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SAP Transportation Management

with TM 8.0

Eric Osterroth
Product Unit Transportation & Logistics
On-Premise Suite

September 29, 2010


Agenda

1. Business Context
2. Transportation Overview with TM
3. Roadmap

© 2010 SAP AG. All rights reserved. / Page 2


Transportation and Logistics
An Area of Increasing Business Focus & Investment

Transportation and logistics ― challenging market dynamics…

 Transportation is responsible for 15% of global CO2 emissions


 20- 25% surplus inventory exists across all material groups
 Only 50% of trucks in the EU have a full load
 400-500 suppliers are required to produce a computer
 3000-5000 suppliers are needed to produce a car
 80 Million people each year reach a living standard like in Germany
 9 billion people will be living on earth by 2050
 An ever increasing demand for individual products and service

Source: brand eins, March 2010

…. requiring a new dimension of business and IT solutions

© 2010 SAP AG. All rights reserved. / Page 3


Transportation Management
… the most important topic in Mill Products

Transportation Managment
Is the highest rates topic
in ASUG Mill SIG evaluation

Why?

Total costs of transportation


8 – 10% of COGS
in many Mill companies

© 2010 SAP AG. All rights reserved. / Page 4


Pain Points from SAP Customer point of view
Our Customers are YOUR Customers
Billing
Warehouse
Mgmt.
Finance Pain:
Pain: Capacity
Coordination of multiple
systems
Customer Pain:
Relations Low On Time
Mgmt. delivery
Human
Pain: Resources
Business-Wide
Visibility

Data Warehouse/
Analytics Transportation
Mgmt.
Pain:
M&A activity CUSTOMERS

Pain: High
Transport Costs

IT Landscape
Homegrown and B.O.B. with Interfaces

© 2010 SAP AG. All rights reserved. / Page 5


Agenda

1. Business Context
2. Transportation Overview with TM
3. Roadmap

© 2010 SAP AG. All rights reserved. / Page 6


Legal Disclaimer

The information in this presentation is confidential and proprietary to SAP and may not be disclosed without
the permission of SAP. This presentation is not subject to your license agreement or any other service or
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and/or platforms directions and functionality are all subject to change and may be changed by SAP at any
time for any reason without notice. The information on this document is not a commitment, promise or legal
obligation to deliver any material, code or functionality. This document is provided without a warranty of any
kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness
for a particular purpose, or non-infringement. This document is for informational purposes and may not be
incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, and
shall have no liability for damages of any kind including without limitation direct, special, indirect, or
consequential damages that may result from the use of this document. This limitation shall not apply in
cases of intent or gross negligence.

All forward-looking statements are subject to various risks and uncertainties that could cause actual results
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© 2010 SAP AG. All rights reserved. / Page 7


Transportation Management
Objectives, Issues, Capabilities and Benefits

Objective:
Manage transportation network to meet customer expectations while decreasing
transportation spend and maximizing asset utilization.

Best practice solution:


Manage customer deliveries without violating customer constraints while maximizing
assets by practices like tendering, backhauls and consolidation.

Issues Key business capabilities Benefits

 Poor asset utilization  Backhauls and continuous moves;  Increased carrier/asset utilization
multi-modal, multi-leg shipment
 Unforeseen exceptions in shipment  Improved customer service through
optimization
process better visibility & on time delivery
 Active tracking of shipment cycle
 Inability to optimize inbound and  Optimized transportation planning
outbound transportation  Transportation management and across suppliers and carriers
optimization (route determination) (best transportation option)
 Missing visibility on cost-efficient
and fair balanced carrier selection  Tendering and most recent freight  Well-balanced and cost-efficient
rates with standard interfaces and contracting of transportation
 Increasingly complex trade and
carrier contract compliance capacities
product regulations
 Creation, change, and printing of
 Accelerated cross-border
export documentation (including
transactions with compliant export
shipper‟s export declaration)
documentation

© 2010 SAP AG. All rights reserved. / Page 8


SAP Transportation Solution History
Strong, Continued Investment to Deliver THE Market-Leading Solution

