SAP for Warehousing and Transportation: An Overview

SAP Integrated Business Planning, SAP Extended Warehouse Management, SAP Transportation Management, SAP Global Track and Trace: For planning and optimizing transportation and logistics processes, SAP offers many technologies that work hand in hand.

At the heart of them all is SAP’s supply chain execution platform, which we take a comprehensive look at here.

One challenge that companies face is ensuring that they have sufficient knowledge of market demand, their own production potential, transportation and logistics capacities, and what is currently going on in their supply chain. The most important tools at their disposal include SAP Integrated Business Planning and SAP’s supply chain execution platform, which integrates SAP Extended Warehouse Management, SAP Transportation Management, and the cloud application SAP Global Track and Trace. SAP is also planning to make it much easier for business partners to work together through SAP Logistics Business Network.

Planning and Optimizing Supply Chains

The SAP Integrated Business Planning solution is designed to help companies plan out their supply chains based on their production and revenue targets. This planning is centered on SAP Integrated Business Planning for sales and operations, where sales and production come together in a recurring process to determine the production and delivery capacities that will meet the demand for each product in each region. The solution provides the starting point for this process by using current and historical sales figures to predict market demand for months, weeks, and even days. Customer examples have shown that clever combinations of SAP Integrated Business Planning algorithms can produce demand forecasts that are up to 80% accurate.

Based on this demand planning, SAP Integrated Business Planning for inventory can then aid companies in optimizing their safety stocks. Customers that are combining these solutions are saving hundreds of millions in related costs. SAP Integrated Business Planning for response and supply, meanwhile, creates plans for the provisioning of goods and capacity. In doing so, it simulates different ways to meet demand and bases its planning on the most suitable option. Results from the solution indicate which products should be manufactured at which locations, along with the corresponding transportation requirements. If an important order is received after the plan is created, the solution’s response management component determines whether and how it can be fulfilled. The solution also simulates the resulting adjustments and incorporates them into related decision-making processes.

Optimizing Transportation and Logistics Processes

Th SAP platform for supply chain execution, which includes SAP Transportation Management and SAP Extended Warehouse Management as a foundation for integrated logistics processes, combines the offerings with track-and-trace solutions. “SAP Transportation Management plans your execution and SAP Extended Warehouse Management carries it out,” explains Franz Hero, head of development for digital supply chain management at SAP.

Just as importantly in the era of individualization and lot sizes of one, the tight integration among solutions provides for increased speed. The packages that arrive at a transit warehouse, for example, can be immediately repackaged for their ongoing transport and transferred to the loading area, which helps minimize the time they spend at the warehouse.

“SAP Transportation Management and SAP Extended Warehouse Management are also deeply embedded in SAP S/4HANA, which will open the door to unprecedented optimization possibilities in the future,” Hero adds. Sales employees, for instance, will be able to simulate the transportation units in a given order and offer specific discounts to make the best possible use of shipping trucks. In product development the ability to calculate how goods will be stacked on palettes will enable employees to adjust their packaging and optimize storage space.

Fast, Flexible Application for Warehouse Management

SAP Extended Warehouse Management excels at managing warehouses and material flows. It covers every key warehouse process, from goods receipt and putaway to finishing, picking, and goods issue. The application also offers functions related to other areas, including analytics and billing features for warehouse services. In goods receipt, it assigns delivery gate appointments and supports both simple and complex putaway processes. Shift managers can use its charts to monitor work efficiency and take action as needed. In addition, SAP Extended Warehouse Management optimizes picking and can significantly accelerate warehouse processes through a high degree of automation. It leverages SAP’s material flow control component, which serves as an interface to conveyor belts, scanners, and similar machines.

Organizing and Optimizing Transportation

SAP Transportation Management offers functions ranging from freight unit consolidation and the strategic purchasing of transportation capacity to the planning of individual transports, order tenders, and invoicing. The application supports transportation planners across all the modes at their disposal and can be used in every relevant area. SAP Transportation Management creates the bulk of shipments by means of an optimization algorithm that quickly identifies the most efficient transportation plan. For complex scenarios, it offers tried-and-tested manual planning functions that make it possible to reroute shipments or adjust a truck’s load distribution using a 3D model.

Increase Certainty of Transportation and Shipment Origins

SAP Global Track and Trace is the new cloud solution for cross-company tracing of objects (such as palettes and trucks), processes (a truck’s route, for example), and events (including when temperature limits are exceeded). Configured in the form of a business network, it enables companies to exchange certain types of information. A company expecting to receive goods, for example, can receive notifications when the items are being packaged or other steps are reached. SAP Global Track and Trace also makes it possible to document compliance with specific requirements (such as when products need to be kept cool) all along the supply chain. The solution opens up all-new possibilities, as well.

“SAP Global Track and Trace is a means of ensuring brand security,” points out Michael Kraetz, from SAP’s customer office for digital supply chain management. Here, companies can offer consumers insights into the supply chains that produce various ingredients as proof of how pure or sustainable their products are. SAP Global Track and Trace also promptly notifies companies about various supply chain issues. Through its integration with SAP S/4HANA, the solution will soon be able to determine which of these incidents are critical to a given company’s core processes.

Collaborating Across Companies

Following its scheduled release in 2018, SAP Logistics Business Network is intended to serve as a cloud-based network for logistics. Besides giving companies a simple and efficient means of connecting with one another, this network is planned to enable them to invite bids and check invoices, as well. Additional functions, including for reserving delivery gates at warehouses, are also planned for release later this year. All in all, the platform will save companies time and money by providing a fast, easy way to exchange logistics data with their business partners.

SAP Leonardo: Creating More Intelligent Companies

With SAP Leonardo, even more new technologies are finding their way into the SAP supply chain management portfolio. Blockchains are presenting new opportunities in this regard, including in transferring titles on loads without the need for paper documents. Machine learning, meanwhile, will use process data to automate recurring work steps. Some initial possibilities are already being tested in SAP Transportation Management in the context of driver scheduling. In the future, this will make it possible to automatically handle many of the exceptions reported by SAP Global Track and Trace.

“The goal is to create intelligent companies whose IT systems render most decisions automatically,” Hero reports. This will enable people to focus on complicated exceptions and achieve even more efficient supply chains.

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