What is SAP Transportation Management ?

Businesses constantly adjust their supply networks to enhance productivity and reduce costs. Improving freight transportation efficiency can be challenging, but SAP TM (Transportation Management) is a dedicated software developed by SAP AG to address this. The SAP serves the Transportation Management Software industry and helps businesses to reduce transportation expenses while increasing logistical productivity and flexibility. With SAP TM, you can effectively track and monitor orders, shipments, goods, and logistics procedures for both domestic and international freight.

SAP TM has significantly advanced transportation logistics and was introduced as a standalone software by SAP AG in 2017. By implementing SAP Transportation Management, companies can efficiently manage their transportation operations and gain better control over the entire shipment process, improving logistics efficiency.

What is SAP TM - Table of Contents

What is SAP TM? What can SAP TM do? SAP TM Features Benefits of SAP Transportation Management Relationship between SAP TM  and SAP EWM How Does SAP TM Help Your Business? FAQs Conclusion

What is SAP TM?

SAP TM is a robust software solution created by SAP to help businesses manage transportation and logistics operations more effectively. SAP TM is a central platform that simplifies and optimizes transportation activities, providing smooth coordination and visibility throughout the entire transportation cycle.

SAP Transportation Management facilitates all tasks associated with physically transporting products from one location to another. SAP TM is a centralized platform that streamlines and optimizes transportation activities, ensuring seamless coordination and visibility throughout transportation. 

You can use SAP TM to carry out the following tasks:

• Create remittance orders for your procuring parties.
• Transfer orders and deliveries from an ERP system
• Create goods reservations
• Plan the transport and choose the carriers
• Transport services up for bid
• Monitor and manage the transportation
• Calculate the shipping costs for both the ordering party and the delivering party.
• Consider international commerce and hazardous materials regulations.

If you want to enrich your career and become an SAP TM professional, enroll in "SAP TM Training". This course will help you to achieve excellence in this domain.

What can SAP TM do?

SAP TM (Transportation Management) is a comprehensive solution that provides a variety of optimization and streamlining capabilities for transportation processes.

Some of SAP TM's most notable features are as follows:

1. Interactive and Mass Processing: SAP TM enables both interactive and mass processing of transportation orders, allowing for the efficient administration of vast quantities of transportation data.
2. Document Management: Shipping instructions, bills of lading, and customs paperwork are some transportation-related documents that may be stored, organized, and retrieved using the system's robust document management features.
3. Order Management: Transport orders may be created, tracked, and updated efficiently with SAP TM. Consolidating, dividing, and prioritizing demands are all options it provides.
4. Transportation Planning: Optimal transport plans can be formed considering aspects like transport costs, delivery dates, and limits using the system's sophisticated planning algorithms and optimization methodologies. This is useful for optimizing travel routes and maximizing available resources.
5. Transportation Execution: SAP TM supports the execution of transport procedures, such as the selection of carriers, the tendering of loads, and the tracking of goods. It makes real-time visibility into the status of shipments and event monitoring easier to achieve.
6. Freight Settlement: It offers the ability to calculate the cost of shipping goods, verify invoices, and pay with carriers. This guarantees a proper and effective administration of the finances associated with transportation costs.

These are some of the applications that SAP TM can serve. In general, SAP TM assists companies in streamlining their transportation processes, improving visibility and control, maximizing resource utilization, and boosting customer satisfaction.

SAP TM Features

SAP TM provides a wide variety of capabilities that may be utilized to manage transportation activities in an efficient manner.  Below is a list of some of SAP TM's important features:

1. Forwarding Order Management
2. ERP Logistics Integration
3. Freight Order Management
4. Planning
5. Forwarding Settlement and Freight Settlement
6. Master Data and Transportation Network
7. Business Context Viewer in SAP TM
8. Enterprise Services and ESR Content.

Know them in detail: 