SAP Transportation Mgmt. combines a long history of


transportation business, process and IT expertise

ERP - Logistics Exec. APO – Transport. Transportation Transportation


Transportation Planning/ Vehicle Management Management
(LE-TRA) Scheduling (TP/VS) (TM 6.0 & 7.0) (TM 8.0)
 Coverage:  Coverage:  Coverage:  Coverage: THE
Shipment execution Shipping planning & Integrated transportation Comprehensive market-

optimization planning & execution transportation mgmt.
Limitations:
Order-based planning
leading
No shipments combining Stand-alone solution For core operations
in/outbound movements Integrated with Inbound & outbound transp. For shipper industries & solution
ERP LE-TRA foundation for freight
Delivery-based only Central transportation charge
forwarders
No transportation capacity  Limitations: engine
 Focus:
planning No combined in-/outbound  Limitations: Usability & configurability
movements …. TCO Performance & process
Restricted availability simplification
Customer & SAP TCO

© 2010 SAP AG. All rights reserved. / Page 9


Transportation & Logistics Management
SAP Focus Areas 2010 & 2011

Shipper /
Retailer
Goods Goods Goods Customer Inbound
Order Delivery Movement Billing

Shipper / Freight
Order Transport. Transport.
Supplier Costing &
Mgmt Planning Execution
Outbound Billing
Freight
Forwarder

Ocean
Voyage Truck
Operation Operation

Rail
Operation

Carrier / Aircraft
Transportation
Operation
Provider

Commodity
Trader /
Trading Marketmaker

© 2010 SAP AG. All rights reserved. / Page 10


SAP Transportation Management – Major
Objectives
Inbound & Outbound Logistics,
Freight Forwarding

Integrated and Stand-Alone


TM Operations
Decentral and
Subsidiary/Intercompany
Utilization

Master Data
Independent

Service-Oriented and
Future-Proof Architecture

Real-World Awareness
© 2010 SAP AG. All rights reserved. / Page 11
SAP Transportation Management 8.0
Supply chain convergence
SAP integrated fulfillment is based on SAP TM 8.0
 dynamic information exchange for inbound & outbound
logistics
 Order based SO, PO, STO
 Logistics focus in operations vs. product demands
 Customs Import & Export
 EHS Compliance
 Visibility
 Business Analytics
 Scalability
 Usability Transportation
SAP TM

SAP ERP
Track & Trace
Financials, Billing,
SAP EM
Procurement

Delivery Processing, Customs


Warehouse
Management SAP GTS

© 2010 SAP AG. All rights reserved. / Page 12


User Experience: SAP Business Client
simplify user interaction, automate key processes

 Create / adapt your personal worklist and define what you want to see
 Flexible, adaptable application screen content and layout
 High usability and productivity

© 2010 SAP AG. All rights reserved. / Page 13


Transportation Management – Process
Overview
Managing
Transportation
Requirements
Managing
Settling
Forwarding
Forwarding Order
Orders

Settling Freight Managing Freight


Order & Bookings

Executing and Planning Freight


Monitoring & Selecting
Freight Carriers

Tendering Freight

© 2010 SAP AG. All rights reserved. / Page 14


Managing Transportation Requirements
Managing Forwarding Requirements
Managing
Transportation
Requirements
Managing Transportation Requirements: Settling Managing
Forwarding Forwarding
Order Orders
 Planning based on ERP Requirements
(Sales Orders, STOs, POs)
 Integration of Planning results from TM to ERP –
Managing
Settling Freight
Deliveries & Shipments Order
Freight &
Bookings

 Integration of Financial data from TM to ERP –


Customer Billing & Vendor Invoicing
 Capability to integrate multiple backend ERP systems to TM Executing and
Monitoring
Planning Freight
& Selecting
Freight Carriers

