This blog post will help readers, customers, and SAP TM users familiarize themselves with the SAP Transportation Management’s Spot procurement functionality.
SAP Transportation Management’s spot procurement is a subset of the Tendering process.
In this blog post I will be shedding light only on one of many ways in which we can carry out spot tender. The process may vary on the business needs and processes.
Note: I have carried out the demonstration with relevant screen shot from an internal system for ease of understanding. There’s no relevance or relation to any external source.
Use Case
Use case is for both the customers in Transportation & Logistics Industry (T&L) as well as shippers from Retail, CPG, manufactures etc. who procure services to move their loads or are in business of providing transportation services.
Assumption:
The customer is a CPG company and implemented SAP S/4HANA 2020 and uses SAP Transportation Management.
They have yearly contracts with the carriers to move certain capacities on a given corridor/ route. Alternatively, they may also reach out to carriers who don’t have a contract. Contract in the SAP TM world should be referred as FRA (Freight Agreement).
Challenge:
During certain festive seasons the demand on a particular corridor may outweigh the capacity already procured during the start of the year. In this situation, it becomes really very important to meet the increasing demand and ship the goods to our esteemed customers within the stipulated time frame.
In an ideal world, in the absence of SAP TM spot tendering, the procurement team may reach out to the carriers through different mediums like offline mode e.g. phone call and/or emails. In the end, business may find a carrier with lots of hassle and by paying more premium. For the leadership as well, this seems to be a non-transparent process where there’s no opportunity to weigh all the carriers at a single glance and view the amount quoted by each carrier. As this may be a post facto process for some of the businesses but may have a very devastating long term effect eating into the bottom line.
Solution:
SAP TM has an out of the box solution to streamline spot tender process which provides step-by-step visibility and more opportunity to drive the tender process. It also has a provision to receive responses from the different carriers through different mediums eg emails, portals, EDI etc. It’s not necessary for the carrier to use SAP TM.
Scenario:
Let’s move directly at the stage where a FRO is created. During carrier assignment either the carrier rejects, capacity is exhausted, or we don’t have a carrier contract for a given corridor.
We start with an assumption that all Tender relevant configs are in place as the focus is not on setting up the system but on functionality walk-through.
Pictorial representation of the demonstrated functionality:

Basic Tender flow ( Representation purpose )

FRO Subcontracting tab

Initiate new tender by clicking NEW

Select any option based on your process setup

Tender profile loaded and can be modified

The above button is greyed out because I took the screenshot after clicking on ‘Publish and save’.

Analyze the Response and Award Status

Awarding Carrier B with no FRA

Warning message post carrier award

Analyze the Adjusted/Quoted amount

Awarding carrier A with a active FRA

Charge calculation successful

Analyze Adjusted/Quoted amount and respective FRA charge types
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