Transportation management systems (TMS) are the heart of any well-functioning supply chain. A TMS impacts every part of the supply chain process, from procurement and planning to logistics and lifecycle management. So it only makes sense that organizations which are able to harness a TMS experience have more efficient planning, execution, and higher customer satisfaction than their competitors. And SAP Transportation Management (TM) is one of the most advanced transportation management solutions on the market.
This article will navigate you through the features, benefits, and integration capabilities of the SAP Transportation Management system.
Let’s get started.
What is TMS in SAP?
The optimization of physical good transport and management of the logistics that come along with it are made possible with transportation management systems. Acting as part of the overall supply chain management system, a TMS will help automate tedious manual tasks, maximize the productivity of freight loading, track freight across all routes, and ensure a timely and efficient delivery of goods. This saves suppliers, businesses, and end-use customers valuable time and money.
SAP Transportation Management in particular helps organizations manage the entire transportation process, including planning and optimizing, forecasting, freight tendering, and charge management—all in real time. The solution covers all modes of transport (air, ocean, rail, and road) and is designed for shippers and logistics service providers. Making it even more flexible, your SAP TMS system can be deployed on-premise or in the cloud.
Features of the SAP Transportation Management System
SAP TMS was designed for all industries to help reduce transportation costs and improve logistics. Here’s a breakdown of some the key SAP TM capabilities and features:
Strategic Freight Management
Freight procurement and sales are critical in supply chain management. SAP TM allows you to streamline the quote-to-contract, predict future transportation requirements, and negotiate freight rates with customers, trucking companies, and logistics service providers.
SAP TM integrates orders and purchase orders from SAP S/4HANA and other third-party enterprise resource planning (ERP) systems to optimize freight order management for your company. It offers real-time order-to-cash and procure-to-pay processes to help manage changes in transportation demands. It also synchronizes sales and order scheduling to keep customer deliveries on time.
Transportation Planning and Optimization
Manual and automated planning, as well as optimization tools, help you to determine optimal resources and routes. By combining inbound and outbound transports and planning processes across locations, you can reduce freight costs.
Reporting and Analytics
With real-time data, you’ll be able to create reports and analyze data to make better business decisions. Along with S/4HANA, SAP TM also offers an extensive catalog of Fiori apps to visualize and support your business processes.
Benefits of SAP Transportation Management
Enterprise Resource Planning (ERP) systems are how most modern businesses manage critical information and provide performance metrics, but that doesn’t mean you need to ditch your ERP for something like SAP Transportation Management —this isn’t an either/or situation.
Integrating your ERP and SAP TM can provide your organization the technology infrastructure you need to enable better visibility, data insights, and faster results.
Here are a few main benefits of integrating your ERP system with the SAP TM module.
1) Improved Visibility Across the Supply Chain
An ERP alone won’t give you the real-time data on freight movements that can help you avoid issues before they pop up. But by integrating SAP TM, you’ll get a comprehensive view of your logistics functions and carrier’s performance. The solution will give you detailed reports across the supply chain using real-time shipping data, which is invaluable when it comes to managing freight units and orders, optimizing your TMS processes, and reducing overall costs.
2) Increased Automation
Integrating ERP with SAP TM increases automation by allowing the automatic selection of carriers. TM forecasts how a particular carrier will impact the business financially and then selects the most efficient carrier for transportation. The solution also allows automated order processing to eliminate that tedious work—yet another way you can reduce costs by eliminating manual errors.
3) Better Customer Experience
Many ERPs include customer relationship management (CRM) functionality. By integrating that CRM with SAP TM, you can take customer experience to the next level by:
- Letting customers schedule specific pickups based on time, location, and other details to be more accurate with deliveries.
- Managing shipment disputes due to scheduling, damage, and other issues.
- Gaining access to a single portal where users can update freight charges to show changes made during shipment.
- Managing forwarding orders to ensure agreement between business partners and maintain accurate data for your transportation plan.
4) Enhanced Transportation Planning
ERP and SAP TM give you access to better analytics and reporting to enhance transportation planning. Users can consolidate shipments based on load optimization, capacity, and other factors, helping to reduce shipment costs and drive efficiencies.
5) Deliver Best-of-breed Functionality
An ERP and SAP TM offer different but complementary benefits when it comes to functionality for your organization. The goal of your ERP is to manage business information like procurement, finance, and inventory, while SAP TM taps into your entire transportation lifecycle, including carrier performance, freight orders and costs, and dynamic shipment planning. Together, these best-of-breed tools can deliver the functionality needed to move your business forward.
How to Integrate ERP and SAP TM
Many organizations think of their ERP as a silver bullet. And while they are powerful tools, integrating them with SAP TM will give you the extra boost you need to help reduce costs, increase functionality, and improve your supply chain overall.
SAP TM seamlessly integrates with other SAP modules, such as sales order scheduling, order and delivery processing, and other logistics-related applications.
To make things even easier, SAP TM is delivered with out-of-the-box integration, including order-to-cash and procure-to-pay scenarios. You can also integrate freight settlement with SAP ERP billing and invoicing to ensure your business processes are moving full steam ahead.
Partnering with the Best
Need an extra hand in constructing your new SAP transportation plan? We’ve got you covered. Need help with another SAP-related project? We can help with that too. Our senior-level SAP experts are ready to apply their experience to your project to ensure that it succeeds. And, to give you a better idea of what to expect when partnering with us, we’ve included a sample profile for one of our SAP TM consultants.
Surety Senior SAP Transportation Management Consultant
- US Citizen
- 10+ years of cumulative SAP experience; Heavy background in the SAP SCM modules
- 7 years of direct SAP SAP Transportation Management (SAP TM) experience
- Led Greenfield Implementation of S/4 Embedded TM 1909
- Excellent end-to-end SAP TM system knowledge; Well-versed with SAP TM production support
- Strong in dealing with strict compliance, rules, and regulations
Contact us today to get started.