Tendering
Managing Freight
Transportation
Requirements

Settling
Forwarding
Managing
Forwarding
Managing Forwarding Requirements:
Order Orders
 Capability to directly create Transportation Requirements
in TM (w/o being triggered by a backend system)
Managing
 Forwarding Order creation independent of Product
Settling Freight
Order
Freight &
Bookings Master
 Support for multiple mode based UI (Land, Ocean, Air)
 Ability to trigger Transportation Proposal, perform Charge
Executing and
Monitoring
Planning Freight
& Selecting Calculation during order entry.
Freight Carriers

Tendering
 Rules based ability to split and consolidate orders into
Freight
Transportable units which are further planned and
subcontracted.
© 2010 SAP AG. All rights reserved. / Page 15
ERP Process Integration
Procurement, Sales Order Processing, Replenishment

 Responsive and direct


 Immediate Processing
 Order Scheduling with TM
 Allows continued change management on ERP
orders with consistent synchronous processing in
TM
 Allows to drive delivery creation by logistics
 Partial deliveries and splits represented as
consumption in TM

 Hybrid Implementations
 ERP Order Management
 ERP Delivery processing
■ Either deliveries created in ERP or driven by TM
■ Also for multi-ERP, multi-client environments

TM Req.  Transportation…
Order
… ■ TM complete, no ERP LES TRA required
■ TM planning only, execution in LES TRA

Del TM Req.
TM Req.
…  Complete
Del Del’  Create, Change, Delete
 Returns

…  Inbound and Outbound Mix in Loads
Ship
© 2010 SAP AG. All rights reserved. / Page 16
Managing Freight & Bookings
Planning Freight & Selecting Carriers
Managing
Transportation
Managing Freight & Bookings: Requirements
Settling Managing
 Central document for further processing like Printing, Charge Forwarding Forwarding
Order Orders
calculation, Capturing of shipping relevant data, stage
sequence and stops, doc. changes, ...
 Collaborative Transportation Planning with external carriers
Managing
Settling Freight
 Ability to manage & send Booking Requests to External TSPs Order
Freight &
Bookings
(e.g. Ocean Carriers)
 Release shipping instructions to TSP via Print / Electronic
media Executing and Planning Freight
Monitoring & Selecting
Freight Carriers

Tendering
Managing Freight
Transportation
Requirements

Settling Managing
Forwarding
Order
Forwarding
Orders
Planning Freight & Selecting Carriers:
 Support for Manual & Optimizer based planning with
capability to include Driver Operating hours, time
windows, Load cost, internal costs etc as constraints
Managing
Settling Freight
Order
Freight &
Bookings
 Ability to adapt planning after Shipment execution start
 Advanced planning with compartments and truck &
trailers.
Executing and Planning Freight
 Extensible platform to develop customer specific
Monitoring
Freight
& Selecting
Carriers planning strategies
Tendering  Combine Inbound & Outbound Shipments during Round
Freight
Trip Planning
© 2010 SAP AG. All rights reserved. / Page 17
Planning
Different scenarios – Domestic & International
 Truck Load Planning
 Typical scenario national, single mode
 “US domestic, outbound”
 Carrier delivery
 Secondary distribution
 Truck & trailer, compartments

 International Shipping
 Booking of capacities on ocean vessels
 International Import & Export
 Multi-modal transportation
 Related to Railcar processes

 Focus on task
 Configurable planning cockpit
 Drag and drop and mouse less
 Inherit logic and scenarios
– Schedules, Booking
– Truckloads, Freight Orders
 CAN consider constraints…
© 2010 SAP AG. All rights reserved. / Page 18
Tendering Freight
Executing & Monitoring Freight
Managing
Tendering Freight Transportation
Requirements
 Collaborative Tendering with carriers via the ITS server Settling Managing
Forwarding Forwarding
(web based tendering) Order Orders

 Exception based Management via the alerts monitor


 Possibility to perform Peer-to-Peer, Broadcast & Direct Tendering
 Acceptance of Quote with or without response to RFQ Settling Freight
Managing
Freight &
 Authorization based ability to change data during response to Order
Bookings

