0208 Transportation Planning and Shipment Execution Utilizing SAP Standard Function-ality With Freight Cost Extension Add On

[ Transportation Planning and Shipment Execution Utilizing

SAP Standard Functionality with Freight Cost Extension

Add-On

Bob King – Carlisle Construction Materials

Winni Hesel – Enowa Consulting

[ Agenda

Introductions

Company Background

Factors influencing Carlisle’s decision to utilize this

functionality

Project History

Process Flow

Configuration & Set-up /Demo

Benefits

Lessons Learned

2

[ Key Learning Points

Understanding standard shipment functionality of ECC 6.0

Benefits of SAP Railcar Management/Freight Cost

Extension

Visibility of Freight Costs throughout the revenue cycle

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[ Carlisle Companies Incorporated

Charlotte, NC

(CSL)

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[ WHY???

Freight Costs represent the second largest corporate expense just

behind the purchase of raw materials for manufacturing

Reduce Freight Costs through informed decisions

Visibility of Freight Cost Estimate at the time of order entry

Visibility of Freight Costs throughout the entire process flow in

SAP

Automatic selection of the Low Cost Preferred Carrier at Shipment

Planning

Elimination of an outsourced freight payment and audit service

Elimination of ~ 100,000 manual freight charge entries/year

Profitability Analysis of sales at an individual shipment level as far

down as the individual material in that shipment

Operational efficiency improvements

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[ Project History/Timeline

October 2008 – Evaluated different SAP solutions

Standard Shipment Functionality with SAP Railcar Management and

Freight Cost Extension

December 2008 - Presented prototype to Management

Deferred due to other business requirements

December 2010 – Received Management approval to proceed

January 2011 - Implementation partners Enowa and Cawley Consulting

(ABAP) selected

May 2011 – Project Team selected and blueprinting started

“Big Bang” approach

9 business segments, 24 shipping points, 7 customer service

locations in US and Canada

October 2011- Project Team started full-time

April 2012 – GO LIVE!!!

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[ Integrated Process Flow

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Logistics

• Order

• Delivery

• Shipment

Costing/Revenue

• Shipment Cost Document

• Automatic Creation of Carrier PO

• Customer Billing

A/P Cycle

• Invoice Receipt - Carrier

• Payment to Carrier

[ Why Railcar Management and FCX ?

Ability to utilize a Distance Determination Service to calculate mileage

to be used in rate calculations

ALK Technologies (PCMILER)

SMC3 (LTL)

Automated Carrier Selection based on different criteria

Preferred Carrier

Low Cost Preferred

Freight Cost Estimates

AD Hoc, Delivery, Shipment

CCM Transportation’s knowledge/expertise in SAP lifecycle

SAP Transportation Management too complex

participated in development of POC and was

CCM’s implementation partner along with Cawley

Consulting (ABAP)

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[ Getting Started

Blueprinting is key to understanding the business

processes

Carriers and Lanes Serviced by those carriers

Understand your Carrier Rate Structures

Incoterms and their impact in the entire process

Development of Shipping Conditions, Shipping types,

Shipment Types, Special Processing indicators

Shipment cost calculations

Customer billing of freight costs

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[ Configuration and Set-up

MASTER DATA>MASTER DATA>MASTER DATA

New Concept for Carlisle : “Route is a Carrier”

Developed new routes with lead times – from 20 to 2300

Development of Tariff Zones

Went from 75 transportation zones to 850 tariff zones assigned to 219

certain combinations of Transportation Planning Points, Shipping Types,

Countries

Zip Code Assignments within Tariff zones

Development of Routing Guide

Development of shipment cost procedures and strategies

Order

Shipment

Utilizes SAP condition technique and access sequences

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[ Routes

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[ Tariff Zones and Assignments

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[ Tariff Zones and Assignments

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[ Routing Guide

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[ Routing Guide (continued)

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[ Freight Rate/Shipment Cost Structure

Rate/Mile

Mileage Bands

Rate/Mile in conjunction with minimums

Spot Quotes

LTL with weight breaks and alternation

Fuel Surcharges

Hazardous Materials Charges

Stop off Charges

Assessorial Charges

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[ Shipment Cost Procedures - Truckload

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[ Shipment Cost Procedures - LTL

