Topic Covered -

1. Understanding Landed Cost, Shipper, Consignee  

2. Carrier and 3PL Company Roles  

3. Bill of Lading and House Bill  

4. Understanding Inco Terms in Transportation  

5. Container Shipping and Transport Explained  

6. Lightweight Material Box Design Discussion  

7. Exploring Logistics Systems and Partnerships  

8. Transportation Management System Levels Discussed  

9. SAP TM Solution and Deployment  

10. SAP Logistics System Evolution Discussed  

11. Elitra vs TM System Discussion  

12. Logistics Planning and Execution Process

Understanding Landed Cost, Shipper, Consignee

Rohan led a session discussing the terms 'landed cost','shipper', and 'consignee'. The team clarified that 'landed cost' refers to the total cost incurred from the source to the destination, including transportation, handling, and other charges. 'Shipper' was defined as the entity or person sending the goods, while 'consignee' is the recipient. The team also discussed the role of a 'carrier' or 'forwarder' in shipping goods. Rohan used Amazon as an example to illustrate these concepts, emphasizing that the'shipper' is the one who physically sends the goods, not necessarily the seller on the platform. The session ended with a clear understanding of these terms and their implications in logistics.

Carrier and 3PL Company Roles

Rohan clarified the roles of carriers and third-party logistics (3PL) companies in the context of shipping goods. He explained that carriers are the ones who physically move the goods, while 3PL companies provide additional services such as logistics support. He also differentiated between carriers and 3PL companies, stating that carriers are the ones who actually carry the goods, while 3PL companies act as intermediaries between the shipper and the carrier. Rohan further explained that 3PL companies are often preferred by individuals or small businesses due to their reachability and ability to provide better estimates for shipping costs. He also mentioned that some companies, like DHL, have expanded their business into the carrier business. The team agreed on these definitions and roles, with some clarifications provided by Parvez and Suvendu.

Bill of Lading and House Bill

Rohan explained the concept of Bill of Lading (BOL) and House Bill of Lading (HBL) to the team. He clarified that BOL is a legal document containing details of goods being transported, issued by the manufacturer to the carrier. On the other hand, HBL is a receipt issued by the carrier to the shipper, containing details of the goods being transported. He also explained that DHL issues a receipt to the shipper, which is the HBL, and the carrier issues a receipt to DHL, which is the Master Bill of Lading (MBL). The team also discussed the difference between 2PL and 3PL scenarios, with Rohan explaining that in 2PL, the shipper interacts directly with the carrier, while in 3PL, the shipper interacts with a freight forwarder like DHL. The team agreed that the type of document issued depends on the scenario and the entity the shipper is interacting with.

Understanding Inco Terms in Transportation

Rohan explained the concept of Inco Terms, also known as International Commercial Terms, which are used to determine the responsibility and cost of various services involved in transportation. He clarified that these terms are not static and can change based on the services used in a business's transportation system. He also mentioned that these terms are not only used for international shipments but also for domestic and local ones. The team discussed how these terms can vary depending on the buyer and seller, and how they are used in sales orders and forwarding of fed orders.

Container Shipping and Transport Explained

Rohan explained the concept of container shipping, distinguishing between full container load (FCL) and less than container load (LCL) based on the space occupied in a container. He clarified that containers are primarily used for ocean transportation, not land, and are loaded onto ships. Suvendu added that containers can also be used for road transport, specifically in cases where goods are packed and sealed at the factory before being transported to the port. Rohan also introduced the concept of "dry edge," referring to trucking services that move containers within a port location. Sunil asked about the term "ULD" (Unit Load Device), which Rohan explained as lightweight, custom-designed boxes used for air cargo transportation.

Lightweight Material Box Design Discussion

Rohan clarified the design of a lightweight material box, emphasizing that it should not be made of heavy materials like iron. Sunil understood this perspective. The team then took a 10-minute break before resuming their discussion on the next set of terms.

