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SAP Transportation Management and SAP Yard Logistics

SAP Transportation Management and SAP Yard Logistics is the subject of our IgniteSAP blog post this week. It follows our recent discussion of SAP Extended Warehouse Management. We will look at the challenges of transport management resulting from the Covid-19 pandemic. Then we’ll discuss permanent changes that this has brought to the practice of transport management. After that we will explore training in implementation and maintenance of SAP TM systems. About how it brings increased prospects for high paying contracts, or long-term employment of SAP professionals with Systems Integrator consultancies.

The New Normal of Transportation Management

According to a report by the International Finance Corporation (part of the World Bank Group): Operational constraints [on logistics companies] are expected to lead to delivery delays, congestion, and higher freight rates. However, not all segments will be impacted equally—companies that serve e-commerce are seeing increased activity as consumers opt for online shopping of essentials, while those that serve other sectors (such as auto and consumer goods) will see a downturn.

The relationship between the various sub-sectors of the Logistics sector in this respect is not a simple one. However we can generalise to the extent that there will be winners and losers in the logistics market over the next few years as companies adapt to the new market conditions.

The Changing Transportation Management Market

These market changes are taking place on a background of accelerating demand for logistics provision over a longer time frame. This is due to a substantial increase in e-commerce. In a recent article by Forbes it was reported that FedEx had declared a net-income rise of 183% and earnings per share were up 175%.

On June the 4th Businesswire posted a summary of the ResearchAndMarkets.com report into the European contract logistics market:

“While the impacts of Covid-19 have been negative overall on the economy, certain sectors have seen significant growth in sales, such as grocery, retail and consumer electronics marking positive developments for the European contract logistics market in 2020. Owing to the rise in demand for more integrated services, data management and the preference for flexible solutions, the contract logistics market is expected to witness high growth.”

The report also states that outsourcing of logistics will increase. With this there will be more competition which we can see will result in a greater need for software and skilled operatives. People to administer to these systems, even among those companies who keep logistics in-house.

In Europe the primary reaction to the instability of supply chains was to shorten them. Traditional manufacturing centres such as France and Germany have moved to being more service-based economies. The manufacturing centres of choice are increasingly found in central and eastern Europe rather than Asia. This trend brings with it an increase in land-based freight. It follows that there will be an increase in demand for software services that cater for logistics provision. SAP is a leader in the Gartner Magic Quadrant for Transportation Management Systems for 2021.

SAP Logistics Solutions

Now we have seen why the need for solutions such as SAP Transportation Management and Yard Logistics is increasing, we will give a brief overview of these so our community members can begin to assess whether training in this area of SAP will be a valuable addition to their own SAP skillset.

SAP summarises the function of SAP Transportation Management as a means to: “Consolidate orders and maximise the return on your transportation spend. Forecast demand and shipment volumes accurately to fine-tune transportation planning. Enhance freight, fleet, and logistics management to gain real-time visibility into global transportation and domestic shipping across all transportation modes and industries.”

In essence the solution aims for comprehensiveness with an emphasis on ease of integration for customers who already run other SAP solutions. For example S/4HANA can update databases in both Transportation Management and Extended Warehouse Management: contributing to oversight of the whole business network. Other features that SAP is keen to advertise are on-premise or cloud deployment, the ability to plan for transportation needs in relation to demand, interactive freight tendering, a visual interface for individual truck loading and  a collaboration portal for companies to interact with their partners in the supply chain network.

Process Flows in Transportation Management

SAP Transportation Management is designed around process flows. This clarifies understanding of the movement of goods. Operational costs can be reduced while optimising the performance of the Transportation Management system.

SAP Transportation Management brings together Master Data, Analytics, Planning and Optimisation, Order Management, Freight Cost Calculation and Accounting, Event Management and Sub-Contracting. These can visualised as a flow from one transportation manager to the next in a chain of roles with corresponding responsibilities.

