A quick comparison of the SAP solutions for Global Trade
In today’s globalized economy, efficient management of international trade operations is paramount for businesses seeking to maintain a competitive edge.
In this article, we will explore and compare three key SAP solutions aimed at facilitating Global Trade. No surprise here… their short names or acronyms start with GT: SAP Business Network Global Track and Trace (SAP GTT), SAP Global Trade Management (SAP GTM), and SAP Global Trade Services (SAP GTS).
SAP GTT – SAP Business Network Global Track and Trace
SAP GTT represents a cloud-only product within the SAP ecosystem, forming an integral part of the SAP Business Network. We can say it is the improved cloud version of SAP EM (Event Management) regarding process tracking.
SAP GTT is a specialized tracking tool, offering real-time visibility insights into both inbound and outbound shipments. Its primary objective is to enhance performance and customer satisfaction through predictive monitoring of shipment milestones and exception alerts for any delays and impacts to customers or production. In case of exceptions, automated actions can be triggered by events.
Outbound Shipments:
For outbound shipments, the process is tracked within SAP systems, starting from the initial stages of the transportation journey until the transport company picks up the goods after leaving the premises.
From the other side of the coin, if your company is a vendor for customers (and they subscribe to SAP GTT), sharing information with the system enables them to view details until the goods are picked up at your factory or facility.
From then on, the carriers and freight forwarders must have a way to inform SAP GTT of the events that occur thereafter until the goods are physically delivered, very much like when you send a parcel through the mail with a confirmation receipt.
Inbound Shipments:
For inbound shipments, since the shipping and transportation data are not in your SAP Systems (except for buyer-managed transports) as a buyer or customer, there is a reliance on vendors, carriers, and freight forwarders to provide shipping information. Examples include the ASN from the vendor and transport milestones from the carriers and freight forwarders.
There is also integration of SAP GTT with SAP Transportation Management (SAP TM), that allows for seamless synchronization between GTT’s goods tracking information and TM’s transportation management processes. This enables a holistic, real-time view of the supply chain from dispatch to final delivery, facilitating more informed and agile decision-making throughout the transportation operation.
In a nutshell, SAP GTT offers real-time tracking and location updates for both incoming and outgoing goods. However, it does not handle tasks related to compliance, trade preference, or customs processes. These tasks include activities such as categorizing goods according to the Harmonized Tariff Schedule (HTS) for different countries, submitting customs import/export declarations, coordinating with customs brokers regarding these declarations, or calculating duties and fees.
Please note that the effectiveness of SAP GTT’s tracking rely heavily on accurate data provided by vendors, carriers and freight forwarders, and there must be an assurance from their side and from SAP that such information will be available before you subscribe to the service.
Official links for SAP GTT:
- Product Page: You can find detailed information about SAP GTT on its official product page.
- SAP Help: Please note that access to SAP Help may require SAP user credentials.
SAP GTM – SAP Global Trade Management
SAP GTM is a cross-industry solution (not a product) supporting logistics trading and part of the S/4 HANA suite. The main users of Global Trade Management are consumer product companies that buy and sell products but do not produce them.
By means of a trading contract, it links essential data related to purchasing, sales, and accounting, providing detailed insight into each transaction from purchase order through delivery until the receipts of goods and settlements. In terms of its modular structure, GTM occupies a central position between Sales and Distribution (SD) and Materials Management (MM).
SAP Global Trade Management consists of four different main functionalities:
- Trading Contract (T/C)
- Trading Execution Workbench (TEW)
- Trading Expenses
- Position Management
As with SAP GTT, SAP GTM does not support foreign trade processes, such as compliance management, trade preference management or customs management. Instead, it focuses on managing trading contracts and integrating sales and procurement data.
Official links for SAP GTT:
- SAP Help: Please note that access to SAP Help may require SAP user credentials.
SAP GTS – SAP Global Trade Services
SAP Global Trade Services (SAP GTS) is a product that helps companies better manage global trade operations, ensures ongoing trade compliance, and optimizes the cross-border supply chain.
