by Jim Lodwick
SAP TM - Six Considerations for Successful Transportation
SAP Transport Management (SAP TM) is an established and proven freight logistics management environment which leverages data from existing SAP Supply Chain Management (SAP SCM) solutions or legacy solutions and integrates fully into the SAP traditional enterprise solutions (SAP ECC/S4) HANA platforms.
This enables manufacturer shippers, freight forwarders and 3PL providers to consolidate, plan and cost freight requirements across multiple industries with multiple modes of transport to maximise ROI on transportation spend and human resources deployment.
Ongoing and rapid developments in technology can be a double-edged sword for transportation, service and logistics organisations; they enable tasks that were previously inconceivable to be undertaken, but also create unprecedented expectation and demand.
The supply chain is no exception. Digital dependence and real-time information mean that manufacturers, vendors and customers increasingly expect just-in-time shipments with lead times being reduced to hours as opposed to days. As a result, complexity rises and resources are stretched, while the price for non-achievement is high in a marketplace where extensive competition makes it easy to switch supplier.
Adopting a proactive Transportation Management strategy has never been more essential. The approach needs to revolve around a central point for up-to-the-minute, standardised information that facilitates decision-making and removes the need for reactive firefighting.
At Rocket we work with organisations to develop processes that seamlessly reflect the end-user’s ever-changing needs and, in so doing, drive both optimum customer satisfaction and maximum competitive advantage.
A successful Transportation Management strategy will consider the following key points:
1. Measurement – behind the topline figures
Key Performance Indicators (KPIs) let an organisation know how well a strategy is performing, or whether suppliers are hitting their targets. But top level KPIs can hide a multitude of issues. On the surface, transportation spend may appear to be on-plan but, drilling down further into the analysis might reveal that positive and negative movements are netting each other out. For example, a fuel price increase may have a negative impact on the bottom line, but be hidden by a reduction in the volume of goods shipped which reduces the overall cost of transport.
Getting into the detail behind the live frontline figures enables an organisation to understand exactly what is happening – and take any proactive steps required to rectify any issues. Additional levels of control are added with the ability to compare key trends with other industry sectors.
2. Modes of transport
The increasing number of distribution channels increases complexities and amplifies the pressure on an already finite resource; driver shortages are a common occurrence throughout peak periods.
At Rocket our focus is on being innovative with what is available and ensuring that specialist resources are deployed where they deliver maximum benefit. For example, if the shortest possible transit time is not a key objective, considering the less costly options of rail or shipping could be a viable alternative to sending everything by road. Or perhaps an existing vehicle can be re-routed to accommodate new collections and deliveries avoiding the need to draft in new fleet.
3. Collaboration compromises
While shared resources and collaboration are important in today’s environment, time pressures mean they are often adopted on the basis of limited information and may not always be the best option. The result? Hard-won efficiency in other areas is compromised.
In contrast, a transport management system lets scenarios based on the latest live information to be modelled, so that the outcome of potential decisions is known before they are set in stone.
4. Built-in compliance
One of the many ways in which current real-time and live technologies enhance transport management is through reducing the risk of incidents and accidents. This means enterprises can meet compliance and safety standards.
For example, apps monitor and manage a multitude of touchpoints. These include drivers’ levels of fatigue and stress to ensure that they are always alert, and vehicle checks such as fluid levels, engine temperatures and wear on brake discs and pads so that any issues can be pre-empted and preventative action taken.
The resulting reduction in delays has the added benefit of optimised customer service.
5. Simplification of shared revenue streams
The collaborative opportunities already referenced, along with shared revenue streams, are becoming standard business practice. But as multiple service providers cover different legs of the journey and the financial burden is shared among several customers, maintaining control and maximising profitability becomes more difficult.
Real-time visibility of the delivery process as it unfolds is the solution. It lets companies invoice at the point of delivery, minimising cash flow as well as the need for follow-up invoice adjustments if products are damaged, or the wrong items received.
6. Flexible systems facilitate change
We operate in an era where constant change is the norm. Rather than fight this, successful organisations adopt methodologies that allow them to manage the nuances and drive maximum profitability. In this they are helped by flexible systems architecture that provides the ability to accommodate change within the standard platform (in contrast to supply chains of the past where additions to the main system often had to be bolted on, often resulting in poor integration and reduced efficiency).
In summary, transportation is critical to logistics and supply chain effectiveness, and meeting the ever-changing requirements of the marketplace requires a dynamic strategy. The focus is on being predictive and proactive - rather than reactive, as organisations become chameleon-like in their ability to adapt to their current set of circumstances.
To find out more about how Rocket Consulting can help you develop an adaptable approach to strategic transportation management, contact us…
• Today’s fast-paced environment is creating both challenges and opportunities for transportation management
• Organisations need to develop transportation management strategies that focus on being proactive and predictive
• Transportation management systems facilitate customer satisfaction, and therefore business success