Category: supply chain

Supply Chain Logistics and SAP TM

SAP Transportation Management or SAP TM is a module used for Supply Chain Optimization.

SAP TM has four different optimizer engines –

VSR Optimizer: Plan Shipments in the best possible way on available Vehicles via available routes. TVSR (Vehicle scheduling and routing), TVSS, TVRG Applications come under this.

Load Optimizer: Arrange pallets or packages on the vehicle considering rules like Stackability, etc. (TVSO Application)

Carrier Selection: Rank carriers[1] for each shipment considering costs, Business Shares, Allocations. (TSPS Application)

Strategic Freight Management: Rank bids by carriers for long-term contracts based on Cost, Capacity & Risk. (TSFM Application)

The need for Transportation Management as a service is justified by several use cases.

Many recent announcements from leading car manufacturers and other companies whose business models are susceptible to disruption are adopting TaaS platforms (through in-house development efforts, partnerships, or acquisitions) to provide services:

The role of APIs in modernizing supply chain systems from legacy EDI based designs – https://www.coupa.com/blog/supply-chain/tech-forward-apis-emerging-player-supply-chain

A comparison of API vs EDI systems – https://arcb.com/blog/edi-vs-api-which-is-right-for-my-business

Some definitions from Wikipedia to clarify concepts-

Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations.

The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items.

Logistics management is the part of supply chain management and supply chain engineering that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and point of consumption to meet customer’s requirements. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software.

The minimization of the use of resources is a common motivation in all logistics fields.

A supply chain is the connected network of individuals, organizations, resources, activities, and technologies involved in the manufacture and sale of a product or service.

How can we be better prepared for a future crisis relative to supply chains?

Private companies have playbooks for supply chain disruptions in their network. In supply chain management, it is crucial to diversify your source of supplies so that when one supplier is impacted, you can turn to the other.