I’m Already Using SAP (other ERP), Do I still need Ritase?

Short answer: can be needed, but it depends on your business needs,
Long answer: would be explained in this article.

When the size of a company increases; in terms of both turnover, expenditures, employees, and income, the digitalization of the company’s operations has become unavoidable.

Like a car that aims to deliver passengers safely and comfortably to their destination, there are hundreds or even thousands of components that support the car’s performance, synchronized with each other so that the car can run to its destination smoothly and comfortably.

The same goes for a company, in which there are many divisions (HR, finance, operations, production, IT, etc) with hundreds or even thousands of employees who must work together to achieve the company’s goals. In general, the larger the scale of a company, then aligning work between divisions will be a challenge in itself. How can the synchronization between tens of divisions, hundreds of people, be implemented properly? We go to:

Use of Entity Resource Planning (ERP)

ERP is a system used to manage and integrate various operational activities in a business/company.

A simple example of the need to use an ERP system:

1. The sales division of a soda drink production company managed to get an order for 100 cartons from a client. This sales order is then recorded/inputted into the sales ERP module.
2. The manufacturing division will need to aggregate this information from the sales team to find out how many cans of soda should be produced, so that the number of products is not short.
3. The logistics & transport division prepares warehouses, makes contact and ensures that transportation vehicles are available, and
4. The finance division prepares invoices to invoice customers, and receives cost invoices from production and logistics

ERP allows the orchestration of information/data between divisions to be carried out as best as possible and minimizes human errors (forgetting, misinformation, employees resigning or new employees’ ignorance, etc).

SAP (Systems Applications and Products in Data Processing), Oracle, Microsoft, and other ERP

SAP is the most popular ERP software product and company in the world. Apart from SAP, there are several other ERP providers commonly used by companies, such as Oracle, with the product name NetSuite, and Microsoft, under the name Microsoft Dynamics. There are also new ERP products like Odoo, which offer alternative ERP with competitive subscription pricing schemes. However, it can be said that SAP is the market leader in the ERP industry.

Just as ERP has many parts/modules, ERP software providers also offer modules in accordance with specific business operational groups. Let’s take the example of SAP, when a company implements SAP, it means they buy and use well-known modules such as:

• FICO (Finance Accounting and Controlling) for finance needs

• HCM (Human Capital Management) for HR

• PP (Production Planning) for production operations

• SD (Sales Distribution) for sales

• etc

So, what is the relationship with Ritase? What does Ritase offer?

Transportation Management (TM)

One thing that often escapes the management’s attention is transportation management.

If you are a company engaged in the production of goods or distribution, whether FMCG, oil & gas, energy, construction, manufacturing, or garment, then the logistics & transportation division is always categorized as a cost center (the division allocating costs).

As a cost center, regardless of whether your company owns vehicle assets (trucks) for distribution of its own products or uses vendors (trucks/third party services), the good and modern logistics division’s performance is measured by how efficient the costs allocated are.

Therefore, an ERP module that can be used to manage all logistics operations in a company is needed, and Ritase offers a comprehensive TM (Transportation Management) solution.

What are the features of Ritase TM needed to achieve the goal of a company’s logistics division, namely cost efficiency?

1. Load Planning

• Route Optimization
• Multimodal
• Transporter/Carrier Management

2. Freight Execution

• Booking
• Tendering

3. Track & Trace

• Status Updates

4. Payment Management

• Settlement
• Auditing
• Billing

5. Reporting

• Tracking KPI
• Analytics

6. Other supporting feature(s)

The following questions will arise:

Okay, I understand about ERP and TM now. But do I need Transportation Management (TM)?

Again it depends on the scale and priorities of your company.

Managing dispatches using 5 trucks per day is certainly different from managing 50, or even 500 dispatch trucks per day.

Based on our experience and data, if your dispatch is less than 12 trucks per day, then what you need is to find an economical transport. You can use the Ritase marketplace to find trucks for your needs at competitive prices.

