Bimal Subhakumar & Akshat Kumar

02/03/2021

Novigo's SAP LBN InstaFreight Connection Demo for Broadcast Tendering & Self Billing

SAP Logistics Business Network (LBN) is a digital supply chain platform that brings together different supply chain players for easy freight collaboration. Shippers, Carriers, Logistics Service Providers (LSPs), Visibility Providers, Digital Freight Forwarders, or Carrier Networks can easily connect through the SAP LBN and collaborate to match demand-supply effectively, enhance goods tracking, and material traceability.

InstaFreight is a leading digital logistics company for over-the-road transport in Europe. As a ‘digital carrier network-connected’ to the SAP LBN for freight collaboration, it provides instant pricing in the region. The integration of InstaFreight with SAP Transportation Management via SAP LBN allows seamless management of the road shipments in Europe. The integration reduces complexities and administrative effort involved in freight collaboration for both shippers and carriers. Through this integration, the users of SAP LBN gain access to more than 12000 carriers via InstaFreight.

In any transportation process, a shipper aims to reduce the freight cost. However, it is difficult to determine which is cheaper, a spot rate or a contracted rate. Firstly, rates vary from lane to lane, and market conditions immensely affect them too. Secondly, contracted carriers are not obligated to accept the load. With SAP TM and LBN, we can now compare the spot price with the contracted rate and select the best carrier based on business rules.

What did we do?

In the Novigo test landscape, we connected Novigo S/4HANA TM with LBN. The shipper and carrier tenants in LBN allow shippers and carriers to see the freight collaboration results in real-time.

  • We invited two Novigo test carriers to access LBN using the 'Discover Business Partners' application in Novigo’s LBN shipper tenant.
  • The carriers that were invited accepted the invitations in Novigo’s LBN carrier tenant and completed the connection.
  • From the Novigo shipper tenant, we also sent the invite to the InstaFreight test tenant. InstaFreight manages the LBN InstaFreight tenant, which is connected to the InstaFreight test system.
  • Once they received the invite and accepted Novigo's request for collaboration, the connection with the InstaFreight LBN test system was completed.

Watch the SAP Logistic Business Network (LBN) InstaFreight Connection Demo


The Demo Details

We showcased a price discovery scenario in this demo where we broadcasted the load tender for three carriers. InstaFreight, which does not have a contracted rate in the TM system, instantaneously provides the spot rate. For other carriers (Menath and CTS Spedition), there is a contracted rate maintained in TM freight agreements. The tendering profile and visibility settings were such that the rate is not negotiable for these two carriers.

  • Orders were created and planned in S/4HANA embedded to create full-truck freight order.
  • Using the tendering profile and visibility settings, these orders were tendered to 3 carriers via standard XML messages to LBN.
  • InstaFreight instantly responds with a quote from their test system via LBN, and these quotes are received in S/4HANA TM. At the same time, the other two carriers accept the load without editing the contracted rate.
  • The responses are received from all three carriers for both spot and contracted rates. We compared the information and selected the best cost carrier, InstaFreight.
  • We sent the award information message to LBN and updated the charges in the TM freight order. Once the InstaFreight carrier confirms the order, the confirmation message is also received in TM.
  • Demo Process Flow- Broadcast Tendering for Price Discovery

  • For the spot amount provided by InstaFreight, we processed the freight settlement through the self-billing or Evaluated Receipt Settlement (ERS) option. First, the freight settlement document is posted for accruing the costs, which creates a service purchase order and service entry sheet. Since this is a self-billing scenario, we do not expect an invoice from the carrier. Hence, we used the transaction code MRRL and created the invoice document directly, which is also visible in the SAP TM freight order document flow. The amount in the Invoice document is the same as the quoted amount responded by InstaFreight, and this document can be used to release the payment.

Conclusion

By bringing together different supply chain partners, SAP LBN is leveraging digital supply chain capabilities and innovations. With a growing need for digitization, real-time pricing & insights, along with real-time statuses such as those provided by InstaFreight, help companies gain a competitive advantage. The standard connection of the S/4HANA TM system with the InstaFreight system via LBN allows all the SAP customers to benefit significantly from this integration.

Novigo, with more than 50 successful SAP TM on-premise implementations, is the leader and the most experienced consulting firm in this domain. Our consultants are well equipped to advise clients about the various aspects of LBN and instant pricing through digital freight forwarders such as Insta Freight. We anticipate that many companies will need these advanced functionalities in LBN with the growing need for digitization in the industry. Novigo can help you embrace the digital future with carefully tailored solutions to address all the logistics challenges. To know more get in touch with us.