Article by Gabriel Sauvageau , SAP SCM Consultant at Beelogix
The expression “Digital Supply Chain” is a trending topic in the supply chain community. Often mentioned as the next accelerating milestone, the digital supply chain is an answer to the new challenges of the ongoing real-time economy. Customers are expecting more speed and flexibility. It translates into a need for better coordination and visibility throughout the supply chain. The digitalization of the supply chain is a solution to this additional pressure. More focused on actionable data, smart features and connectivity, it implies technological tools to increase the interaction, visibility and responsiveness between internal and external partners.
Digital transformation in organizations – like moving from supply chain to digital supply chain – requires technologies to digitize its data and digitalize its processes. This is where software like SAP TM become key tools. Not only SAP TM can support existing digital processes but also offer flexible and accessible digital solutions to physical documents and manual processes. Below are three examples demonstrating how SAP TM can strengthen the digital transformation of supply chains.
1. Tendering via collaboration platforms
In transportation, truck tendering refers to the process of sending/receiving service request for delivery between a service requestor and service providers – mainly carriers. It is often done manually, usually through phone calls, faxes and emails. The tendering process could considerably benefit from the digitalization. SAP TM makes it simple and cost effective with the existing online platform called “Collaboration Portal” and, in the future, the upcoming “LBN – Logistics Business Network”.
They have the following advantages:
- Efficient communication: All participating parties – service requestor and service providers – can communicate and exchange information on the same shared platform, limiting phone calls and emails.
- Optimize carrier selection: For the service requestor, the Collaboration Portal/LBN becomes an open market where transportation requests are sent for bidding to all compliant carriers.
- Flexible: Since both platforms are online, tenders and can be placed and monitored 24/7.
- Connectivity: LBN/Collaboration Portal expands the organisation’s ability to connect with its carriers. Often unfamiliar to digital technologies like EDI, smaller carriers can embark without complex preliminary training or system adjustment. The online platforms have a user-friendly interface easy to connect via an URL address.
2. Digitalization of the invoicing and dispute process
The transportation settlement process, often known for its complexity and cumbersomeness, has a lot to gain from digitalization. Settlement activities vary from one organization to another but usually imply
freight cost calculation, invoice submission, invoice review, invoice payment and dispute management. When performed manually, these steps involve many parties and take days or even weeks. Furthermore, its complexity is amplified with the volume of transactions.
With its digital supply chain solution, SAP TM allows the digitalization of the settlement process, streamlining and simplifying most of the manual steps:
- Freight cost calculation: Agreements are digitized in the system’s database. Auto-calculated freight costs are linked internally with accounting via accruals and shared externally with carriers on the Collaboration Portal.
- Invoice submission: Carriers only review the calculation and convert it into an invoice document. A softcopy can be attached if needed. Once submitted, the invoice is directly linked to the original transportation.
- Dispute management: In case of a discrepancy, a “Dispute Case” is automatically created and easy to identify. it can be managed manually or automatically via smart sensors.
- Invoice review: The invoice review step is completely removed thanks to accruals previously calculated and pushed to accounting.
- Invoice payment: With accruals, the accounts payable clerk simply recalls the transportation document number to complete the payment. If more investigation is still required, related documents and attachments are all linked together.
This fully digitized process in SAP TM eases the overall settlement process and reduces full cycle time. Phone calls and emails can be skipped, activities are streamlined or automated and information including attached documents are digitized. Information is automatically grouped, stored and shared between internal and external partners for traceability.
3. Interactive decision support tools
Transportation planners regularly deal with problems with a high level of complexity. For example, choosing the transportation plan has too many parameters for a human brain to be optimal. SAP TM solves this issue with interactive decision support tools. Opposed to traditional optimization software, the innovative technologies built by SAP are meant to be integrated within daily operations. Transportation planners use them during their planning activities to simulate scenarios, analyze real-time results and determine their own optimal decisions. Here is a short list of SAP TM decision support tools:
- Planning Optimizer: Based on constraints like locations, resources and schedules, the Optimizer can calculate “what-if” transportation plans. Behind, a logic consolidates inbound and outbound orders maximizing at the same time vehicle’s capacities, networks and timelines. The optimized plan has the lowest cost, but additional criteria can be added to consider organisation’s specificities.
- Loading pattern Engine: SAP TM provides an interactive feature to build loading patterns. It can manage multiples rules including goods sizes, vehicles capacities and order sequences. On a screen similar to virtual reality, the planner can visualize and optimize his plan in 3D based on his preferences.
- Business Context Viewer: SAP TM provides live smart-data analysis to support the user in his day-to-day tasks. It can be dashboards, ad-hoc reports but also compiled statistics. For example, at the time of carrier selection, the BCV can support the planner’s decision with useful charts like previous carrier performance or carrier ranking.
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