Why a process platform is the future for your logistics

Michael Roelli

Michael Roelli

From fragmented IT to holistic Process-as-a-Service platform.

The supply chains of companies and the system technical mapping of their processes have often grown historically. This is due to the fact that the processes have been adapted and expanded over the years. However, the digitalization of these processes has hardly been incorporated and the process-related mapping in IT solutions was or is often only tackled as a second step. For this reason, we usually find a rather traditional approach at our customers, which requires different systems to map a process.

Traditional approach to IT infrastructures

Frequently found initial situation of our customers:

Different applications from different providers

No integration of planning, execution and billing

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Lack of overall transparency

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No integration, interconnection only partial via interfaces

Elaborate manual workarounds, procedural gaps

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Technological heterogeneity, difficult operability, and dependence on the manufacturer

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A lot of in-house development in SAP Z, which is only insufficiently documented

It is not uncommon for a wide variety of applications from different providers to be used in both inbound and outbound operations. For example, we often see that a solution is used in inbound for collaboration with suppliers and the associated notification, followed by another in the area of supply control and yard management as well as in the area of track & trace. It may also be the case that sub-processes are mapped via e-mail, spreadsheet processing, fax and telephone.

In outbound, different solutions are also used for transport management, dock appointment scheduling and yard management, container management, track & trace, and freight cost billing and accounting. For this purpose, different applications from different providers are used in some places in inbound and outbound for the same processes, since the departments are organizationally separate and can make their own IT decisions.

As a result, the processes cannot be mapped integratively, there is no uniform system network available – and if there is integration, many interfaces have to be maintained. This in turn results in an encapsulated mapping between the planning, execution and billing of processes, which can lead to ambiguities even within the own company.

Transparency-enhancing systems that monitor external process steps and report targeted feedback at the right time to the right process document are more common than they were just a few years ago – but the lack of integration into the overall process means that manual effort is still almost always required to make this information usable.

What fragmentation and the end of the SAP Business ­ Suite mean for IT

On the IT side, this leads to more difficult operability, since different technologies are used that must be maintained and mastered. Likewise, thousands of lines of code were written in the SAP ERP in the past and missing functionalities were developed in-house. Here we find mostly good solutions that are adapted to the company, but which are not sufficiently documented and have not been further developed over the years to adapt to new circumstances. Some of the developers may have already left the company, which means that it is precisely these Z-transactions that are difficult to maintain.  

In addition, the SAP Business Suite will be discontinued at the end of 2027. The associated migration to S/4HANA means that the Logistics Execution System (LES) with its Warehouse Management (WM) and Transport (TRA) submodules will be eliminated. The standard document used today by many companies for internal and external communication, the Shipment (Transport), will no longer be available in SAP S/4HANA by 2030 at the latest when the usage rights cease. This means that any interfaces or communication via EDI with process partners will have to be set up again, which will lead to enormous effort. 

High transformation pressure for specialist departments

The specialist departments are currently under particular transformation pressure. Among other things, the topic of sustainability, combined with the Supply Chain Act, is forcing companies to rethink their supply chains and find more sustainable ways to map processes. Furthermore, there has been a trend in supply logistics for some time now for purchasing and logistics to move closer together in order to digitalize the inbound process holistically and to increase supply chain resilience in order to be able to act more agilely on the market. For example, the topic of risk management is coming into focus. This involves concepts that make it possible to react to possible disruptions at an early stage, to flexibly change sources of supply, carriers and routes, and to synchronize the warehouse and production accordingly so that the end customer experiences a high level of service. This inevitably leads to the creation of supply networks and continuous integration into core processes

In the inbound process, this means integrating the supplier network in such a way that the inventory system is coupled, automatically reports safety stocks and suggests possible sources of supply based on risk factors. There is also a trend for companies outside the automotive sector to bring the organization of the inbound process in-house. This means that transport planning must take place integrated in the system network on the basis of feedback from suppliers, so that packaging information or the possible pick-up date are available for transport planning. The process partners such as supplier and carrier demand different communication channels based on their digital maturity levels. All relevant information – whether via web, e-mail or electronic connection – is required at the leading digital document so that further information that arises can be updated along the process.

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Example of the inbound process

In outbound, the focus is increasingly on saving costs, minimizing the number of transports, and making the best possible use of the purchased transport. Here, too, the issue of sustainability is of great importance. Whereas in the past the focus was often on regional forwarders and regular transports – according to the motto: “Take what’s at the ramp”, today the trend is that transport logistics as a discipline is becoming more and more centralized within companies. As a result, transports are to be planned and executed across different transport modes throughout the company. It can also be observed that companies are currently starting projects in which inbound and outbound are combined, optimized tours are planned by themselves and only FTL (full truck loads) are purchased. The goal of this is to save costs and deliver more sustainably.

However, the trend also means that follow-up processes must not only be better planned, but also executed. Time slot management that takes warehouse capacities into account and dynamically calculates the loading processes in terms of time, followed by integrated supply control based on real-time data, is elementary in order to process the trucks as quickly as possible and transport the individual deliveries together. This also includes a fully comprehensive yard management system that proactively detects the inflow, reports bottlenecks in the yard in good time and coherently controls the activities along the loading process. The contactless registration and handling of the truck, including the digital mapping of transport-relevant documents, is increasingly in demand. Not to be forgotten, but already standard in the meantime, is transparency in the direction of the consignee.

Process-as-a-Service: how a digital process platform harmonizes inbound and outbound

System discontinuities and non-integrative sub-processes automatically lead to increased manual effort in the system, but also in communication. With an integrated process platform, on the other hand, the relevant information is available at all times. For example, a planned transport including its contents is available in time slot management. The carrier can enter further information relevant for check-in, loading and delivery. This is available along the entire process and can be extended with activities, time stamps and additional information. These may be important for billing and are then automatically available.

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Example of the outbound process

As seen in the examples, processes require a variety of activities that provide for different process participants.

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System approach of leogistics GmbH

A remedy for these diverse challenges for the supply chains and transport management of the future is a holistic digital Process-as-a-Service platform such as myleo / dsc from leogistics GmbH. The cloud software allows the complete mapping of all collaborative as well as operative transport and site logistics processes in inbound and outbound – and does so highly integrated in SAP via predefined interfaces.

With the help of a system network of SAP products and myleo / dsc, a high degree of automation in the digitalization of processes is made possible. Through direct integration into SAP documents, myleo / dsc can link logistical objects with process and business data, thus creating maximum transparency in our customers’ supply chains. Combined with our SAP expertise, we can implement this in the most resource-efficient way for our customers.

The public cloud approach reduces the number of different technologies that IT has to maintain, allowing IT to focus on its core tasks. It also eliminates the need to develop and maintain electronic interfaces to process partners, as this can be handled on different communication paths via myleo / dsc. The specialist department has the advantage of working in a clearly structured system network and reducing manual activities and communication, acting more agilely in the supply chain and thus noticeably improving delivery reliability in inbound and outbound.

We are here for You!

Are you also facing the challenge of implementing a holistic, digital solution? We would be happy to support you, just get in touch.

If you have any questions about this or other topics in this blog, please contact blog@leogistics.com

Michael Rölli
Co-Head of Product and Solution Management

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