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Introduction of SAP TM (Transportation Management) Generic terminologies

Updated: Jan 29, 2022

SAP TM is a solution to perform all activities connected with physical movement/transportation of goods from one location to another. When there is demand or customer requirement for any product then for manufacturing raw material is required and hat need be carried till warehouse as material will be stored in warehouse and after manufacturing, when there is requirement from end consumer the material need to be carried to customers place. So in both ways to carry out seamless goods movement SAP TM( Transportation Management) will play important role.

SAP TM is a part of supply chain management and a standalone application to meet the complex distribution scenarios. SAP TM focuses on reducing the transport cost and improves efficiency by improving traceability and visibility for all logistics activities and keeps collaboration and coordination with all staff levels and functions.

Types Of transportation Management-

1) Internal –

Internal transportation is movement within same premises or warehouse for example if the material is needed for trial or testing, raw material movement from warehouse to production area, from production area finished goods movement to the goods issue area.

2) External-

External transportation is supplying material to consumer or movement from one plant to another or two distribution centers.

Transportation and logistics-

Transportation Management makes big impact in supply chain management as transportation cost is involved which has direct impact on company profits and material price as well. So in short movement of material in right place and right time is important.

Transportation Roles-

1) Shipper- Shipper is consigner and who arranges for goods to be shipped. Shipper can be a company produces the goods or vendor who supplies the raw material.

2) LSP- Logistic Service Providers are executing or actual performing transport. They are third party and outsourced entities by shippers.

Transportation Relationships-

1) Consignor- Consignor is shipper.

2) Consignee- Consignee is end consumer.

3) Freight forwarders- Freight forwarders collect the requirement from shipper and provide it to Carriers. Shippers have Freight forwarders contract with them and they arrange the carriers and they do not possess and any transportation equipment’s.

4) Carriers- Carriers actual transports the goods and possess transportation equipment’s and they have freight contract with freight forwarders.

Types of transportation-

1) Full truck load (FTL)-

FTL or Full truck load is the transport of goods that fill up the full truck or a partial load occupying 80 to 90% of the truck. Bulk material mostly transported by this and it is contracted to one customer also it is faster but expensive.

2) Less than truck load (LTL)-

Less than truck load means transportation with smaller quantities and the material loaded will not occupy entire space of the truck means when there is need of movement of goods in smaller batches and quantities then LTL is used.

3) Full container load (FCL)-

Full container load (FCL) is and ocean shipment and in which a cargo occupies full container of any size and used by a single consignee when there are large amount of goods needed to transport and booked by a single shipper.

4) Less than container load (LCL)-

Less than container load (LCL) also an ocean shipment but here full capacity of container not utilized so many small shipments combined together in Cargo means if a Shipper does not have enough product then the goods loaded along with other shippers goods and moved together.

Types of transportation-

Direct Shipment- Direct shipment is delivery method to pick load from one place and unload or deliver to customer’s place.

Milk runs- Milk runs is a delivery method to transport the mixed loads from various suppliers to one customer where loading and unloading takes place at different places.

Partial loads- Partial loads is a delivery method to transport the mixed load and loads from various suppliers but unloading takes place at final customer only.

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