What is SAP for logistics?

In the last three decades, globalization and digitalization have changed the way of doing business drastically. It has helped companies irrelevant of their size on both sides of the supply chain. Gone are the days of manufacturers relying only on local suppliers or a phone book to find raw materials suppliers to make finished products. With a few clicks, they can find many suppliers to provide the materials. Also, the suppliers have many opportunities to grow their business networks and diverse income streams. It will help them be operational even when one potential customer finds another supplier or goes out of business.

SAP has played a critical role in logistics for a long time with many solutions like SAP Advanced Planner & Optimizer and SAP ERP. And with cloud computing gaining momentum, its cloud products like SAP Integrated Business Planning and SAP Ariba help customers who cannot host SAP systems because of not having the resources. And in 2019, SAP LBN or Logistics Business Network enables networking for many advantages. It includes discovering new partners and connecting and collaborating with partners to gain valuable insight to make more informed decisions.

In this blog, let us discuss how SAP plays a role in logistics, including the best 3PL companies like Go Freight Hub to provide effective transportation, warehousing, and value-added services.

Logistics management by SAP

Logistics management helps meet many critical business objectives of the best 3PL companies. It includes increasing efficiency, reducing transportation costs & adverse events, improving enterprise-wide quality, providing consistent minimum inventory, and enabling rapid response to changing environments. But the 3PL companies need to meet and exceed the operational expectations. Hence, it is possible to enjoy the many benefits of scalability, improve the ongoing business, and increase client trust. Setting the management metrics of internal logistics is crucial for increasing revenue by logistics and achieving the goals. With many of its modules, SAP has helped logistics for the past many years to guide the way for functioning to save time and costs for overall efficiency.

SAP modules for logistics

There are seven modules of SAP logistic services for tracking performance, gaining better perceptibility, and offering precise real-time information about goods transportation. The SAP modules include.

SAP Ariba is a cloud-based solution for e-procurement and supply chain to reduce supply costs to over 10% and for lowering processing costs by up to 60%
SAP EWM or extended warehouse management with excellent integration capacity manages inventory in the warehouse effectively and supports the goods movement in real-time
SAP SRM or supplier relationship management plays a vital role in backing the process of procurement and management to improve product delivery and services
SAP SCM or supply chain management plays a key role in material management, production planning, procurement, and forecasting to help connect customers, business partners, manufacturers, and retailers for managing the supply chain process effectively
SAP MM or material management helps procurement activity of any company to have full control of materials and inventory management
SAP SD or sales & distribution enables companies to store and manage product-related and customer data to get valuable insights
SAP PP or production planning helps to plan the manufacturing, distribution, and sales of goods by integrating with other SAP modules for better results

Benefits of SAP LBN

The latest cloud-based SAP LBN or Logistics Business Network enables smart work for suppliers, 3PL companies, customers, yard operators, and freight forwarders by connecting them through a centralized platform. There are many benefits of SAP LBN that include.

Improves freight collaboration, material traceability, cargo tracking and provides resilience for the supply chain
Enhances intercompany logistics with valuable insights and excellent collaboration among the stakeholders
Helps for managing logistics transactions with key partners and exchange documents for gaining transparency by providing a central entry point

The above facts and modules will surely convince anyone of SAP’s role in logistics for improving the efficiency of the best 3PL companies like Go Freight Hub.