RFQ.
 E-mail tendering and SMS communication capability with Carriers.
 Supports free text and attachment capability to RFQ Executing and Planning Freight
Monitoring & Selecting
 Flexible Tendering Control via the Change Controller Freight Carriers

Tendering
Freight

Managing
Transportation
Requirements Executing & Monitoring Freight
Settling Managing
Forwarding Forwarding
Order Orders
 Transportation Visibility and Monitoring via SCEM.
 Supply Chain Visibility to the Organization, Carriers,
Suppliers and Customers via the conventional web
Settling Freight
Managing
Freight &
browser
Order
Bookings
 Automatic Document status updates in TM in response
to recept of EM message updates.
 Connectivity to GTS and Customs Handling
Executing and
Monitoring
Planning Freight
& Selecting
 Dangerous Goods Handling
Freight Carriers

Tendering
Freight

© 2010 SAP AG. All rights reserved. / Page 19


Connectivity, Visibility & Collaboration
managing & monitoring your business partners

 Connectivity Partners  Visibility  Collaboration


 SMC3 for Czarlite  Standard SAP Event  Every SAP TM screen is
 GT Nexus for Ocean Management content fully web-enabled
shipping  Hundreds of SAP customers  Standard Portal content for
 Crossgate for all purpose run SAP EM, primarily for web-based tendering and
modes logistics tracking visibility scenarios
 Rate Management
 Other use cases can be part
of customer projects
(Freight Invoicing)

© 2010 SAP AG. All rights reserved. / Page 20


Settling Freight Orders & Forwarding Orders

Managing
Settling Freight Orders & Settling Forwarding Transportation
Requirements

Orders: Settling
Forwarding
Managing
Forwarding
Order Orders

 Out-of-the-Box Integration to Vendor Invoicing &


Customer Billing
Managing
Settling Freight
Freight &
 Group and Split rules based invoice & billing request Order
Bookings

creation
 Invoicing & Billing based on either planned, confirmed or Executing and Planning Freight
Monitoring & Selecting
executed data Freight Carriers

Tendering
Freight
 ERP Invoicing & Billing Document flow updates in TM
documents
 Partial invoicing & billing capability

© 2010 SAP AG. All rights reserved. / Page 21


Charge Management
Comprehensive freight cost management

 Best-in-class functionality
 Embedded in planning, scheduling
 Freight agreements and rating
 Tariff, Line haul rates, accessorials, fuel
surcharges, by mode etc.
 Manual changes and Carrier overwrite if
allowed
 Costing on Tariffs and Carrier costs
 Payment and Invoicing possible
 Integration
 Settlement across company codes with
ECC, ERS and Invoice verification
 Out-of-the-box LTL rating connected with
SMC³ for Czarlite via Web service
 Use Case
 Instant costing, dynamic rating
 Freight Payment and Settlement
 Carrier Charge Calculation
 Customer Invoicing

© 2010 SAP AG. All rights reserved. / Page 22


Processes can be automated entirely
„Zero Click‟ Scenario

SAP ERP – SAP TM – SAP TM – SAP TM –


Sales Order Management Order Management Subcontracting Tendering

Role: Sales Clerk

Scenario Story Line:


Create Sales 1. Shipper receives an order for a Full-
Order
SAP ERP
Truck-Load (FTL).
2. System selects most desirable carrier
Create Order
Based
Create Start Publish 3. Freight Order is tendered to the pre-
Freight Order Tendering Tendering
Request determined carrier
4. No response from carrier is
Run Freight
Award &
Quotations & considered as „Acceptance‟ to
Complete Overdue Freight
SAP TM Tendering RFQs
service the request.
5. Shipper awards the carrier.
Manual Process Step Automated Process Step

© 2010 SAP AG. All rights reserved. / Page 23


SAP Transportation Management Scenarios
Predefined, Best Practice Transportation Scenarios with SAP TM 8.0

Scenario Overview
■ Integrated, end-to-end transportation scenarios
■ Predefined, best practice processes & configuration