From an architectural perspective, GTS operates independently from the SAP ERP system (such as SAP S/4HANA or SAP ECC), residing in a separate instance known as a “Feeder System.”
SAP GTS evolved from the former SD-FT foreign trade functionality, and it communicates natively with one or multiple SAP ERP Feeder systems.
SAP GTS’ first version was released more than 20 years ago, so it is a very mature product with multiple releases under its belt.
The latest iteration, SAP GTS Edition for SAP HANA 2023, is built on the Fiori platform, offering enhanced user experience, embedded analytics, and leveraging the SAP HANA database for improved performance and efficiency.
SAP GTS Modules:
SAP GTS is divided into 3 different modules, each designed to address specific aspects of trade compliance and regulation:
1. Compliance Management
The Compliance Management module encompasses various functionalities aimed at facilitating compliance with legal requirements and mitigating associated risks.
- Sanctioned Party List Screening (SPL): This process involves checking all business partners and documents against known lists of sanctioned or restricted parties to identify potential risks associated with prohibited entities.
- Embargo management: This functionality scrutinizes business partners and documents against specific lists of countries or regions subject to trade embargoes, helping to mitigate the risk of engaging in prohibited transactions inadvertently.
- Export Legal Control: This feature verifies export documents against a predefined list of controlled goods, software, or technology. It helps businesses ensure compliance with export regulations by verifying the presence of necessary licenses for controlled items.
2. Customs Management
When it comes to managing customs processes in the realm of global trade, the Customs Management offers a comprehensive suite of functionalities.
- Product Classification: SAP GTS simplifies product classification according to various countries’ Harmonized Tariff Schedules (HTS), ensuring compliance and smooth customs procedures.
- Import/Export Handling: This feature automates import/export processes, from documentation creation to declaration filing, reducing administrative burdens and ensuring compliance with customs regulations.
- Special Customs Procedures: SAP GTS supports special customs procedures like Foreign Trade Zones (FTZ), Inward and Outward Processing Relief (IPR and OPR), and Bonded Warehouses. These procedures facilitate trade operations by offering tax and duty benefits.
3. Trade Preference Management
The Trade Preference Management module is vital for global trade, streamlining sales, production, and procurement processes while taking advantage of trade agreements and ensuring compliance. Key features include:
- Request and Manage Vendor Declarations: This functionality improves communication with suppliers and ensures that necessary certificates of origin are submitted accurately and promptly by vendors.
- Calculate Product Origin and Preference Eligibility: This feature enables organizations to maximize benefits under preferential trade agreements while maintaining compliance with relevant regulations. Rules of origin are obtained from authorized data providers, which allows automating the time-consuming and prone-error process of calculating the origin of finished products with complex bills of materials (BOMs).
- Generate Declarations for Customers: It allows businesses to generate declarations of origin for customers, providing essential documentation to support claims of preferential treatment. This functionality enhances transparency in transactions with customers and contributes to building stronger business relationships.
In brief, SAP GTS is a comprehensive solution that fully supports foreign trade processes providing a wide range of services related to global supply chain processes, such as facilitating customs clearance, compliance, export control, leveraging trade agreements and more.
Official links to SAP GTS:
- Product Page: You can find detailed information about SAP GTS on its official product page.
- SAP Help: Please note that access to SAP Help may require SAP user credentials.
Let us summarize:
- SAP GTT is a business network application to get visibility of where the inbound and outbound goods are.
- SAP GTM assists you in creating the connection between sales and purchasing that is required in a trading environment.
- SAP GTS helps you manage the complexities of international trade related to regulatory compliance, communication with customs authorities, and mitigate risk related to preferential origin.
Conclusion
SAP offers a diverse array of solutions tailored to meet the evolving needs of businesses engaged in global trade. While SAP GTT focuses on real-time tracking and visibility, SAP GTM facilitates the management of trading contracts, and SAP GTS provides comprehensive support for foreign trade processes, including compliance management and customs clearance.
By leveraging these solutions, businesses can streamline their global trade operations, mitigate risks, and enhance overall efficiency in today’s dynamic marketplace.
