A large group of companies whose main business is the manufacturing of goods, might depend on some other LSPs or may have their own separate company that is solely looking for all of these transportation activities from all other companies by assigning transportation service providers to the orders.
SAP Transportation Management supports this Group Logistics scenario & eases the criticality of the process for timely delivery of material to the customers. Also, each order is settled internally first with the company which provided transportation service internally & later with the carrier by that company.
Advantages of Group Logistics
- As a shipper, you can club all the transportation demands of the company in one organization.
- More buying power to negotiate freight rates.
- As an organization is only focused on transportation, Visibility & Process standardization improved.
It is demonstrated below:
Company A & Company B are manufacturing products.
Case 1: Logistics Company within a group of companies looks after all the Transportation services as per the demands generated by other lines of companies.
Case 2: Apart from Company A & B, the third company manufactures products as well as performs transportation activities for its own and Company A & B.
The key difference in a group logistics scenario is that the BU manages the transports
consolidates orders from multiple other lines of business of the group.
These transportation services are paid by the logistics company. Other companies might require these transportation charges to be displayed/used for sending it back to the ERP system for Finance/COPA related activities. To distribute charges Internal settlement is used in SAP TM.
As trusted SAP partners, we have successfully implemented SAP TM end-to-end for many customers, and we can help establish this for you as well in SAP TM.