• Forwarding Order Management: SAP TM combines orders and purchase orders from SAP S/4HANA and other enterprise resource planning (ERP) systems to help your company handle goods orders better. It has order-to-cash and procure-to-pay systems that work in real-time to help keep up with changes in transportation needs. It also ensures that sales and orders are scheduled simultaneously so that customers' orders arrive on time.
• ERP Logistics Integration: SAP TM works well with ERP systems like SAP S/4HANA to keep shipping data and processes in sync. This integration ensures that everything is visible from beginning to end, making it easier for transport and other business processes to work together. It lets SAP TM and ERP modules like Sales and Distribution (SD), Materials Management (MM), and Financial Accounting (FI) share data in real time. This makes sure that logistics information is correct and up-to-date.
• Freight Order Management: With this feature, companies can handle freight orders, including combining them, choosing a carrier, and setting up a schedule. It lets you best plan and run complicated transport routes by supporting multiple-stop scenarios.
• Planning: SAP TM has advanced planning tools to help transportation processes run more smoothly. It considers things like demand, capability, limitations, and service needs to develop the best transport plans. It allows organizations to use their resources better, cut costs, and provide better customer service.
• Forwarding Settlement and Freight Settlement: SAP TM modules have features that help freight forwarders and carriers settle their bills quickly and easily. It automates calculating, verifying, and balancing freight costs, ensuring that business partners are paid correctly and on time.
• Master Data and Transportation Network: The strong master data management features offered by SAP TM make it possible for businesses to store information that is pertinent to the transportation industry, including carriers, routes, products, and locations. In addition, it makes management of transportation networks easier, enabling businesses to model and improve the efficiency of their transportation infrastructure.
• Business Context Viewer in SAP TM: This feature shows data about transport in a visual way so that users can analyze and keep an eye on key performance indicators (KPIs) and performance measures. It has easy-to-use dashboards and reports that help users understand how transportation processes work and make smart choices.
• Enterprise Services and ESR Content: The Enterprise Service Repository (ESR) is a place where SAP TM stores all of its business services and content. These services make integrating other SAP modules and systems from outside SAP easy. 

Benefits of SAP Transportation Management

SAP Transportation Management (TM) offers several benefits that can positively impact businesses. 

Here are some key benefits of SAP TM:

1. Improved Visibility Across the Supply Chain: SAP TM provides organizations with real-time visibility into transportation activities, enabling them to trace shipments, monitor delivery status, and proactively address issues and delays. This increased visibility allows for improved decision-making, enhanced collaboration with suppliers and customers, and increased supply chain transparency.
2. Increased Automation: SAP TM automates various manual processes and duties, including order creation, carrier selection, and freight invoicing. By eliminating manual interventions and streamlining workflows, businesses can increase operational efficiency, decrease errors, and save time and resources.
3. Better Customer Experience: With SAP TM, businesses can guarantee on-time deliveries, accurate order monitoring, and proactive customer communication. This increases consumer satisfaction and brand loyalty. Additionally, the system enables companies to provide value-added services, such as delivery notifications, appointment scheduling, and proof of delivery, thereby enhancing the overall client experience.
4. Enhanced Transportation Planning: SAP TM provides sophisticated planning capabilities, taking into account a variety of factors such as demand, capacity, constraints, and service requirements. Businesses can increase resource utilization, decrease transportation costs, and enhance delivery reliability by optimizing their transportation arrangements. Efficient planning also contributes to the reduction of idle miles, the diminution of carbon footprint, and the promotion of sustainable transportation practices.
5. Deliver Best-of-breed Functionality: SAP TM provides comprehensive and industry-specific transportation management capabilities. It facilitates domestic and international shipments, multi-leg routes, cross-docking, and intermodal transportation. With its best-of-breed functionality, organizations can optimize their transportation operations using standardized processes, industry best practices, and sophisticated features.

Relationship Between SAP TM and SAP EWM

SAP's supply chain management systems include both SAP TM (Transportation Management) and SAP EWM (Extended Warehouse Management). Even though SAP TM and SAP EWM are used for different things, they work well together and integrate with each other in the supply chain.

The relationship between SAP TM and SAP EWM can be summarized as follows:

1. Integration: The seamless SAP TM integration and SAP EWM ensures effective coordination between warehouse operations and transportation management. Thanks to the integration, information such as transportation orders, delivery schedules, and inventory status can be exchanged between the two systems. This interface makes sure that shipping schedules match up with warehouse activities, enabling efficient order fulfillment and prompt dispatches.
2. Order Fulfillment: SAP TM and SAP EWM work together to speed up the process of fulfilling orders. SAP TM plans transportation, chooses carriers, and schedules shipments based on what customers want and how they want it delivered. SAP EWM, on the other hand, handles warehouse operations like picking, packing, and shipping, as well as keeping track of inventory. The two systems work together to sync transportation plans and storage activities. This makes filling orders and getting them to customers on time easy.
3. End-to-End Visibility: When SAP TM and SAP EWM are combined, businesses can see their supply chain from beginning to end. Shipments, stock levels, and order status can all be tracked and monitored in real time with this level of transparency, which extends from transportation planning and execution to warehouse operations. When businesses have full insight into their supply chains, they can solve problems ahead of time, make strategic decisions, and boost productivity.
4. Optimization and Efficiency: Gains in supply chain optimization and efficiency are made possible by combining SAP TM and SAP EWM. The SAP TM integration between the two platforms facilitates the improvement of processes and maximizes available resources provided to customers. Organizations can save money on transportation costs, shorten order processing times, and boost operational efficiency by coordinating transportation planning with warehouse operations.

[Related Article: SAP EWM Interview Questions]

How Does SAP TM Help Your Business?