New SAP Management Features and Transportation Management Concepts

The dynamic structure described above is a simplified model of a SAP Transportation Management system. The warehousing and transport management needs of a particular company are always unique to some extent. This means there are many variations on the basic structure. The basic model of a Transportation Management System is changing over time in response to changes in the wider economy and the availability of new technologies.

SAP Advanced Shipping and Receiving is a new integration feature for SAP Transportation Management and Extended Warehouse Management that simplifies communication between the two platforms and other SAP stock and inventory tracking software. This new feature allows users to set up mixed warehouse and multi-warehouse management systems, for more efficient use of available trucks.

In recent months a new concept has developed to make truck use even more efficient. Trailers are loaded now without trucks. Trucks are then only present went connecting to the trailer for transportation. This is the “Power-Only Drop Trailer” concept. Implementation of this system benefits those managing the shipping by increased efficiency and flexibility of resources, and reduces time when assets are idle.

SAP Yard Logistics

With greater pressure on the supply chains, managers have become more flexible and sought innovative ways to reduce inefficiencies. New innovations are sought because the yard is another link in the supply chain where time and company assets can be wasted.

Monitoring Yard operations carefully can reduce traffic and delays and also ensure safety of yard operatives.

SAP Yard Logistics is a SAP solution that targets the crucial connection between transportation and warehouse. Fluency in this package is a highly sought after skill among System Integrators for transport management systems.

SAP Yard Logistics includes the following features that are desirable to those who need to make sure the loading and unloading process is not a bottleneck in a supply chain: close integration with other SAP supply chain oriented solutions, planning for inbound and outbound loads, automated check-in, stacking and location rules, print and alert functions for labels, documentation and instigation of other processes, scenario-based quality checks and measurements for yard transportation units, and analytics.

Live 3-d animations of yard movements helps managers picture the location of each load.

The Need for SAP TM and YL Professionals

The demand for professional systems integrators of SAP Transportation Management and SAP Yard Logistics has been increasing over the last year and a half. As the market for logistics providers has increased in some areas and become more competitive, this has had a knock-on effect on the employment prospects of those who can build and maintain these systems. Agility and resilience in supply chains requires IT professionals who can confidently install and adapt computer systems to the almost daily chains in supply and demand that characterise this working environment.

Training in SAP Transportation Management and Yard Logistics

If you are interested in extending your SAP skillset with training and gaining global certification in SAP Transportation Management then the Learning Journey document on the SAP Help Portal will give you a clear description of what SAP courses to take. These course are available for individual purchase on the SAP Training Shop but the most cost-effective way is subscribe to the SAP Learning Hub if you are intending to become fully qualified.

You will need to start with an overview course in Digital Supply Chain (DSCM1), followed by the Processes in Transportation Management course (TM100). In order to demonstrate competency in SAP Transportation Management you will be required to take a more specialised module such as SAP Transportation Management for Logistics Service Provider (TM140) and the SAP Certified Application Associate exam (C_TM) [Transportation Management 9.5].

While achieving associate status in SAP Transportation Management will substantially increase your employment prospects, you can train further to become a SAP Certified Application Specialist and become one of those IT professionals who command the highest fees for your expertise. Though it will require investment in time and money, schedules for learning can be adjust to fit around your work commitments and the return on investment for SAP qualification as a specialist is very impressive.

Careers in SAP Transportation Management and Yard Logistics

An experienced SAP Transportation Management Contractor/Freelancer can expect rates from €800-1200 a day. Permanent employees of Consulting/SI’s that are functional experts with 4-6 years of experience can command an annual package of €70K – €95K, experienced project/program managers or solution architects should expect between €90K – €130K: this depends on your years of experience, project size and complexity. If you wish to exceed €110K you would be expected to bring a business case. This includes strong customer relationships, historic revenue generation of at least €500K, and potentially a small team of junior consultants.

If you are looking to optimise your ability to command higher value contracts in SAP implementation or achieve an optimum permanent package, in SAP Transportation Management or any other SAP solution, please reach out to IgniteSAP so we can discuss your available options, and help you present yourself as the candidate for success.