If your company manages and requires more than 12 dispatch trucks/carrier per day, it would be wise to consider using TM.

Especially if your logistics division works in multi shifts (more than 8 working hours/day), involves several employees, and has several other divisions (Sales, Finance, Operations), then investing in a good TM module will provide the best return in the long run.

In addition to the direct costs associated with paying vendors’ freight costs (tolls, gasoline, TKBM — loading and unloading labor), think about indirect costs, which may exceed direct costs, such as:

• detention & demurrage charges due to mismanagement of transportation/truck dispatch timing — the track and trace feature will help.
• routing & load optimization relying on the “old-timer”. You will be in trouble if this key person gets sick, retires, or resigns. Moreover, are you sure that your truck routing and selection has been optimal so far? — the load planning feature is useful for dealing with this.
• ongoing vendor management. Dependence on one vendor will result in locked prices tending to rise; having multiple vendors will also be difficult to control who gets which route, especially if performance is measured manually based on human feelings — Freight execution features, namely the booking and tendering process, have a solution for this.
• Accessorial charges. There are other fees besides initial fees that need to be managed. How to distinguish mandatory accessory charges from “invisible” costs? — The payment management feature can help.

Hmm, now I believe I need TM. But why use Ritase products? Why not just use SAP/Oracle/Microsoft/other brands?

There are 2 main things you can consider

1. Cost VS Value

Talking about costs, below are some screenshots of implementation costs from the SAP & Oracle ERP brand.

The cost of the SAP TM module is almost equivalent to the cost of implementing other popular standard SAP modules combined.

And here’s the TM product from the Oracle E-business Suite:

How about Ritase? Ritase TM can be used with the basic pricing tier starting from 15 million rupiah per month.

Why are the costs so different? Could it be that an apples to apples comparison is not applied to the product (perhaps the TM Ritase module is inferior to similar products)? In Ritase, we believe that:

• Price is what you pay, value is what you get. We are committed to provide a minimum value of 10 x the price/cost that we apply. Evidence of implementation results and transportation cost efficiency from Ritase’s clients that are multinational FMCG companies and public companies can be seen from the previous article.

• Ritase is the latest TM provider in the era of technology 2.0 (since 2017) that doesn’t get caught up in the innovator’s dilemma (we don’t need to match the pricing tier of predecessors’ popular products so that previous products don’t look “too expensive”)

2. Implementation

TM is a new module. SAP just released this module in 2017 in stand-alone mode (separate from SAP’s main modules). Therefore, even now consultants/system integrators who have the experience and capability to implement TM modules especially in Indonesia are still very rare.

I have implemented ERP, but not for TM. How is the integration if using Ritase, which, nota bene, is a different brand?

First of all, congratulations! You have made your decision, and luckily it’s the right one.

Ritase TM is compatible with other ERP product modules, in which data exchange can be conducted using various methods; API, EDI, text/csv via ftp server, etc.

In addition, Ritase’s engineering tech & service excellence team will ensure that implementation can run seamlessly, up to the change management of users/stakeholders in your company.

So in conclusion, do I need Ritase or not?

All back to the needs and priorities of each company. If you are a decision maker or a member of the logistics & transportation division who has a vision of moving forward, is ready to face the challenges of the continuation of the company (new normal, for example: the covid-19 pandemic forces employees to WFH, or even work from everywhere, we never know what special conditions will arise in the future). We in Ritase continue to develop a ready-to-use Ritase platform that answers all your company’s logistics operational digitization needs.

Conclusion:

Back to the parable of the car previously presented. The automotive world continues to move forward, not standing still. Now, cars with alternative fuels (electricity, hydrogen, etc.) that are more environmentally friendly, with increasingly sophisticated autonomous driving technology, have been developed, so that repetitive tasks such as driving are reduced. The world will never be the same again.

The choice of whether you will continue to use horses for transportation, or fossil fuel-powered cars, or start adopting electric cars, all depends on your decision. Regulation may be late, but global competition won’t be waiting for you.

Need consultation? Head over to our email saas@ritase.com.