SAP Charts New Frontiers in Transportation Management

Building on its best-in-class supply chain applications and road map for adaptive business networks, SAP is embedding its existing transportation software with new capabilities enabling companies to sense and respond quickly and profitably to the fast pace of change in today’s competitive transportation environment. The announcement was made at the BVL German Logistics Conference, being held in Berlin, Germany, October 19-21.
In an increasingly complex global transportation landscape, there is less margin for error; the ability to work efficiently with network partners, make profitable and timely decisions and meet customer demands has never been more crucial. Once marked by linear routing from manufacturer to customer, transportation is now a service distributed across a widespread global network of partners and logistics service providers (LSPs). Customers move goods to numerous destinations via multiple modes (air, sea, road, and rail) and require on-time delivery faster than ever: consumer goods makers, for example, have reduced order-to-delivery cycles by 50 percent, now averaging 3.6 days compared to 7.8 days in 1999 (“The GMA 2005 Logistics Survey,” IBM Business Consulting Services, June 2005). These same customers are demanding the accelerated service at the same or reduced cost.
“Globalization, outsourcing and shrinking cycle times are adding risk, cost and complexity to transportation operations,” said Adrian Gonzalez, director, Logistic Executive Council, ARC Advisory Group. “Companies must recognize that transportation management does not exist in a vacuum; it’s a process that interfaces with a variety of other business functions, including order management, purchasing, warehouse management, customer service and financials. Companies that take an end-to-end, process-centric perspective will achieve greater financial and operational success.”

Full force of SAP Software for transportation transformation

By adding more business process flexibility into its software, SAP will turn the core dilemma of transportation into competitive advantage: companies will be able to meet the unique delivery requirements of individual customers on time while still achieving cost efficiency. Business processes across the entire enterprise and extended transportation network will be connected, making exceptions easier to handle for companies and their partners. For example, transportation managers will be able to perform continuous route optimization based on real-time events. Real-time visibility across the extended supply chain will help managers reduce “firefighting” and the creeping cost of “maverick spending,” better identify revenue opportunities and improve asset utilization. Embedded analytics will help managers increase profitability by calculating the net gains during the entire process from bidding to delivery.
“SAP is the only vendor that can provide a connected transportation solution and vision that integrates logistics, financial and information network elements to enable profitable logistics decisions and execution to support an adaptive supply chain network,” said Jim Hagemann Snabe, general manager, Industry Solutions, SAP AG. “Building on our best-in-class applications, we are designing a service-enabled transportation solution that integrates end-to-end business processes spanning enterprise and network boundaries. With SAP, companies today are already gearing up to create the adaptive processes of network-centric transportation that define supply chain superiority.”
SAP’s existing transportation management software is used today by more than 2,200 companies. Major transportation management extensions such as order split and merge, routing guide and one-time ship will be available in the next version of mySAP Supply Chain Management (mySAP SCM), scheduled for December 2005. Additional transportation management capabilities are planned to be available for first customers in 2006, with further functionality to follow in 2007. The capabilities will also enhance the recently launched industry solution portfolio, SAP for Logistics Service Providers.

Source: SAP AG