Transportation Lanes in SAP TM and SAP APO - PDF - V2.0 - Paresh Bhagwatkar

© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission

Paresh Bhagwatkar

Transportation Lanes in TM and APO

Version 2.0

Paresh Bhagwatkar

Content

� Transportation lane overview� Transportation lane design� Carrier cost and priorities

Paresh Bhagwatkar

Lane Overview

Somerset, NJ

PA1PA2

Paresh Bhagwatkarc

Paresh Bhagwatkar

Structure of Transportation Lane

Shipping Point US01 > PA1

TL

LTL

Std. Bulk Truck

SNBO

QLTY

SVTN

Lane Header

Means of Transport (MOT)

Carrier

Paresh Bhagwatkar

© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission

Paresh Bhagwatkar

Transportation Lane Design

Paresh Bhagwatkar

Paresh Bhagwatkar

Key lane design considerations

� Lane granularity� Transportation zone design

• Regional zones

• Grouping of shipping points in zones

� MOT granularity� Carrier selection parameters

Paresh Bhagwatkar

Granularity of Lanes

Point-to-Point

Point-to-Point

Point-to-Point

Point-to-Point

Zone-Zone

Point-to-Zone

Point-to-Zone

Type

SPFPT1 > PLT1PlantShipping point

US-FRPT > US-PA1

CustomerShipping Site (zone)

SPFPT1 > C12345CustomerShipping point

ExampleDestinationOrigin

US-FRPT > PLT1PlantShipping Site (zone)

US-TX1 > US-PA1Transportation Zone

Transportation Zone

US-FRPT > US-USAPA1

Transportation Zone

Shipping Site (zone)

SPFPT1 > US-PA1Transportation Zone

Shipping point

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Paresh Bhagwatkar

Lanes from a Site and Shipping Point(s)

Plant 1

Plant 2

Plant 3

Site Freeport, TX

Plant 4

Customer or Zone

Point-Zone

Zone-Zone

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Paresh Bhagwatkar

Key Points

� Zone Assignment• In TM zone is determined in TM (using postal code, zone, etc)

• In APO - Zone is assigned in the customer address from ERP

� In addition to lane selection and lane granularity, compatibilities and incompatibilities also come into play

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Paresh Bhagwatkar

Sequence of Lane Search

CustomerShipping pointPoint-to-Point1

CustomerShipping Site (zone)

Point-to-Point2

5

4

3

Sequence DestinationOriginType

Transportation Zone

Transportation Zone

Zone-Zone

Transportation Zone

Shipping Site (zone)

Point-to-Zone

Transportation Zone

Shipping point Point-to-Zone

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Paresh Bhagwatkar

Lane Overview

Somerset, NJ

Zone NJ

Zone PA1

Zone PA2

Cust 1Cust 2

Cust 3

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Paresh Bhagwatkar

Best Practices for Lane Definition

� Point-Point Lanes• Usage

- High volume between certain plants/ points- Carriers give discount on a point to point basis based on volume or other reason

• Considerations- More data maintenance

� Point-Zone Lanes• Usage

- Customers strewn across region- No specific customer has especially high volume- No appreciable discounts on point-point basis

• Considerations - Lower data maintenance

� Zone-Zone Lanes• Usage

- Good to have as catch all in case lanes are missing- Customers with very sporadic orders may not warrant maintaining lane from Point to

Zone- Some companies may be able to rely totally on zone-zone lanes

Paresh Bhagwatkar

© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission

Paresh Bhagwatkar

Carrier Cost and Priorities

Paresh Bhagwatkar

Paresh Bhagwatkar

Carrier Cost and Priority

� Carrier selection can be based on various combinations of cost and priority

� Carrier selection strategy• Maintained on MOT level of lane

• Drives which combination of cost and priority is used

� Carrier level of lane has• Cost

• Priority

� Cost• Costs maintained on lane

• Costs retrieved from ERP system

• Costs calculated in TM

� Priority

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Paresh Bhagwatkar

Used as a tie-breaker when carriers tie at cost

System gets cost for each carrierPriority is mathematically added to costResulting number is used for sorting in increasing order

Cost + Priority

Used when service is much more important than cost.Priority is used as a magnifier of differences in cost.

