Transportation cost management How can costs be monitored and optimized?
Transport costs can also be seen as the Achilles Heels of Transportation Management! To make them more moderate, transparency across the entire transport network is essential. If the processes are IT-supported, it is easy to gain a reliable overview of conditions and all resources at machine and personnel level and to initiate effective transport cost management. However, a distinction should be made here between the prime cost incurred by one's own fleet and carriers' agreements with external service providers.
These tasks are also taken over by the SAP Supply Chain Execution Platform! With the help of SAP Transportation Management (SAP TM) and SAP Extended Warehouse Management (SAP EWM), this solution seamlessly manages all warehouse and transportation logistics.
Automated transportation cost management
Transportation cost management with SAP TM and SAP EWM takes into account all processes involved in storage and transportation. This also includes special services that are incurred in the course of handling costs, such as value-added services. Surcharges for assembly work and/or necessary post-processing are also taken into account.
The potential of automated transportation cost management is considerable:
- Automated transportation cost calculation (cost price, e.g. own fleet)
- Contract management (mapping of carrier agreements including conditions)
- Transportation cost-based planning
- Comparison of service providers on the basis of real or expected freight costs
- Contingent monitoring and allocation
- Real-time cost display and cost center allocation
- Automated invoice verification and generation of credit notes
The advantages of this can best be illustrated with two simplified, exemplary scenarios, as they can take place at a shipper in the outbound sector:
Transport processing by specialized service providers
This application focuses on the system-supported management and control of freight agreements and externally provided services. Using a corresponding 9-dimensional application in SAP TM, conditions for defined freight and transport routes can be compared and allocated or purchased in a standardized and automated manner. The calculated monetary expenses are then transferred to SAP ERP.
Various distribution keys can be used to allocate these to the corresponding cost centers. An allocation can be made on a customer and product basis down to the level of individual packages. If deviations arise in the course of transport processing, for example due to subsequently notified demurrage charges, the existing data can be adjusted in real time. As a result, users are also automatically supported during invoice control and it is also possible to generate credit notes automatically.
Transport processing using your own vehicle fleet
The most efficient transportation option is to have your own fully loaded truck on the road at all times. In order to achieve this, answers must be found to numerous questions: How can the capacities of your own fleet be analyzed in the best possible way at cost level? What options do I have to adequately allocate monetary expenses to recipients, cost centers and partner companies? And what about additional costs for tolls, customs duties or increased amounts resulting from unplanned extended downtimes - for example during loading and unloading? With the help of SAP TM, this can be practically automated! This is because the system monitors all costs incurred in all sub-processes, provides the necessary breakdown and ensures continuous monitoring in real time.
What functions does SAP TM Transportation Cost Management offer?
Users of IT-supported, SAP-based transport cost management benefit from the advantages of standardized monitoring and active control. As a result, process costs incurred in the course of transportation processing can be significantly reduced.
The most important functionalities stored in SAP TM are
- Management of freight conditions or temporary agreements
- Tariff generation using intelligent algorithms
- Determination and calculation of demurrage charges and possible diesel surcharges
- Specification of freight costs for individual sub-parts of a tour
- Support in selecting service providers and awarding contracts
- Monitoring of allocated contingents
- Real-time monitoring of transportation costs already incurred on a daily basis
- Recording of additional costs of any kind
- Distribution key for the allocation of freight costs to the departments involved
- Creation of a solid database for automated invoice verification and issuing of credit notes
- Consideration and invoicing of additional services, such as value-added services or assembly-related work
- Monitoring of cost efficiency on the part of the transport service providers involved
- Documentation of the delivery quality provided in each case and, if necessary, determination of surcharges for reduced services or invoice deductions
Sales SAP EWM / TM
