Transportation is an essential element in the logistics chain. It affects both incoming and outgoing goods. Effective transportation planning and processing ensure that shipments are dispatched without delay and arrive on schedule. Transportation costs play an essential role in the calculation of the price of a product. It is important to keep these transportation costs to a minimum so that the price of a product remains competitive. Efficient transportation planning and processing helps to keep these costs down.

As illustrated in the following graphic, you can use the SAP transportation functions to plan and process:

• Incoming shipments in Materials Management based on purchase orders and shipping notifications

• Outbound shipments in Sales and Distribution based on sales orders and deliveries

The graphic below illustrates this process:

Transportation planning and processing is based on the shipment document. This document facilitates the flow of information from the shipper to the customer and to any service agents who are involved in the business transaction.

The transportation component includes basic transportation processing functions:

• Transportation planning and shipment completion

• Shipment costs calculation

• Shipment costs settlement

• Shipment costs calculation for individual customers

• Billing of customer freight

• Service agent selection
• Management of means of transport and utilities
• Follow-up and supervision of shipments
• Management of shipment costs

These transportation functions can handle planning and processing for both inbound and outbound shipments. You can control and monitor the entire transportation process from the planning stage to goods issue at your shipping point (for outbound shipments) or vendor location (for inbound shipments), through to goods receipt at the customer location or your plant.

Other available functions include: shipment costs calculation and settlement with the service agent, transfer to accounting, credit memo creation and invoice verification.