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[ Shipment Cost Procedures – LTL (continued)

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[ Multi Dimension -Scaled Condition

Minimum Charge and Rate per Mile – Minimum rate will be

charged up to the point where the rate/mile >Minimum

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[ Multi Dimension -Scaled Condition

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[ Process Flow – Order to Cash

Sales Order 1202619

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[ Automatic Route Determination

Routing Guide using order routing procedure ZROR to

determine route

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[ Shipment Cost Estimate - Preferred Carrier

From Sales Order: Extras>Freight Information>Shipment

Cost Information

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[ Create Shipment – VT01N

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[ Create Shipment – VT01N (continued)

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Drop and Drag

Select Deliveries and apply to a shipment…”Drop and Drag”

[ Create Shipment (continued)

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[ Create Shipment (continued)

Click on overview

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[ Create Shipment (continued)

Click on “Planning” to plan shipment

System will execute routing guide to propose low cost carrier

Note Routing Guide Pop-up is a customized screen

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[ Create Shipment (continued)

Displays all carriers in the routing guide in ascending order by calculated

shipment cost

Gives the dispatcher the option to select a carrier other than low cost by

double-clicking on the route.

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[ Create Shipment - Stages

Note: Distance Determination Mileage

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[ Create Shipment – Stages (continued)

Highlight Stage and Click “Deliveries” to view deliveries

for that stage

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[ Create Shipment – Shipment Cost Information

Click on abacus to display shipment cost total

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Drill into magnifying glass to display details

[ Create Shipment - Tender

“Confirmed by Shipper” Status automatically faxes/emails a Shipment Tender

Confirmation to the carrier

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[ Create Shipment - Deadlines

Loading Start, Loading End and Shipment Completion

status set by communication from scanners used in

loading trucks

Use of configured Activity Profiles automatically issues

documents or completes processes via T-Code VT70

Load Complete

Printing of Shipping Documents - Packing List and Bills of

Lading

Shipment Completion

Post Goods Issue

Executes Fax, Email, EDI Shipment notifications

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[ Shipment - Deadlines

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[ Create Shipment Cost Document

In our environment this is a requirement prior to billing since the costs

transfer to the billing pricing procedure for further processing. (T-code

VI01for on-line processing). Automatically posts to a service PO for the

Carrier

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[ Shipment Cost Document (continued)

Drill down capabilities from Shipment cost Document to PO

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[ Carrier Purchase Order

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[ Customer Billing

Freight Cost Allocated totaling $1511.96 to each invoice (33.26 + 1478.70)

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[ Document Flow

Order Level

Shipment Level

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Return on Investment

Freight Cost Reduction – 2013 Goal was a 1% freight reduction. Currently

ahead of target. On track for a 2% freight cost savings

Efficiency Gains

Elimination of 100,000 manual entries

Eliminated redundant processes

Standardized process for obtaining and maintaining Carrier Rates

Everything in SAP – Visibility throughout the entire process

Freight Cost and Profitability Analytics

BI (Standard as well as customized Sales, Shipment, Shipment cost and

COPA Cubes, DSO’s and Multi-providers)

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Best Practices

Establish a Master Data Team to manage the master data requirements of

Freight Rates, Tariff Zones, Routing Guides, Routes, etc.

Standardize processes (delivery, shipment, freight costs, customer freight

billings)

Inco-Terms play a key role – Make sure Customer Service understands the

impact of Inco-Terms

You must have active Customer Service involvement on the project team

Develop KPI’s to measure results

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Key Take-Away’s/Lessons Learned

Developing/understanding the Tariff Zones and your freight rate structures is

key

Do not under estimate the quantity, value and complexity of master data.

The visibility of freight costs at all levels will result in more cost effective

choices without sacrificing service

Standard SAP Shipment Functionality offers the ability to manually optimize

carriers and service areas

New analytics become available relating to shipment costs in one system to

manage the business better and more efficiently

Know the needs and wants of your customer – Don’t over-engineer - “K I S S”

“Tribal Knowledge” is not always correct

Questions???

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Questions?

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THANK YOU FOR PARTICIPATING.

SESSION CODE: 0208

Learn more year-round at www.asug.com

Robert.king@carlisleccm.com Winni.hesel@enowa.com