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Overview of the manage freight and transportation business process area and benefits of support

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Applies to: Dynamics 365 Finance, Dynamics 365 Supply Chain Management, Microsoft Supply Chain Center

This article describes the Manage freight and transportation business process area. It describes the process flow of this area and explains the benefits of using Dynamics 365 to support this process area.

The Manage freight and transportation business process area encompasses the activities that are done in an organization's transportation management process. All distribution organizations must be able to track and manage transportation costs and operations so that they can optimize this critical part of the supply chain. Meeting this goal requires cross-organization collaboration among departments such as Logistics, Procurement, Planning, Sales, and Operations.

The exact process for the Manage freight and transportation area varies from business to business and depends on the industry. However, the basic steps are the same: The need for transportation is identified. Identification of this need triggers planning activities, including operations for rating and routing. Dock appointments can then be scheduled for pickup and/or delivery, and necessary logistics paperwork can be generated. After transportation is completed, freight invoices can be processed and reconciled against estimates. The definition of these steps is done as part of the Inventory to deliver end-to-end business processes and refined in the Define and manage warehouse operations business process area.

It's essential that you define and establish the business process for Managing freight and transportation when you first begin to implement Dynamics 365 Supply Chain Management. This process is a fundamental element for any distribution company, because it forms the backbone of efficient supply chain operations.

Stakeholders

Many people across the organization should contribute to the decision-making process and the design of the Manage freight and transportation area. The list includes but isn't limited to the following roles:

  • Inventory stakeholders – Examples: Warehouse manager and Transportation planner
  • Operations stakeholders – Examples: Chief Operating Officer (COO), Vice President (VP) of Operations, and Operations Manager
  • Costing stakeholders – Examples: Cost accountant and Controller

Manage freight and transportation process flow

The following diagram shows the high-level flow of the Manage freight and transportation business process area.

Each solid gray rectangle on the diagram represents an end-to-end business process. The solid blue rectangle represents the business process area. The diagram shows the subprocesses for the business process area. The arrows on the diagram show the flow of the business process in an organization. If a subprocess can lead to more than one other subprocess, the parallel subprocesses are shown as branches.

Diagram that shows business process relationships with upstream and downstream processes that are explained in the next paragraphs.

The following steps are illustrated in the Manage freight and transportation business process flow diagram.

  1. Start

  2. A parallel branch from the Inventory to deliver end-to-end business process includes:

    1. Define and manage warehouse operations

      1. A parallel branch to Process inbound goods and Process outbound goods

    2. Control vendor managed inventory and consignment inventory

  3. Manage freight and transportation

    1. Plan transportation loads

    2. Decision point: Is routing required?

      1. If yes, Route transportation loads
      2. If no, decision point

    3. Decision point: Is rating required?

      1. If yes, Rate transportation loads
      2. If no, decision point

    4. Decision point: Is dock management required?

      1. If yes, Schedule dock appointments

      2. If no, Print shipping documentation

        1. End

    5. Process freight invoice

    6. Reconcile freight

  4. Manage inventory costs

    1. A parallel branch to Record and control costs and the Record to report end-to-end business process

  5. End

Benefits

This section outlines the key benefits that organizations can use to monitor and measure the success of implementing technology to support this business process area.

Reduced transportation costs

Organizations can use Dynamics 365 Supply Chain Management to maintain freight carrier contact rates. They can search for the lowest costs, even across multiple modes of transport for a specific route. Other transportation management capabilities help increase the use of load capacity. In return, organizations can reduce their costs by minimizing the number of shipments that are required. Organization can also use freight reconciliation to track and approve discrepancies between their estimates and carrier invoices.

Improved operational efficiency

Transportation is integrated with other business processes in Dynamics 365 Supply Chain Management. Warehouse managers can schedule dock appointments for events and deciding factors such as the following list:

  • Carrier pickup and/or drop-off
  • Bay door vacancy
  • Anticipated loading times
  • Availability of equipment

This integration helps minimize driver wait time, mitigate potential fees for delays, and ensure that warehouse operations don't become bottlenecks in the overall supply chain.

Optimized fulfillment strategies

Dynamics 365 Supply Chain Management has transportation rating and routing capabilities. Similarly, Intelligent Order Management provides order orchestration capabilities that extend beyond the distribution warehouse. It connects multiple supply chain providers, from manufacturers to retailers to logistics companies. Therefore, organizations can optimize their fulfillment operations, and this optimization then leads to faster delivery and increased customer satisfaction.

Next steps

If you want to implement Dynamics 365 solutions to assist with your manage freight and transportation business processes, you can use the following resources and steps to learn more. (Links are added, when the articles are ready.)

  1. Define and manage warehouse operations
  2. Maintain inventory levels
  3. Manage inventory quality
  4. Manage freight and transportation (the article that you're currently reading)
  5. Record and manage inventory costs
  6. Analyze warehouse operations

You can use the following resources to learn more about the Manage freight and transportation business process area in Dynamics 365.

Contributors

This article is maintained by Microsoft. It was originally written by the following contributors.

Principal author:

Other contributors:

  • Weijie Sa | Dynamics 365 SCM Product Manager