Achieving increased transparency across today’s complex supply chains is a fundamental objective for many organizations. Gaining such visibility has proven to be a very real challenge impacting both operational efficiency and customer service levels. Equally important is the ability to effectively manage transportation costs, which is critical in achieving total efficiency across the entire supply chain.
A tightly integrated approach between internal and external IT systems of the various parties involved in the planning and execution of the supply chain provides a powerful way to meet all of these requirements. SAP TM, SAP HANA, and SAP Fiori solutions combined with SAP best practices can create an optimized operational environment that drives improvements in real-time reporting, warehouse activities, and efficiencies in freight and route management.
Logistics and SCM 2016 speaker Matthias Hollenders answered questions on using the latest release of SAP TM, SAP Fiori tools, and SAP HANA together to drastically improve supply chain visibility, reduce freight costs, and meet customer service objectives, including:
- How to integrate SAP TM to SAP Extended Warehouse Management, SAP ERP, SAP Event Management, etc.?
- What are technical requirements for an SAP TM implementation and which are the deployment options?
- What does a typical roadmap and implementation timeline for SAP TM look like?
- Which SAP TM and SAP Fiori features help to improve overall supply chain transparency?
Meet the panelist:
Matthias Hollenders, Westernacher Consulting Singapore
Matthias Hollenders is a Solution Principal for Supply Chain Execution. He is in charge of leading the business development for Westernacher in Asia Pacific and Japan. Before joining Westernacher, Matthias had been with SAP for almost 6 years. He was involved in major global SAP Transportation Management and SAP Event Management implementations as lead consultant as well as solution architect. Matthias has a strong functional SAP background and deep knowledge of the end-to-end business processes in various industries like e.g. automotive, manufacturing, freight forwarding and retail.
Mr. E. Emery: Welcome to today’s SAPinsider Chat!
Today’s topic is on supply chain transparency and gaining control of Freight Spend with SAP Transportation Management (SAP TM), SAP Extended Warehouse Management (SAP EWM), and SAP Fiori tools. I’m very pleased to have Matthias Hollenders joining us! He’ll be here to answer your technical and tools selection questions.
Matthias Hollenders has presented at a number of SAPinsider SCM & Logistics events. He is a Solution Principal for Supply Chain Execution at Westernacher and is in charge of leading business development in the Asia Pacific and Japan. We’re delighted to be seeing him in Singapore in a few months!
Matthias, thanks for being here today!
Matthias Hollenders (Westernacher): Thank you!
I am very happy to welcome you to this Live Q&A session.
My name is Matthias Hollenders. I am a Principal Supply Chain Management Consultant managing our subsidiary in Singapore. Prior to that, I worked at SAP in Germany as a SAP Transportation Management consultant.
I’m looking forward to answering all of your questions. Apart from that I will also be happy to meet you at the SAP Insider in 2.5 weeks. My speaker slot will be on Wednesday, but I will be there on Monday and Tuesday as well. Feel free to drop me an email at firstname.lastname@example.org or give me a call at +65 9641 4800 so that we can meet in person and discuss your requirements and questions more in detail.
Having said that, let's start the session.
Comment From Amol: What is the roadmap for SAP's Transportation solutions (TM, TPVS, ERP LE-TRA) on S/4?
Matthias Hollenders (Westernacher): Hello Amol,
This is a very good question. For sure, This is something SAP normally has to answer, as TM on S/4 is not released yet. However, as far as I know, the next release after TM9.4 will also include an S/4 TM version. For sure it will be a light TM and will replace LE-TRA. I guess this will happen roughly one year from now. In terms of functionality, it will be a light version of TM and definitely not as powerful as a TM system that you run on a separate instance. Please keep in mind that this is just what I know so far, and only SAP development can give you a 100% definite answer on that.
Comment From SK: Can SAP EWM also help in optimizing and gaining transparency of real-time freight costs?
Matthias Hollenders (Westernacher): Hello SK,
For sure EWM also plays an important role. Last year at the SAPinsider conference, I gave a detailed overview of how SAP TM and EWM work together with the tight integration SAP provides. EWM usually focuses on all costs related to the warehouse. This also includes loading of the truck and similar factors. This can be modelled in the EWM system and transferred to TM for generating the charges. However, purely transport-related costs are typically generated in the TM system. Nevertheless, it is also possible to model those transport costs in EWM. I am happy to meet you at the SAPinsider conference to discuss further how this can be achieved.
