solving critical situations and escalations in customer projects in the area of TM.
Dr. Christopher Sürie has worked for more than 18 years as a chief consultant in supply chain optimization and transportation management at SAP Deutschland SE & Co KG in Walldorf, Germany. In this position, he has been involved in numerous international customer projects, implementing both SAP APO and SAP TM and focusing on their planning capabilities and optimization engines in production and transportation. He worked as a solution architect in several SAP TM projects and taught numerous SAP TM customer trainings.
Ulrich Benz is an SAP supply chain management specialist with a focus on transportation management. As a consultant, he has managed and supported multinational IT transformation projects covering different industries over the past 11 years.
How to Purchase
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