What is a transport management system?

Against a backdrop of constantly rising freight costs and globalised supply chains, companies in the industrial and trade sector with their own vehicle fleets, as well as logistics service providers, are now more than ever reliant on high-performance transport management systems. These aim to put users in a position to determine the transportation needs exactly from a quantitative and qualitative perspective, as well as the aim was to develop appropriate strategies with regard to the distribution of resources, running times, capacity, and monitoring. In parallel, cost savings potentials are to be identified and taken advantage of constantly.

Which tasks does a TMS system cover?

A modular and scalable transport management system comprehensively covers the entire transport process - from order capture through to planning, tendering, scheduling, and processing. It includes monitoring, freight cost calculation, and billing. The synchronised interaction of a transport management system (e.g. SAP TM) with warehouse management and material flow control (e.g. SAP EWM/MFS) makes possible effective, automated formation of order-based picking waves and transportation units, therefore providing reliable notification and delivery for shipments.

At the same time, the prerequisites for the direct integration of gate planning (loading/unloading) and yard management, as well as time slot booking are created. Central control of shipping is carried out in the SAP environment using the shipping cockpit in SAP EWM and the loading status in SAP TM. At the same time, the best possible distribution of freight onto trucks, freight trains, ships, and freight aircraft is ensured. Processes can be standardised, costs as well as CO2 emissions that are damaging to the climate and environment can be significantly reduced.   

Transport planning and monitoring

Proper and efficient planning and control of transport and logistics networks depends on a large number of variables. For example, in the run-up to the actual shipments, the time required for the picking, packaging, and delivery of the goods must also be determined. It is also necessary to clarify which resources are available for processing, how the capacities of possible means of transport, such as trucks and trains, can be used as in the best possible way, and, if necessary, combined with each other. In addition it is possible to hand the shipping order over to external logistics companies or CEP service providers. All of this is also always a question of costs.

An integrated transport management system decreases this work. In doing so, the processes for the planning, tendering, execution, tracking, and billing of shipments are supported without any compromises. In addition, the data exchange with customs systems (for example SAP Global Trade Services), as well as a track & trace system (for example, SAP Event Management) are integrated.

An optimal interaction between the system will create clarity relating to question such as:

  • How much weight and volume is transported per contingent?
  • How many load carriers, for example containers, are located within a specific transport relationship?
  • How high are the average transportation costs?
  • How reliably do shipping agents, forwarders and/or recipients work?
  • What is the percentage of dangerous goods transported compared with the total number of shipments?
  • What are the distances between the destinations (warehouses, distribution centres, etc.) and the recipients?
  • How is the time expenditure for the performance of individual transports arranged on average?Wie hoch sind die durchschnittlichen Transportkosten?

What functions does an EMS cover?

Determination of needs
The orders stored in SAP ERP, including all necessary data and documents, are automatically transferred for the purpose of the determination of transportation needs. Analysis, evaluation, and interpretation.

Transport planning and tendering
In the next step, the pending transports are planned and optimised using graphical representations and special drag-and-drop functions, also taking into account various factors such as costs and capacities. On the basis of the planning, freight bookings, and freight orders can ultimately be generated, which in turn are used as a basis for the tender.

Tracking and control
Once the load has been loaded by truck, train, ship, or plane, you can track the stations that it is passing through between loading and unloading via mobile end devices and a web-based user interface. In the course of this, unexpected events are also documented, which may delay the delivery. This can be delays or vehicle damage. In this way, continuous monitoring of the current status in each case is ensured. This process is also supported by document, customs, and compliance management that is also integrated in TMS.

Freight cost invoicing
Freight cost accounting on the basis of agreements filed in TMS is also automated. Here, cost allocation of individual transport costs based on header data single transport costs up to the HU level, as well as distribution to various internal and external cost centres is also possible. The data determined is also finally transferred to the ERP system and is processed further there.