01_TM_08-June-25_SAP TM Overview: From Carriers to GTS Integration"
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Transportation Management: Carriers vs LSPs
Rohan welcomes participants to the first session on Transportation Management, which will last for 3 hours with a 15-minute break. He begins by explaining key terms such as landed cost, shipper, consignee, and carrier. Rohan clarifies the difference between carriers and logistics service providers (LSPs), emphasizing that carriers transport goods from point A to B, while LSPs facilitate the entire logistics process, including warehousing, security, and government clearances. He also explains that companies like DHL and FedEx are primarily LSPs, even if they own some carrier assets.
Understanding HBL, MBL, and Incoterms
Rohan explains the concepts of House Bill of Lading (HBL) and Master Bill of Lading (MBL) using a courier service analogy. He clarifies that HBL is the receipt given to customers by courier companies like DHL, while MBL is the reference used between the courier company and the actual carrier. Rohan also discusses Incoterms, which are international commercial terms defined by the International Chamber of Commerce (ICC) to determine who pays for various services in international trade. He emphasizes that Incoterms are standardized, revised annually, and chosen by businesses based on their agreements.
Logistics Terms and Concepts Overview
Rohan explains various logistics terms and concepts. He describes containers used in ocean transportation, distinguishing between full container load (FCL) and less than container load (LCL). He then compares this to full truckload (FTL) and less than truckload (LTL) for road transportation. Rohan also introduces drayage services for moving containers within ports, unit load devices (ULDs) for air cargo, and different types of party logistics systems (1PL, 2PL, 3PL) using a farmer example to illustrate the increasing complexity of logistics operations.
Understanding 3PL to 5PL Logistics
Rohan explains the role of third-party logistics (3PL) companies in simplifying shipping processes for businesses. He describes how 3PLs act as facilitators between shippers and carriers, handling various aspects of logistics including warehousing and documentation. Rohan then introduces fourth-party logistics (4PL) companies, which are non-executing partners like management consulting firms that provide strategic advice to improve logistics operations. Finally, he touches on fifth-party logistics (5PL) providers that manage end-to-end supply chains, and explains that SAP's Transportation Management system is a market leader among various TMS products available.
SAP Transportation Management Overview
Rohan explains that SAP Transportation Management (TM) is a standalone application that can manage inbound and outbound solutions, domestic and international freights, and provide traceability and visibility of orders. TM can be deployed on-premise or in the cloud, with cloud deployments being more cost-effective and accessible. The module evolved from SAP LE (Logistics Execution) and APO (Advanced Planning and Optimization) to address the needs of all transportation modes. SAP has announced plans to phase out LE by 2030, encouraging users to migrate to TM, which is now integrated with Extended Warehouse Management (EWM) for better compatibility.
TM Order Management Process Overview
Rohan explains the core processes of TM (Transport Management), focusing on order management. He describes how orders are created in the TM system, either manually or automatically through EDI from third-party systems. Rohan emphasizes that order creation is the first step and is essential for proceeding with the other processes, which include planning, execution, and subcontracting.
Transportation Management Process Overview
Rohan explains the transportation management process, focusing on planning, execution, and settlement phases. He describes how a planning team determines the best method to transport goods, such as choosing between road, rail, or air for a shipment of steel from Delhi to Mumbai. The execution phase involves selecting and assigning carriers, which may be outsourced or internal. Rohan then discusses the settlement phase, which includes payments to carriers and from customers. He also mentions the differences in booking processes for road versus air or ocean transport, noting that air and ocean shipments often require advance booking due to limited options.
SAP Event Management Integration Overview
Rohan introduces event management in the context of tracking and tracing orders, using Amazon's order tracking as an example. He explains that SAP offers its own event management solution, SAP EM, which is tightly integrated with Transportation Management (TM). Rohan then discusses carrier integration, highlighting the need for a web-based application called the collaboration portal (also known as LBN or BN4L) to facilitate communication with carriers of varying technological capabilities. He also mentions reporting aspects, including the use of Business Warehouse (BW) and SAP Analytics Cloud (SAC) for data analysis and real-time updates.
SAP GTS and TM Overview
Rohan explains the Global Trade Services (GTS) module, which is essential for international trading and handles customs, compliances, export declarations, duties, taxes, and trade agreements. He also discusses the Geographical Information System (GIS), which provides mapping tools for transportation purposes, with various vendors offering different types of maps. Rohan then introduces the SAP NetWeaver application, a Java-based web portal that allows access to the Transportation Management (TM) system without using transaction codes, making it similar to the newer SAP Fiori interface for TM users.
SAP Transportation Management Overview
Rohan provides an overview of SAP Transportation Management (TM) and its integration with other SAP modules. He explains that TM is part of SAP's supply chain line of business and interacts closely with Extended Warehouse Management (EWM) and Event Management. Rohan discusses settlement processes in TM and how they differ from ECC, emphasizing that TM is a specialized module for transportation. He also addresses questions about different logistics provider scenarios, cloud vs. on-premise deployments, and integration with other SAP modules.