Digital Supply Chain Green Thursday – SAP Transportation Management
Thank you very much for joining us in this article of the Digital Supply Chain Green Thursday blog series. Every Thursday we will together take a closer look at one of the SAP Digital Supply Chain solutions and how they contribute to sustainability in supply chains all over the world. Have fun in following the blog, we invite you to get in touch with us and feel free to share the blog posts among your peers. Here you can find last week’s article aboutprotecting People and Planet with SAP Environment, Health and Safety Management.
Transportation of goods keeps the world running
During the times of COVID we learn to value things, that seemed just self-evident to us before. Meeting friends, going to a restaurant or just going to the office if we want to – and having things delivered to our house! The possibility of online-shops and transportation of goods saved many businesses when shops had to be closed and allowed customers to get what they want and/or need even in times when asked to stay at home. This lead to an increase in business-to-consumer deliveries similar to Christmas time, according to UPS. On the other hand, businesses had to deal with broken supply chains and finally stop to produce as materials, which are globally sourced, weren’t delivered anymore. This existential role of transportation in our modern world.
The amount of transports grows - and so does the environmental impact
In times of global sourcing and global markets, goods get shipped, driven or flown around the whole globe. Unfortunately, every transport causes emissions. The innovations of better vehicles and logistics concepts can slow down the increase of emissions caused by transport but still transportation is responsible for one third of all Greenhouse Gases in the United States and Europe. SAP does not produce vehicles so the question is – How can SAP support transportation to become more sustainable?
SAP Transportation Management takes an End-to-End view
The first step to an overall process improvement is to take an End-to-End perspective. The different functions within SAP Transportation Management cover all parts from strategic and periodically negotiated contracts, managing demand for transportation based on data like sales or purchase orders from an ERP system, planning and executing transports and integrated freight costing, settlement, all rounded-off with continuous analytics and reporting. Also, it is important to cover all possible modes of transportation as well to open all options for the best decision-making. The ability of SAP Transportation Management to handle inbound and outbound freight as well as domestic and international transport makes the solution applicable for both shippers and freight-forwarding companies as an integrated solution for the entire freight capacity management.
SAP Transportation Management covers the whole transportation process End-to-End; Source: SAP
Sustainable solutions in transportation are good business-sense
Every transport is generating costs caused by the transportation of the good in vehicles itself and also with employee engagement for processing the orders and planning. In times where customers do not only expect same-day delivery but also cost-free delivery, the transportation processes need to be cost-efficient, fast and adaptable to specific customer requirements. Therefore, reliable planning enabling the choice of cheaper carriers like rail or hybrid concepts, as well as utilizing those capacities in the best ways possible come into focus – and go hand-in-hand with the goal of a more sustainable transportation management.
For a more reliable planning, the Transportation Management function joins all freight demand & resources together. Time and Cost are the most important criteria in traditional transportation management, when it comes to choose the right carrier for a product. The connection to data from order-management systems or predictive models from the Intelligent Enterprise increase the reliability of demand planning. SAP Transportation Management allow businesses to centralize or decentralize planning to the level it is best for them. Real-time information on e.g. locations, transport constraints or availability of vehicles are taken into dynamic planning functions in map-based or automated planning. Like this the most effective cheapest and environmentally friendliest solution to fulfill the customer requirements can be leveraged.
Always find the best solution for each shipment with sophisticated transportation planning;
For enhancing the resource-utilization, the planning does actually not stop at truck-level but reaches to package-level. Based on product limits like stacking rules or customer requirements, the best utilization of space is planned on the pallet level to minimize the number of needed pallets and the planning of how to place which pallets into which truck also minimizes the number of trucks needed. For the route planning, the capacities are visible in real-time also allowing to minimize the number of empty rides by utilizing multi-stop or round-trip scenarios. This minimizes the CO2-footprint and ensures a sustainable utilization of existing resources.
Capacity optimization down to pallet-level with enhanced load-planning; Source: SAP
The integration into SAP S/4HANA for product compliance ensures that trade regulations are respected, and dangerous goods are labeled, stored and handled safely. This protects not only the environment from negative impact but keeps the employees safe as well.
Having planned and ensured that the planned transports are cost-efficient for to ensure profit, resource-efficient for protect the planet and handle dangerous goods compliantly to keep people safe, you’re good to go! In the Transportation Execution function, visibility is ensured from loading begin to proof-of delivery, with flexible event notifications and even map-based event location visibility. Thanks to the S/4 HANA integration, the posting and creation of follow-up documents or invoice verification can be done efficiently in one system. Finally, analytics and reporting capabilities of SAP Transportation Management give decision-makers meaningful insights on the performance of the transportation businesses – and the basis for further improvements!
From a cross-system world to "one SAP S/4HANA" world; Source: SAP
Supporting Sustainability in Transportation in a holistic way
SAP Transportation Management supports businesses in streamlining and automating their processes regarding transportation from end-to-end. Through increased visibility and enhanced planning capabilities businesses are able to cut costs by utilizing resources better and avoid fire-fighting measures that are economically and environmentally unfavorable. Ensuring compliance throughout the whole process is important as well to keep planet and people safe and to avoid expensive fines.
Make sure your business drives in a green way – with SAP Transportation Management
I hope you found this blog post helpful and interesting. Please make sure you follow me to not miss any future blog posts in this series and stay informed about how a Sustainable Supply Chain is supported by SAP Digital Supply Chain solutions! Please have a look at my earlier posts as well: