The Power of SAP S/4HANA Cloud Processes – Outbound Transportation Management
As the scope of SAP S/4HANA Cloud continues to grow, the 2108 release has laid the foundation for another significant addition to its logistics capabilities. SAP S/4HANA Cloud now offers a basic transportation functionality for inbound and outbound scenarios. From an end-to-end logistics execution perspective, this could be considered as the missing puzzle piece to fully run logistics execution processes in SAP S/4HANA Cloud.
Starting with one inbound (5OS) and one outbound (4MO) process for manually planned road freight orders, the scope will be further enhanced over time. If you are familiar with the logistics scope of SAP S/4HANA Cloud, you might know that there has been a scope item for transportation management before (3EP). However, this process relies on the integration with an external transportation management system like SAP S/4HANA Transportation Management.
Comparing both options shows that the main difference lies in the planning part of the transportation management process. Whereas in the integration scenario the transportation requirements are sent out to the external transportation management system for planning, the new process allows planning directly in SAP S/4HANA Cloud using an adapted version of the transportation cockpit user interface that is known from SAP S/4HANA Transportation Management.
Both options are available in parallel, since they have their clear advantages and target groups. This is also why with the 2111 release the outbound option of the integration scenario (3EP) has been complemented by an inbound option (5VV). Thus, the integration scenario is intended to be leveraged by customers with planning tasks that require the complexity and optimization capabilities offered by a best-of-breed solution or in case that there is a central transportation management system serving several connected ERP systems.
The new manual planning scenario intends to serve customers with moderate transportation planning requirements aiming to run their logistics execution end-to-end in a public cloud solution. As mentioned above, this does not mean that the functionality remains as described in the initial scope. It will be for example extended to further transportation modes in the future. Have a look at the roadmap for further details.
In the following, the outbound transportation process will be explained as one example for logistics execution run in SAP S/4HANA Cloud end-to-end.
Create Freight Unit
The process supports order-based planning, which means that freight requirements are created automatically when a sales order is created (1). The same applies for purchase orders in the case of an inbound scenario. The created freight units are used as the base unit for transportation planning in the transportation cockpit.
Create Freight Orders
For transportation planning, the relevant set of freight units is filtered before they are selected and assigned to an equipment via drag and drop in the transportation cockpit. In a first step, this creates temporary freight orders, which can be checked and changed in course of the planning until it is finalized. By saving the planning result, the actual freight order is created (2).
After the freight order creation, further details about the freight order execution need to be specified in the freight order. The most important aspect is to define the carrier to run the shipment. This requires not only to select a carrier but also to specify the organization that is buying the freight service and paying the carrier for the latter. To finalize this subcontracting process, the order details are sent out to the defined carrier to ask for its confirmation (3). This interaction is tracked through the status management of the freight order.
Handover to Carrier
With the confirmation of the carrier received, the actual logistics execution process can be triggered by creating the outbound deliveries related to the freight order. Based on the deliveries, the goods are picked, packed and staged to be handed over to the carrier. Based on a consistent status management, each of the handover steps is documented. Starting with the truck arriving at the yard and checking in and ending with its check out and departure after the goods have been loaded (4). With the departure of the truck, the goods issue can be posted.
Bill to Customer
Since the truck is on the road and the freight service is in execution, a freight cost accrual needs to be posted to reflect the upcoming freight costs based on the calculated charges (5).
Furthermore, the customer billing process is started, where the freight costs will also appear on the invoice that is sent to the customer (6).
Post Carrier Invoice
Finally, after the freight service has been fulfilled, the carrier sends an invoice that is verified and posted to settle it against the cost accrual created earlier in the process (7).
A final look at the document flow for the freight order summarizes the process and the created documents again (8). Starting from a sales order, freight units were created as granular entity for transportation planning. During the planning, a freight order was created by assigning the freight units to a capacity. Based on the freight order, outbound deliveries were created to trigger and orchestrate the process of preparing goods for shipping. The latter was run by the carrier, captured in a service entry sheet and finally invoiced.
With the new Outbound and Inbound Transportation Management processes SAP S/4HANA Cloud complements its existing logistics capabilities and allows to run logistics execution processes end-to-end in a public cloud system. Watch the video to see the process live in the system.
Outbound transportation management is only one of many innovative processes in SAP S/4HANA Cloud. Follow our video series to get insight into further innovative and integrated processes regularly.
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