[ Transportation Planning and Shipment Execution Utilizing SAP Standard Functionality with Freight Cost Extension Add-On Bob King – Carlisle Construction Materials Winni Hesel – Enowa Consulting
Feb 08, 2016
[ 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
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[ 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?
??
THANK YOU FOR PARTICIPATING.
SESSION CODE: 0208
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