Exploring Logistics Systems and Partnerships

Rohan discussed various logistics systems, starting with the 2 and 3 party logistics (PL) systems. He explained that a 2PL system involves a shipper and a carrier, while a 3PL system involves a shipper, a carrier, and a third party that manages multiple carriers. Rohan also introduced the concept of a 4PL system, which is a non-executing partner that helps improve the efficiency of a supply chain network. He used the example of management consulting firms like BCG and Mckenzie, which provide consultancy services to companies. Lastly, he mentioned the 5PL system, which involves a fifth party, such as a parent company, that provides strategic direction and vision. Rohan used the example of Alphabet, the parent company of Google, to illustrate this point.

Transportation Management System Levels Discussed

Rohan discussed the various levels of transportation management systems (TMS) and their roles in the supply chain. He explained that the 2PL and 3PL levels are primarily focused on executing transportation processes, while the 4PL and 5PL levels are more business-oriented, helping to refine and optimize processes. Rohan also clarified that the 4PL and 5PL levels are not necessarily involved in the actual transportation, but rather in providing expert industry advice and guidance. The team also discussed the potential for a 4PL or 5PL partner to be involved in warehouse management, but Rohan clarified that this would not necessarily be considered a separate partner. The conversation ended with a discussion about the terminology used in TMS, with Sumanth suggesting that 2PL could be considered a shipper scenario and 3PL an LSP scenario.

SAP TM Solution and Deployment

Rohan discussed the various ERP solutions, including SAP, Oracle, Blue Yonder, and Manhattan, and their respective market shares. He emphasized that SAP's TM product is a market leader with a share of over 58% and is not just a generic solution, but requires customization. He also explained that SAP's TM can work as a standalone application and can manage both inbound and outbound systems, providing complete traceability and visibility of orders. Rohan further discussed the two deployment models for TM: on-premise and cloud, with cloud being more cost-effective. He also mentioned the three major cloud providers: Microsoft Azure, Google Cloud Platform, and Amazon Web Services. Parvez asked about the positioning of SAP's TM product, to which Rohan responded that it is a generic solution that needs to be customized to fit the customer's needs.

SAP Logistics System Evolution Discussed

Rohan discussed the evolution of SAP's logistics management system, starting with the Le module, which was later integrated with the Apo module to form the Tm system. He explained that the Tm system initially focused on road transportation but has since expanded to cater to all four transportation modes: road, rail, air, and ocean. Rohan also mentioned that SAP has announced plans to decommission the Le module by 2030, which has led to increased adoption of the Tm system. He further discussed the integration of the Tm system with the Ecc (Enterprise Central Component) and EWM (Extended Warehouse Management) modules, which has fueled the growth of the Tm system. Lastly, Rohan talked about the shift towards the S/4HANA system, which includes the Tm system, and the decision to stop releasing standalone versions of the Tm system in favor of updates in the S/4HANA system.

Elitra vs Tm System Discussion

Rohan and Kumar discussed the differences between the Elitra and Tm systems, with a focus on their respective advantages and disadvantages. Kumar asked about the benefits of using Tm, particularly for companies not currently using Elitra. Rohan explained that Tm is beneficial for companies with their own transportation needs, but not for those outsourcing their logistics. They also discussed the basic core processes of Tm, which include order management, planning, execution, and settlement. Kumar clarified that Tm is not necessary for companies already outsourcing their logistics.

Logistics Planning and Execution Process

Rohan explained the process of planning and execution in logistics, highlighting the role of the planning team in identifying the best mode of transportation and carrier selection. He also discussed the settlement phase, where payments are made to the carrier, and the booking process, which is crucial for international shipments. Rohan clarified that the terms 'decentral hana' and'standalone' are used interchangeably and that the system has the capability to create all necessary data. He also mentioned that the next session would cover more on the integration of the system with other platforms. The team agreed to meet again next week for further discussions.