Scenarios Covered
■ Domestic Inbound Transportation
■ International Inbound Logistics
■ Outsourced Transportation
■ Domestic Outbound Freight Management
■ Full Container Load

Scenario Deliverables
■ Scenario Description
■ Scenario Master Data
Transportation network, business partners, resources,
schedules
■ Scenario & Process Component List
■ Configuration Guide

Customer / Partner Benefits


■ Reduced implementation time, effort and cost
■ Efficient, lower cost operations

© 2010 SAP AG. All rights reserved. / Page 24


Outsourced Transportation
Scenario Overview

Outsourced transportation process management - with shipper transportation


planning and 3rd party shipment execution and event monitoring

Shipper Plant
(Chicago,USA)

Carriage
Customer
(Bellevue, USA)

Packing of sold Full truck load transportation via 3rd party carrier to customer location Delivery to
material in Customer
boxes

© 2010 SAP AG. All rights reserved. / Page 25


Outsourced Transportation
Scenario & Process Details

Sales Agent Tendering & Carrier Logistics Service Transportation Transportation


(Shipper) Selection Specialist Provider Carrier Disptacher Charge Clerk
(Shipper) (Shipper) (Shipper)

Freight Planning Transportation


Sales Order Freight Transportation Freight Order
& Carrier Execution &
Processing Tendering Monitoring Settlement
Selection Monitoring
 Sales order  Automatic  Carrier  Document  Document  Transportation
creation & carrier tendering printing printing charge
release (in ERP) selection and Peer-to-peer &  Carrier  Transportation calculation
assignment broadcast transportation milestone Freight order-based
 Order-based Carrier tendering according to freight
transportation event creation
determination (via - With email-based notification (SAP EM) agreements
request lanes and request for Transportation cost
creation (SAP EM) Based on
allocation) quotation (RFQ) distribution based
(in SAP TM) Web-based event transportation order
- Real costs based - SMS carrier on group and split
notification  Event criteria
Order quantity/ carrier selection notification of RFQ
(i.e. POD) monitoring
weight check receipt  Supplier freight
 Outbound - Alert monitoring  Event (SAP EM) invoice request
 Automatic delivery monitoring Cargo in transit
freight order (SFIR) creation
creation in ERP (SAP EM)
creation  Exception  SFIR transfer to
Cargo in transit
For truck load handling ERP
 Exception (SAP EM)
With accrual posting
 Automatic handling Customer for supplier invoice
sales order (SAP EM) notification verification,
update For shipment processing &
Freight order data execution payment
Tendering restart - Evaluated Receipt
via change Settlement of
controller carriers in ERP
© 2010 SAP AG. All rights reserved. / Page 26
Agenda

1. Business Context
2. Transportation Overview with TM
3. Roadmap

© 2010 SAP AG. All rights reserved. / Page 27


SAP Transportation Management Roadmap
We will support convergence and verticalization

For Shippers
Superior Scenario Integration
Planning, Execution, Financials.

Providing the market leading


solution with superior scenario
support for transportation
operations, financials, fulfillment
planning and execution – for
purchasing, distribution and sales
order processing in dynamic and
adaptive networks.

For Logistics Industries


In-Depth support by mode.
Simplicity, Efficiency, Visibility,
and Profitability.

Providing best-in-class solution for


forwarding enterprises. Focused
verticalization in dedicated
logistics industries, converging
intermodal processing with
detailed mode support in rail, in
container shipping and asset
intensive transportation for land
and ocean.

© 2010 SAP AG. All rights reserved. / Page 28


Transportation Mgmt. Development Plans
High Level Roadmap

Shipper /
Retailer
Goods Goods Goods Customer Inbound
Order Delivery Movement Billing
2010 2010
Shipper / Freight
Order Transport. Transport.
Supplier Costing &
Mgmt Planning Execution
Outbound Billing

2010:
Goal: Complete solution for shipping industry
2011 Freight
Forwarder

core transportation mgmt. operations.