Comment From Amit R: How do you hanlde freight cost that is unknown while procuring or delivering a product?
Matthias Hollenders (Westernacher): Hello Amit,
If there is no contract in place and you need some ad-hoc rates, you can use TM for spot tendering. With that you can ask the carriers for rates and then select the best one.
If you are now facing additional costs during the transport, those can be added in a collaborative way with the collaboration portal. With the help of that portal, carriers can be allowed to add certain charges and you are able to disagree and communicate this back. This means you can correct those charges together with the carrier before sending any costs to the financial system (SAP ERP).
Comment From Peter: What has been developed for handling bulk freight carriers, particularly around the areas of tendering carriers, managing bunkers, and managing demurrage?
Matthias Hollenders (Westernacher): Hello Peter,
Bulk shipping and handling bulk freight carriers has not been the strength of SAP TM in the past. Still, there are customers that are using TM to handle bulk shipments. It depends on the requirements. Another option is to use the ERP bulk shipping solution integrated to SAP TM. With that you have many more features covered.
I would be interested to meet you at the SAPinsider and conference to understand how your tendering process works and how you manage bunkers in more detail. Demurrage is something we can definitely model together with the tracking and tracing solution in SAP EM.
Comment From JD: How does integrating HANA and SAP EM meet reporting requirements, and how does it provide greater visibility to monitor and report events along the supply chain?
Matthias Hollenders (Westernacher): Hello JD,
EM-based milestone/event tracking plus HANA real-time dashboards is the perfect mix to build up a “control tower”.
With EM you will be able to track each and every step in the supply chain (this goes beyond the transportation part) and detect anything that is not running as planned by comparing a planned milestone time with the actual milestone time. It can also be real-time tracking of your trucks, vessels, containers, etc.
In combination with HANA, you have the opportunity to generate the right reporting that helps you to see your current status of what is happening on a high level. In case certain things go wrong, the reporting capabilities that you have, can indicate this via indicators like color changes. If anything like that is detected, you can drill down into all details and solve the problem.
With HANA you have this real-time reporting that helps you to detect issues like a delay extremely early in the chain. This helps you to react super fast and solve this problem before the customer will notice anything by re-planning the truck, rerouting the truck, sending a new truck, etc. So not only does EM&HANA show you the issues, but you can also trigger actions from that.
In my presentation I will explain this in more detail.
Comment From Antonio: What are the major release drops schedule for next year for SAP TM?
Matthias Hollenders (Westernacher): Hello Antonio,
This is something only SAP development can answer appropriately. I can tell you what I know, but this might change. SAP TM 9.4 will be released very soon, and with that SAP TM can be integrated to S/4.
After this release SAP will work on a TM version that is embedded in S/4. This means I am expecting this to be released (at least for ramp up customers) by end of next year.
Please keep in mind that SAP will not comment on their future product releases, and this is the information I have received via various individual discussion. So it could be that SAP will change their plan, but from what I know, it will come after the 9.4 release.
Comment From John: Our organization seems reluctant to embrace payments via ERS, preferring custom solutions where the payer presents a payment file to vendors for approval prior to payments being paid. Does TM have any new functionality in this regard, or do you have any suggestions for pushing freight vendors to accept payment via standard ERS functionality?
Matthias Hollenders (Westernacher): Hello John,
This requirement can be easily handled via SAP TM’s collaboration portal. The payer can inform the vendor via this portal about the costs that will be paid. Those costs can be then approved by the vendor in the collaboration portal. The vendor also has the option to create a dispute case in case there is any disagreement. Once approved, those costs will be transferred to ERP, and the standard ERS run can start.
Comment From Antonio: Hi Matthias. We are starting a new project (Feb next year) where we want to implement S/4 16/10, Ariba, Fieldglass, EWM, IBP, BPC, SuccessFactors, etc. Each solution has its own collaboration tools (both for internal company and external company collaborations), but we only want one process. For example, we will be using Ariba for all of our sourcing activities. How does this interface (if at all) to SAP TM, particularly for contract authoring, etc? I understand that "freight" has some specific requirements when it comes to contract creation and freight rates, etc., but should at least the sourcing cycle be aligned with S/4 and Ariba?