Enterprises can benefit in various ways from implementing SAP TM (Transportation Management), including the opportunity to improve customer service and supply chain operations while streamlining transportation procedures. 

SAP TM solution has been made to meet many different businesses' transportation and logistics needs. It assists them in lowering transportation expenses while increasing logistics efficiency and flexibility. It improves the architecture of SAP's existing manufacturing transportation service. You can handle all inbound and outbound domestic and international freight in the same environment using SAP TM, and you can gain traceability and visibility of orders, shipments, goods, and logistical activities. You can also schedule shipping transportation for several typical order types, such as sales and purchase orders, returns, and stock transfers. All of this guarantees that the supply chain runs smoothly.

Here are some ways in which SAP TM can help your business:

1. Efficient Transportation Planning: SAP TM gives businesses improved tools for planning transportation, so they can find the best routes, choose the right carriers, and combine shipments. By making the most of their transportation plans, companies can cut costs, speed up delivery times, and be more efficient overall.
2. End-to-End Visibility: SAP TM provides real-time visibility into transportation processes, allowing businesses to track and monitor shipments, analyze transportation performance, and resolve issues and delays proactively. This visibility facilitates customer service enhancement, the guarantee of on-time deliveries, and the expeditious resolution of transportation-related issues.
3. Collaboration and Integration: SAP TM facilitates collaboration and integration between various supply chain stakeholders, such as carriers, suppliers, and consumers. It enables seamless communication, data sharing, and coordination, resulting in enhanced collaboration, streamlined processes, and greater supply chain effectiveness overall.
4. Compliance and Risk Management: SAP TM facilitates compliance with transport regulations and standards for enterprises. It enables the accurate documentation and recording of transportation-related data, thereby facilitating compliance with legal requirements and decreasing the risk of noncompliance fines.
5. Freight Cost Management: Companies can use SAP TM's rate control, contract management, and freight settlement functions to keep their freight costs to a minimum. As a result, it helps organizations manage transportation costs and spot areas for savings by providing tools for analyzing freight spending, optimizing carrier contracts, and monitoring cost performance.
6. Analytics and Reporting: SAP TM has powerful reporting and analytics features that give enterprises a deeper understanding of their transportation operations in terms of efficiency, cost, and other essential variables. By basing decisions on empirical evidence, organizations can boost efficiency, reduce waste, and eliminate errors.
7. Scalability and Flexibility: SAP TM is a flexible system that can expand with your company as your demands do. It's flexible enough to meet the transport needs of various sectors and industries, and it works with multiple transport methods (including land, air, and sea). 

SAP TM helps businesses improve transportation planning, achieve end-to-end visibility, improve collaboration, ensure compliance, manage freight costs, leverage analytics for informed decision-making, and adapt to changing business needs. 

SAP TM FAQS

1. What is SAP TMS used for?

SAP TM (Transportation Management System) plans and handles transportation processes, such as selecting carriers, figuring out the best routes, and managing freight costs.

2. Is SAP TM part of S4 Hana?

Yes. SAP TM (Transportation Management) is a part of the SAP S/4HANA suite. It offers full transportation management capabilities that work with other modules for end-to-end business processes.

3. what are the shipping types in SAP TM?

The shipping types in SAP TM include Full Truckload (FTL), Less Than Truckload (LTL), Ocean, Air, Intermodal, Rail, and Courier.

4. what skills are required for SAP TM?

Knowledge of transportation management processes, configuration and customization of SAP TM, transportation planning and optimization, logistics operations, supply chain management, and proficiency with SAP TM functionalities and tools are necessary for SAP TM.

5. How do I create a freight unit in SAP TM?

To create a freight unit in SAP TM, 

• You need to go to the Freight Order Management work center, 
• Select the relevant freight order, 
• Navigate to the Freight Units tab, and 
• Click on "Create Freight Unit." 
• Then, you can enter the necessary details, such as handling units, weight, volume, and other relevant information.

6. What are SAP TMS capabilities?

SAP TM (Transportation Management) features include transportation planning and optimization, carrier selection and management, route optimization, freight cost management, shipment tracking, and visibility, collaboration with suppliers and carriers, freight settlement, analytics and reporting, and integration with other SAP modules and external systems for end-to-end transportation management.

Conclusion

SAP TM gives companies in many different industries the need to improve their supply chain efficiency, improve customer service, lower transportation costs, and use advanced analytics to learn important things. With its centralized platform and a complete set of features, SAP TM streamlines and improves transportation activities, making sure that teamwork and visibility are smooth throughout the entire transportation lifecycle. SAP TM is an excellent choice for companies that want to improve their transportation management and make sure their goods are delivered quickly and well.

Join our SAP TM online training and gain practical experience in this field.