Foundation for freight forwarders. Ocean
Truck
2012+
Focus: Consumer Products & Chemicals
Voyage
Operation Operation
2011:
Goal: Best-in-class solution for freight
forwarding industries. Rail 2012:
Solution round-off for shippers. Operation Goal: Supply chain convergence
Focus: Logistics Service Providers (LSP) (integration SAP TM & EWM ).
Automotive, Mill, Mining,... Order-to-cash for rail industries.
Carrier / Aircraft Focus: Shippers – Retails
Transportation Freight Forwarders – LSP
Operation
Provider
2013:
Goal:SME solution offering.
Solution for trucking & private fleets.
Commodity
Trader / Integrated partner solutions for
Trading Marketmaker ocean, rail, aircraft core operations.
Focus: SME & Carriers
© 2010 SAP AG. All rights reserved. / Page 29
SAP Transportation Mgmt. Customer Use Cases
Examples of Customer TM Projects

 Company: Consumer packaging, for beverage, personal care, healthcare, food (UK)
 Implementation: SAP TM 6.0
 Scope: Complete automation of the tendering process (subcontracting)
 Processes: Sales order creation in SAP ERP and transfer to SAP TM for optimized
freight unit building and truck planning, carrier selection (according to rules and
tendering results). Accepted carrier is transferred back to SAP LES (ERP-Logistic
Execution System)

 Company: Chemicals, specializing in silicone-based materials (USA)


 Implementation: SAP TM 7.0 (ca. 50 sites with 300 shipping points to go live)
 Scope: Transportation charge management with extensive charge calculation,
invoice creation and verification
 Processes: ERP shipment is transferred to SAP TM for charge calculation and the
freight settlement document; the carrier portal for charge calculation verification.
Automated invoicing is processed with SAP ERP.

 Company: FSL, operating as a logistics service provider (Italy)


 Implementation: SAP TM 7.0
 Scope: Core processes of an LSP (Logistic Service Provider)
 Processes: Forwarding order creation, freight unit creation, planning & dispatching,
subcontracting, transportation charge management, and invoicing

© 2010 SAP AG. All rights reserved. / Page 30


SAP Transportation Management Influencer Group
Close, Long-term SAP-Customer Development Partnership

SAP Transportation Mgmt. Influencer Group

SAP TM Development Customers


 Customer input on solution  Early insight into SAP TM
priorities and requirements development plans,
 Business expert and end-
specifications, solution
user feedback on UI‟s,  Direct contact with
processes and functionality
SAP development to voice
 Validation of SAP TM TM customer priorities and needs
 Participation in TM
market-readiness
development and business
expert community

Influencer Group Set-up Participation Prerequisites


 Cross-industry group  Involvement of line of business experts + end users
 2-3 customers engaged per topic  Named single point of contact: SAP & customer
 Regular, individual customer workshops  Participation in scheduled workshops
 Signed NDA
© 2010 SAP AG. All rights reserved. / Page 31
Agenda

1. Business Context
2. Transportation Overview with TM
3. Roadmap

© 2010 SAP AG. All rights reserved. / Page 32


Summary

The right product


TM 8.0 supports major business processes for shippers
 Order Integration, Adaptive planning, Tracking
 (Stand alone) planning, optimization and execution
 Manual and automatic processes
 Booking, Tendering
 Integrated Charge Engine (Selling and Buying)
 Supports Dangerous Goods, GTS, Maps
Flexibility
 Logisticalcapabilities can be “pieced” together based on
business processes
 Multiple Deployment Options & Integration Capabilities

Commitment
 TM is clearly the way to go as of now (RU: Dec. 2010)
 Transportation is one of the most important investment areas
 Future releases will close gaps in regards to business
process convergence (like e.g. GATP capabilities)
© 2010 SAP AG. All rights reserved. / Page 33
Contact
Eric Osterroth

Product Management
Transportation & Logistics
On-Premise Suite

T +49 (6227) 7 44858

eric.osterroth@sap.com
www.sap.com
© 2010 SAP AG. All Rights Reserved

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