Regardless of how well-planned, well-managed, or well-orchestrated you think your logistics and transportation processes are, disruption can happen at any moment and result in customer and financial losses. The Suez Canal obstruction, which froze nearly $10 billion in trade daily, is one great example of bolt-from-the-blue supply chain events.
International shipping is expensive - with or without a supply chain disruption - due to transportation distance, compliance requirements, and assets needed to deliver the goods. It’s been a challenge for global players to cut transport costs without sacrificing speed to satisfy customers and obtain higher profits.The Price Of Speed
“Speed-hungry customers” are willing to pay more for lightning-fast delivery. A 2022 report revealed that 73% of consumers “view fast delivery as critical online shopping criteria, a 16% increase from 2020.”
Likewise, businesses are willing to spend more to accelerate shipping. Amazon, for one, “spent a massive $9.6 billion on global shipping costs in the third quarter of 2019.” It hired more than 100,000 people and deployed more than 100,000 robots in the same year to work for its transportation and logistics. In 2021, the e-commerce giant announced pay increases across its transportation and fulfillment networks.
But how can other businesses compete with or get their cue from the likes of Amazon when it comes to international shipping? How can they find the right balance between keeping costs to a minimum and accelerating shipping?Control And Visibility
Ensuring seamless and fast delivery of goods is more difficult for international traders because visibility and control can be limited. You will face various roadblocks during the entire process, from utilizing and managing your global transportation and logistics assets to ensuring all orders are in the correct containers and reach the right customers at the right time.
To remove the roadblocks, you need to improve visibility and control by
SAP Transportation Management (SAP TM) solution empowers you to achieve these goals.The Right ‘Vehicle’
By leveraging the SAP TM solution, you can create rules-based routing proposals to minimize freight costs and enhance customer service. SAP TM lets you fully harness data to improve resource utilization and carrier selection, avoid costly errors, and achieve right-time delivery.
SAP TM allows your organization to increase accuracy, efficiency, and speed by eliminating manual activities. It enables you to maximize the return on transportation spend through automated freight settlement, consolidation, and negotiation with simulation and what-if analysis. SAP TM also improves transparency using automated transportation cost calculation and integrated transportation management and billing.
Lastly, you can enable real-time, data-driven decision-making using SAP TM. SAP TM provides intuitive dashboards and graphical visualizations to help you understand transportation events easily, mitigate risks proactively, and avoid costly shipment delays.How To Get Started
To implement SAP Transportation Management, you will need to hire and train an in-house team or seek help from a third-party organization. Both have pros and cons. The latter can be a better option if you want to start the implementation quickly and avoid costly trial and error.
In addition, partnering with industry and technology experts like Ropaar allows you to get comprehensive global trade services and explore innovative ways to optimize the end-to-end global trade processes.Conclusion
To cut transport costs while ensuring seamless and fast delivery of goods, you need to improve visibility and control over your transportation activities. But this can be more challenging for global traders.
SAP Transportation Management allows you to improve visibility and control by integrating core supply chain and business processes, automating and standardizing order management and transportation planning, and enabling end-to-end visibility into all transport activities.
However, the success of your SAP TM integration depends on who your implementation partner is. Drop us a line if you need expert assistance in implementing SAP TM. Contact us.