Matthias Hollenders (Westernacher): Hello Antonio,
Unfortunately, there is no standard integration to SAP TM. Still, this can be handled by using the PI as the middleware using the same web service for all contract-related messages that can be exchanged. Using PI you can have this alignment of the sourcing. However the actual contract creation, freight rates, tariff sheets, etc. should be ideally created in the SAP TM system.
I’d be happy to meet you at the SAPinsider conference to have a closer look into that and show you how this could be done on the system.
Comment From Aloy: With SAP Ariba Contract Management being the latest tool for contract management, what is the best way to manage freight contracts?
Matthias Hollenders (Westernacher): Hello Aloy,
As in my previous answer to another participant, there is no out-of-the-box integration of Ariba Contract Management and SAP TM in place. However, there are web services available that can be used. Still, I would recommend handling the freight cost contract management in SAP TM.
Comment From Antonio: We know EWM is now embedded in S/4. When is this planned for SAP TM (we understand that this will be in the near future)?
Matthias Hollenders (Westernacher): Hello Antonio.Yyes, this will most likely happen in the release after TM 9.4.
Comment From Rajam: Do you have any updates regarding the availability of Fiori tools?
Matthias Hollenders (Westernacher): Hello Rajam,
Fiori in general can be used to model the entire TM UI. This is what we have done already for our customers. Apart from that, you also have ODATA services that you can use to develop your own Fiori apps for your mobile devices. This is something I will show in my presentation. One example is an app for a truck driver delivering products to the customer and tracking the entire journey up to the POD/signature of the customer.
So Fiori can be heavily used for TM and EM. As mentioned, this is something we have done many times, and I can show you some examples at the SAPinsider conference.
Comment From JD: What functionalities in SAP TM can be used to optimize the planning and execution of truck transportation for distribution centers?
Matthias Hollenders (Westernacher): Hello JD,
This is a question where I can easily spend 2 hours on explaining all the functionalities.
First of all, TM can be deployed as a completely separate instance, and you can integrate your orders/deliveries from multiple ERP systems or also external systems. With this you have a global order management database and can leverage synergies between different regions, like, for instance, combining inbound and outbound transports.
Once you have your global transportation demand in the system, you can use an optimizer to:
1. Optimize the route and vehicle to consolidate as much as possible
2. Optimize the carrier selection
3. Optimize the load (3D load planning)
So you have a powerful engine and tools that can support you to optimize the transport. I have already seen huge and very complex transportation networks, and I am pretty confident that SAP TM can handle all of them. All transportation modes can be handled (sea, air, rail, road) and many rules can be defined. All these rules will be also monitored during the execution.
I’d be happy to spend some time with you and explain that in more detail. As I mentioned, I could easily talk several hours about how SAP TM could help you here.
Comment From Rayan Noor: We are currently using IS-OIL Transport and Distribution. We are interested in moving to SAP TM. We would like to know if SAP TM contains the functionality that we are used to in IS-OIL TD.
Matthias Hollenders (Westernacher): Hello Rayan Noor,
There are customers that have integrated their IS-OIL solution to SAP TM. I am keen to know what exactly you need to answer this question. For sure SAP TM does not contain the same functionality. In general, TM is much more advanced and can handle most of the transportation requirements that you are facing in the oil-related business. I’d be happy to discuss the details with you so that I am able to give you a more precise answer.
Matthias Hollenders (Westernacher): Hello everyone,
Having just one hour, I cannot answer all question in as much detail as I would like to. Please drop me an email at email@example.com in case there are any topics I could not answer. I am very happy to answer those in more detail. Apart from that, I would be happy to meet you at the SAPinsider conference. Again, drop me an email and we can arrange a meeting at the fair or meet during and after my presentation on Wednesday.
Mr. E. Emery: As we come to the end of today’s Q&A, I’d like to thank you all for joining us. We invite you to see past podcasts and Q&As on our SCM & Logistics channel. I hope to see you at our upcoming SCM & Logistics 2016 conference this October in Singapore! Click here for more information on the conference and how to register.
A big thank you to Matthias Hollenders of Westernacher for joining us today!