Transportation planning with SAP TM What is transportation planning?
The primary aim of transport planning is to optimize transport costs against the backdrop of rising energy prices and a shortage of freight space. However, the cost savings generated by systematically designing and managing transportation networks must not be at the expense of strategic corporate factors such as adherence to delivery dates and delivery quality. The central task of transport or route planning is to balance all of these aspects and steer them in the right direction.
Successful planning and control requires knowledge of the available freight requirements and capacities as well as knowledge of freight agreements and prices. It is then possible to allocate orders to resources in the best possible way and create an adequate sequence for speedy delivery (inbound and outbound). Cost-intensive empty runs and idle times are reduced and freight space utilization is improved across all stages of transport (e.g. also in a multimodal environment for pre-, main and on-carriage).
Different networks work together. A supply network, for example, connects suppliers with a customer's plant or plants. In a distribution network, goods are distributed from the manufacturer's production facility to the connected trading companies. There are also forwarding networks, which are operated by logistics service providers (LSPs) and connect several shipping and receiving locations in parallel. In the digital supply chain, these networks merge and can be planned and measured in an optimized manner. This enables you to better secure the increasingly scarce freight space.
Core processes of transportation planning
Optimization of transport costs
Tour
planning
Capacity
administration
Service provider
selection
What tasks does transportation planning involve?
Systematic transportation and route planning offers enormous potential for carrying out a large number of processes as quickly and cost-effectively as possible with the help of suitable strategies and resources. In the course of this, the number of means of transport used, the transport duration and, in the best case, the length of the route to be covered should be minimized.
The central tasks and functional areas of transportation planning are
- Determination of a transportation network and definition of transportation routes
- Recording transport requirements and consolidating e.g. inbound and outbound shipments, returns and plant traffic
- Pre-planning of the package structure
- Capacity and cost planning of transports
- Selection of means of transportation and other resources
- Allocation of transport orders to the company's own fleet or to external vehicles from a logistics service provider
- Planning transport routes, taking shipment sizes into account
- Assigning which customers are to be served in which order
- Calculation of transportation costs
- Simulation of various transport scenarios
- Reaction to influences such as the traffic situation, weather conditions, etc.
- Selection and commissioning of service providers
The overriding objective is to reduce costs for transportation and handling while maintaining the specified performance - always within the delivery time. If influenced by the transportation planning, expenses for stocks that the owner of the goods to be transported must also be taken into account.
Optimum interaction between the systems provides clarity on questions such as
- How much weight and volume is transported per individual shipment, or assured total quota?
- How many load carriers, for example containers, have been shipped within a specific transport relationship?
- What are the average transportation costs?
- How reliable are the shippers, forwarders and/or consignees?
- How high is the percentage of dangerous goods transports compared to the total number of transports?
- What are the distances between the destinations (warehouses, distribution centers, etc.) and recipients?
- What is the average time required to carry out the individual transports?
Transportation strategies
What is a TMS or a TPS?
TMS (transport management system) and TPS (transport planning system) are generally used synonymously and are aimed at shippers, logistics service providers and freight forwarders who want to improve their transport planning and execution with the help of automation.
A transport management system or transport planning system (e.g. SAP TM) is a business software that manages transport requirements and supports users in organizing transport networks and handling goods movements efficiently and in a service-oriented manner. A TMS or TPS is responsible for the entire management, controlling and continuous optimization of capacities, resources and routing.
Modern TMS/TPS, which are usually used in complex transportation networks, are scalable and therefore future-proof. They also have track & trace and reliable event management functions, enabling optimized, synchronized transport and logistics performance.
Transport management systems (TMS) are used to plan, control, monitor and optimize single and multistage as well as multimodal transports. TMS create transparency about the actual flow of information and goods, enable reactions in real time and can generally be used globally.
Transport planning systems (TPS) are usually synonymous with transport management systems (TMS), sometimes with an even stronger focus on route planning functions.
As part of the SAP SCE or S/4 platform, SAP Transportation Management (SAP TM) maps transportation logistics across all locations and offers comprehensive functions for automating and optimizing transportation processes. It supports planning and tendering as well as execution, tracking and freight cost accounting, allowing customers to benefit from a significantly greater range of functions and ERP integration than with non-SAP TMS systems.
The SAP LE-TRA (Logistics Execution - Transport) module (discontinued by SAP) is used to plan shipments, modes of transport and shipping types and also maps transportation management processes in SAP ERP. SAP TM (SAP Transportation Management) is a more powerful alternative and successor to SAP S/4.
The abbreviation GIS stands for "geographic information system". These applications can be used to digitally record, analyze and process spatial data. Numerical and graphical presentations are also possible.
With regard to SAP TM, data from such systems (e.g. Google Maps, PTV, Here Maps...) is used for planning and execution based on real geocoded information (road routing, bridges, underpasses, toll roads, loading and unloading locations) and real-time data (traffic, closures...) for optimized planning and execution.
What tasks does a transportation management system include?
Transportation costs
management
Transportation
planning
Promoting interaction
of logistics and transportation processes
Seamless processing
of the transport chain
What types of transportation management systems are there?
In practice, both stand-alone and ERP-integrated transport management systems can be found. Stand-alone TMS are "isolated solutions", i.e. self-contained systems that can usually only communicate with other company-relevant applications via complex interfaces and usually do not have an open basis (black box, no open source). These systems are generally not considered standard software.
The particular advantage of integrated systems and standard software, such as SAP TM, on the other hand, is that they are part of the ERP environment and the complete SAP suite. As a result, all information required for planning, controlling, monitoring and optimizing transport processes within a supply network is available transparently and standardized in one application. This also includes data from ordering, production, accounting, purchasing, warehousing and inventory management.
The advantages of SAP integrated functions and business processes for transportation management ensure greater transparency of processes, precise planning of transportation processes and efficient processes for distribution and warehousing - they form the heart of logistics.
Users of an integrated transport management system can act much more flexibly and are also able to react to unplanned changes in general conditions. At the same time, considerable potential savings can be made at transport level.
SAP Global Trade Service (SAP GTS) for customs clearance, SAP Event Management (SAP EM), SAP Global Track & Trace (GTT) and SAP Business Network for Logistics (SAP BN4L) are also integrated. SAP TM also offers manual planning functions that can be used, for example, to change routes or adjust load distributions using a 3D model.
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