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What is SAP Transportation Management (SAP TM)?

Mike Puterbaugh - July 19, 2022

A transport management system is a software system that helps companies manage transport logistics. It can be used to manage physical transport via land, air, sea, or any combination of transport modes. The SAP Transportation Management System (known as SAP TM or TMS) is part of a large supply chain management system that can:

  • Automate time-consuming tasks
  • Optimizes freight and delivery routes
  • Tracks shipments on regional and global routes
  • Automatically generate compliance documents and freight invoices

SAP TM provides an out-of-the-box solution for both order-to-cash and procure-to-pay scenarios. It can be integrated with SAP ERP billing and invoicing to enable fast, automated management of freight settlements (contracts defining the cost parameters of a freight operation).

This is part of our series of articles about SAP security.

How Does a Transportation Management System Work?

A TMS is connected to the systems of multiple freight operators, allowing it to access, store, and compare operator details. This includes the ability to optimize routes and shipping methods and track the progress of shipments.

A TMS works in conjunction with other software as part of a broader supply chain management system. It is commonly integrated with enterprise resource planning (ERP) and warehouse management systems (WMS).

When integrated, these three systems can support end-to-end management and automation of the transportation process:

  • ERP handles accounting, order management, and billing.
  • WMS helps manage warehouse functions such as palletizing, order processing, shipping and receiving, and inventory tracking.
  • TMS is responsible for cargo management, route, and carrier optimization.

SAP Transportation Management Features

Following are key features of SAP TM.

Strategic Freight Management

SAP TM helps manage freight procurement at scale, letting you streamline contract quoting, forecast future shipping needs, and negotiate rates with customers, carriers, and logistics service providers.

Transportation Planning and Optimization

SAP TM provides manual and automated tools for planning and optimization, letting you determine the best resources and routes. You can reduce shipping costs by planning for inbound and outbound shipping across locations.

Document Management

SAP TM can produce and manage documents needed for the shipping of freight units. A freight unit is the shipping unit used in planning—it can be a pallet, a container, or a custom configuration such as two pallets that must be shipped together. The system can create the following documents and manage their status:

  • Bills of lading for road, sea, and air transport
  • Labels for freight units
  • Forwarding instructions
  • Freight forwarding orders (FWO)
  • Order-based transportation requirements (OTR)
  • Delivery-based transportation requirements (DTR)

Order Management

SAP TM integrates with the SAP ERP system through the Process Integration (PI) interface. When integrated, orders and deliveries in SAP ERP can be automatically converted to SAP TM delivery requirements.

If you are running SAP TM as a standalone system, you can manually enter the Create an LSP Forwarding Order via the UI or integrate it with a customer system via Electronic Data Interchange (EDI).

Reporting and Analytics

SAP TM provides real-time data which you can use to generate reports to analyze shipping operations. New versions of SAP TM leverage the S/4HANA in-memory database and also provides an extensive catalog of SAP Fiori applications to visualize and support transport-related business processes.

SAP Transportation Management on S/4HANA

The initial release of SAP TM ran on Netweaver (NW) or SCM server. Current versions of SAP TM leverage S/4HANA in two deployment models:

  • SAP TM embedded within S/4HANA—this is the common deployment model for new SAP TM deployments.
  • SAP TM running standalone on S/4HANA—this is useful for the following scenarios:
  • A dedicated TM system for multiple ERP instances, which may be running on SAP ERP Central Component (ECC) or S/4HANA.
  • An existing standalone TM which connects with multiple ERP ECC instances, where some have not been migrated to S/4HANA.
  • A different release or upgrade cycle for the TM vs. ERP.

As shown in the image below, it is also possible to combine these deployment models. The same S/4HANA can be used both for embedded TM and for standalone TM.

SAP Transportation Management flow chart
Source: SAP

What is SAP Transportation and Freight Collaboration Jump Start?

The evolution of the freight market and changes in rules such as teleworking policies have given shippers new, efficient ways to manage freight operations. Operator resource availability depends on a number of factors, including industry, device type, and geography, resulting in spikes in demand and significant changes to shipping rates.

At the same time, with the advent of new shipping services, shippers can benefit from real-time spot prices and digital carrier networks. This is a decentralized marketplace with multiple peer-to-peer connections that are difficult to maintain.

The SAP Transport and Freight Collaboration Jump Start bundle is focused on outbound road transport, enabling shippers to better manage cargo operations in these new market conditions. The solution leverages SAP’s advanced logistics platform and network capabilities, including SAP TM and SAP Logistics Business Network (LBN).

There is native integration of freight collaboration options between SAP TM and SAP LBN. The integration provides UI-based B2B connectivity to digital freight forwarders for rapid deployment and onboarding of freight partners.

SAP Security with PathLock

Managing security across multiple SAP instances can be a challenging, time-consuming, and manual process. Without proper security protection in place, companies expose themselves to threats that may lead to system outages, data loss, or financial fraud.

With Pathlock, organizations using SAP can automate many of their SAP security processes to provide 360-degree protection across the SAP system landscape. The Pathlock platform can provide proactive protection, including:

  • Vulnerability scanning: run periodic scheduled or ad hoc scans of 1,000’s of rules across SAP instances to identify any known misconfigurations, missing patches, or other risks to be addressed by the business
  • Threat detection and response: identify and respond to unusual behavior to remediate threats and reduce risk exposure in real-time
  • Code scanning: inspect custom code and transports for any potential performance issues or malicious code that could cause data loss or negative impacts on system performance
  • Compliance Reporting: continuously monitor and report on key controls related to application configuration, IT general controls, and other compliance mandates

Interested to find out how Pathlock can help to automate your SAP Security program while keeping your landscape secure and compliant? Request a demo of Pathlock today!

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