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Evolution of SAP TM (Transportation Management)

Updated: Jan 29, 2022

SAP started to develop business software for transportation processes from 1987 i.e. from R/2 system.

1987 -

TM was one of the component from logistics and distribution area and viewed from the the perspective of local distribution and the business mainly focusing on production and optimization of logistics processes related to production.


SAP TM application originated in the logistics application of R/3 as a part of LE-TRA and it allowed users to plan and dispatch multiple deliveries together while creating shipment. Other important functions like calculation calculation of transportation charge and vendor settlement also included.

This R/3 transportation system had manual or rule based planning options like deliveries with same shipping point, postal code could be grouped together also the application controlled dangerous goods check and connected with SAP EHS.


Later in the year 2000 SAP provided APO 3.0 with TP/VS for complex transportation planning and more optimization for allocating the sales orders, resources for meeting delivery deadlines and capable of planning at the Sales order level and also at delivery level, changes in delivery etc. TV/PS runs on the SCM component as a part of SAP APO. After planning completion of shipments communicated to ERP system for further document printing and settlement.


SAP came up with centralized solution as Event Management to track and control panned and actual business events.

2007 onwards-

SAP TM 6.0 and 7.0 evolved from SAP TV/PS solution. SAP TM designed to map complex transportation network and supports the entire business process. The solution consists of optimization algorithms for transport and route determination.

SAP TM 8.0 the architecture redesigned and execution improved. SAP TM improving and evolving according to mobility friendly elements.

Key benefits-

  1. Reduced cost and operational performance improvement

  2. Improved carrier collaboration and resource utilization

  3. Efficient, end to end order and process management

  4. Improvement in execution visibility

Features of SAP TM 9.0-

SAP TM provides deep and seamless integration with OTC and PTP process cycles for timely execution and updates.

Planning features are available for supporting order management and integrated freight settlement available with billing and invoicing witch will help o speed up the business process cycles.


Interactive and mass processing-

SAP TM supports both domestic and international shipment planning with ocean freight booking and customs. Transportation planning cockpit tool allows users to see order details, map transit routes and mass processing. SAP ERP takes order and SAP TM goes from order to carrier tendering as a smooth process and without user involvement.

Document management-

This included document creation, status management, printing of bills of lading, labels and many more. SAP EHS integrated for dangerous goods handling and for international shipping ,customs and compliance management with SAP GTS is supported with export documents.

Different types of transportation requests are available in SAP TM like freight forwarding orders, order based transportation requirements(OTR) and delivery based transportation requirements(DTR)

Freight units and freight orders-

After receiving transportation requirement freight units are created. Freight units are basic elements like pallet or containers and used for planning.

Freight orders will include manual or system generated transportation planning activities. Freight orders will be created by planning , consolidating freight units , booked capacity and scheduled means of transport. Once this freight order gets completed transport orders triggers and settlement processing begins.

Order management-

By using forwarding order management component in SAP TM users can create , edit and confirms forwarding orders from ordering parties also data can be entered as forwarding quotation and sent to ordering party then based on the forwarding quotation user can create forwarding order.

Transportation planning-

SAP TM has the ability to perform advanced planning activities. Freight orders used for lad transportation and freight booking used for air and see transportation.

Transportation planning processes include-

  1. Transportation cockpit.

  2. Planning and optimization.

  3. Carrier selection.

  4. Order tendering.

Transportation execution-

In addition to advanced planning there are added benefits generation of delivery documents and shipping documents in SAP ERP other system interfaces. Application of analytics to analyze and adjust business processes

Integrated with SAP EHS, SAP EWM , SAP EM(Event management)

Freight settlement-

Settlement process supports for

  1. Defining transportation changes

  2. Defining freight and forwarding agreements

  3. Generation of settlement documents

  4. Integration of customer billing

Features of embedded S/4 HANA TM-

Embedded TM with S4 HANA will provide some additional benefits-

  1. No requirement to transfer master data to TM (and hence CIF is not needed)

  2. No duplication of certain configuration object and transaction document

  3. Reduced data base foot print

  4. Lower TCO (Total cost of ownership)

SAP TM provides the following functionalities which are more advanced than ECC LE-TRA-

  1. Freight management-

  2. Sales order management

  3. Transportation planning

  4. Selection of carriers:

  5. Transportation execution

  6. Combination of inbound and outbound deliveries in a shipment

  7. Freight cost and settlement

  8. Analytic s and reporting

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