Topic Covered -

1. Transportation Management Basics Explained
2. Clarifying Carrier, Transportation, and Logistics
3. Understanding 3PL vs. Carriers
4. Bill of Lading and Incoterms Overview
5. Container Transportation Concepts Overview
6. Air Freight Transportation Overview
7. Logistics Systems Levels Explained
8. SAP TM Market and Evolution
9. SAP Transportation Management Evolution Overview
10. DHL Logistics Process for Tata Steel
11. SAP Transportation Management Pillars Overview

Transportation Management Basics Explained

Rohan conducted the first session on transportation management, focusing on basic essential terms. He explained the concept of landed cost, which includes all costs incurred to deliver a product to the end user, not just transportation costs. Rohan also discussed the definitions of shipper and consignee, using a real-life example from Amazon to illustrate these terms. He emphasized that the shipper is the entity responsible for shipping the goods, which could be the seller, retailer, or platform like Amazon, while the consignee is the recipient of the goods.

Clarifying Carrier, Transportation, and Logistics

Rohan led a discussion to clarify the definitions of carrier, transportation, and logistics. He explained that a carrier is anyone or anything that moves goods from one place to another, while transportation refers to the specific process of moving goods between points. Logistics, on the other hand, encompasses a broader range of processes including transportation, packaging, labeling, warehousing, security, and clearance, among others. Rohan emphasized that logistics is an umbrella term that includes transportation as one of its components, highlighting the complexity and scope of logistics management in comparison to transportation.

Understanding 3PL vs. Carriers

Rohan explained the difference between 3PL (Third Party Logistics) companies and carriers, clarifying that 3PLs act as intermediaries who aggregate and consolidate shipments before connecting with carriers for transportation. He used the analogy of sending a letter to demonstrate that for small shipments, using a 3PL like DHL or FedEx is more convenient and accessible than dealing directly with carriers, who typically operate from specific locations rather than having widespread offices. Rohan also noted that while carriers like shipping companies own their own transportation assets, 3PLs focus on aggregation and logistics management, with the distinction being particularly relevant for retail customers who benefit from the convenience of working through 3PLs rather than dealing directly with carriers.

Bill of Lading and Incoterms Overview

Rohan explained the concepts of bill of lading (BOL) and house bill of lading (HBL) in the context of shipping and logistics. He clarified that BOL is a legal contract between a shipper and carrier, while HBL is a customer-oriented document issued by logistics service providers like DHL. Rohan also discussed incoterms, which are defined by the International Chamber of Commerce to clarify responsibilities for payment of transportation services between buyer and seller.

Container Transportation Concepts Overview

Rohan explained the concepts of full container load (FCL) and less than container load (LCL) in ocean transportation, emphasizing that volume is the primary factor for container usage rather than weight. He also discussed dry edge, a trucking service for moving containers within port locations, and explained the difference between dry edge and haulage services. Finally, Rohan introduced the concept of Unit Load Devices (ULDs) used in air transportation, highlighting their lightweight design and aircraft-specific dimensions.

Air Freight Transportation Overview

Rohan explained the terms and processes related to air transportation of goods, emphasizing that yearly-based transportation is the standard practice. He discussed the use of pallets for transporting high-value items like cars and the specific documentation involved, such as house airway bills and master airway bills. Rohan concluded the segment by announcing a 15-minute break before moving on to new topics.

Logistics Systems Levels Explained

Rohan explained the different levels of logistics systems, from 1PL to 5PL, detailing how the number of parties involved in transportation and supply chain management increases with each level. He described 1PL as a single entity handling all logistics activities, 2PL as involving a shipper and carrier, 3PL as including a logistics service provider managing multiple shipments, 4PL as a strategic management party overseeing 3PL operations, and 5PL as a scenario where a large company like Reliance might take control of the entire supply chain. Rohan also clarified that transportation management systems (TMS) are primarily used in 2PL and 3PL scenarios, with the TMS team either installed at the shipper's side or at the LSP's location, while 4PL and 5PL operations focus more on management and strategic direction rather than execution.

SAP TM Market and Evolution

Rohan discussed the market landscape of transportation management (TM) solutions, highlighting that while SAP TM holds a significant market share, other ERP companies like Oracle, Manhattan, and Blue Yonder also offer robust TM solutions. He explained that SAP TM is a standalone application, available in both on-premise and cloud deployment models, with cloud deployments being more cost-effective. Rohan also described the evolution of SAP's logistics solutions, from the basic LE module to the integration of LE with APO for optimization, noting that these earlier systems were designed primarily for road-based transportation and lacked advanced planning capabilities.

SAP Transportation Management Evolution Overview

Rohan explained the evolution of SAP Transportation Management (TM) from its initial focus on road transportation to its current capability of handling all four modes: road, rail, ocean, and air. He detailed how TM 9.0 and subsequent versions addressed the need for a unified system to replace multiple transportation software solutions. Rohan also covered SAP's decision to open TM to non-transportation companies and the planned decommissioning of the LE module by 2030. He concluded by outlining TM's core processes and its integration with other SAP modules like EWM, emphasizing the system's progression and alignment with S4HANA releases.

DHL Logistics Process for Tata Steel

Rohan explained the process of order creation and management in a transportation management system, focusing on how DHL handles logistics for Tata Steel. He described the steps from order creation through planning, execution, and settlement, including the use of subcontracted carriers and the need for tendering when selecting carriers. Rohan also highlighted the importance of booking for international shipments, particularly when using limited air and ocean carriers compared to the abundance of road carriers.

SAP Transportation Management Pillars Overview

Rohan explained the six basic pillars of SAP Transportation Management (TM), including order management, planning, execution, settlement, cross-processes, and master data. He discussed the importance of cross-processes like event management and collaboration portals for interacting with carriers. Rohan also covered the concept of master data, which includes generic data, transportation networks, resources, and charge management. He emphasized that these master data elements are one-time defined objects and do not need to be created or modified regularly. Rohan concluded by mentioning that SAP JUUL, an AI-based tool, will enhance certain functionalities in TM but will not replace the need for TM consultants, who will still be responsible for system configuration and design.