Authored by: Hariharan Subramanian & Vijendra Kargudri
The need for group logistics?
Often, large enterprises have multiple companies, manufacturing different products. Being solely into manufacturing, such companies’ core business activity isn’t transportation.
As such, they need to transport their products to customers in a safe & timely manner. Such an enterprise can experience one of the following business scenarios:
- Company A in the enterprise manufactures products along with planning and organizing transportation services for all other internal manufacturing companies, or
- Company C in the enterprise does not manufacture product but instead is a dedicated group logistics company.
All the manufacturing companies in the enterprise use the group logistics company A or C for transportation services. This is primarily to help the group of companies/enterprise in the following ways:
- Consolidate transportation demands across group companies
- Share the transportation capacity across group companies, thereby maximizing the resource utilization
- Standardize logistics process across group companies
- Negotiate better contracts with the carrier as the volume of the business is higher
- Have complete visibility of the demand & execution from a centralized operation.
How SAP TM helps Group Logistics
SAP TM can handle the Group Logistics scenario and here is how it works:
For example, as depicted in the process diagram, Company 1000 and 2000 manufacture two different products in the enterprise and Company 3000 carries out logistics for both – Company 1000 and 2000.
In such a scenario, this Company 3000 will completely be responsible to handle the following activities for Company 1000 & Company 2000:
- provide end-to-end Transportation & Logistics
- negotiate the contract with the Transportation Service Provider
- execute Planning & Execution of the transportation activities for both the companies
- execute Freight Settlement for Transportation Service Provider
Company 1000 & 2000 will execute internal settlement to company 3000 for the services rendered by it.
Krypt, as a preferred SAP partner has successfully implemented SAP TM for major enterprises across the globe. Across industries, Krypt can help such enterprises to optimally resource & route their supply chains using SAP TM.
If you wish to know about Krypt’s products/services, please request a demo or do contact us.
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Image Credit: HiClipart