System gets cost for each carrierCost and priority are mathematically multipliedResulting number is used for sorting in increasing order

Cost * Priority

Used when service is most important and cost is not a consideration

Carriers from lane ranked in increasing order of priority (Priority 1 being high)

Priority (only)

Used when lowest cost carrier is desired

Carriers from lane ranked in increasing order of cost

Cost (only)

No real applicable scenarioCarriers from lane ranked in the order of maintenance of lane

Neither Cost Nor Priority

UsageSystem BehaviorCarrier Selection Strategy (on MOT level)

Carrier Selection Strategy and System Behavior

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Paresh Bhagwatkar

$10002Swift

$12001Celadon Trucking

$10004CH Robinson

$11003Schneider National

Cost Determined During TSP Selection

Priority on laneCarrier

Swift4

3

2

1

Rank

Celadon Trucking

CH Robinson

Schneider National

Carrier

Lane Data

TSP Selection Result

TSP Selection Strategy - Neither Cost Nor Priority

Paresh Bhagwatkar

$10002Swift

$12001Celadon Trucking

$10004CH Robinson

$11003Schneider National

Cost Determined During TSP Selection

Priority on laneCarrier

$1200

$1100

$1000

$1000

Calculation Result (Cost)

Celadon Trucking

Schneider National

Swift

CH Robinson

Carrier

4

3

2

1

Rank

Comes after CHR because of the order of maintenance in the lane

Summary

Lane Data

TSP Selection Result

TSP Selection Strategy - Cost (only)

Paresh Bhagwatkar

$10002Swift

$12001Celadon Trucking

$10004CH Robinson

$11003Schneider National

Cost Determined During TSP Selection

Priority on laneCarrier

CH Robinson44

3

2

1

Rank

Schneider National3

Swift2

Celadon Trucking1

CarrierCalculation Result (Priority)

Lane Data

TSP Selection Result

TSP Selection Strategy - Priority (only)

Paresh Bhagwatkar

$1000

$1200

$1000

$1100

Cost Determined During TSP Selection

10022Swift

12011Celadon Trucking

10044CH Robinson

11033Schneider National

Cost + PriorityPriority on lane

Carrier

Celadon Trucking

Schneider National

CH Robinson

Swift

Carrier

12014

3

2

1

Rank

1103

Priority used as tiebreaker1004

Priority used as tiebreaker1002

CommentCalculation Result (C+P)

Lane Data

TSP Selection Result

TSP Selection Strategy – Cost + Priority

Paresh Bhagwatkar

$1000

$1200

$1000

$1100

Cost Determined During TSP Selection

20002Swift

12001Celadon Trucking

40004CH Robinson

33003Schneider National

Cost * PriorityPriority on lane

Carrier

CH Robinson

Schneider

Swift

Celadon

Carrier

Though CHR is low cost they come last40004

3

2

1

Rank

3300

Swift comes second though they are lowest cost

2000

1200

CommentCalculation Result (C+P)

Lane Data

TSP Selection Result

TSP Selection Strategy – Cost Times Priority

Paresh Bhagwatkar

Other “tweaks”

� Cost + Priority – Spacing out priorities• Possible to space out priority so that effect of priority is more for closely

costed carriers

• Use when small cost differences should take less effect on TSP selection

� Priority Only – Maintaining in steps• Priorities maintained in steps of 10, 20, 50 or 100

• Use when there is an anticipation that later another carrier may be placed between two existing carriers in the “gap”

Paresh Bhagwatkar

$1010

$1200

$1000

$1100

Cost Determined During TSP Selection

1210200Swift

1300100Celadon Trucking

1400400CH Robinson

1400300Schneider National

Cost * PriorityPriority on lane

Carrier

CH Robinson

Schneider

Celadon

Swift

Carrier

14004

3

2

1

Rank

1400

1300

Swift costed marginally more than CHR. If priorities were maintained in steps of 1 CHR would have been chosen

1210

CommentCalculation Result (C+P)

Lane Data

TSP Selection Result

Tweak: Cost + Priority – Spacing Out Priorities

Exaggerated Example

Paresh Bhagwatkar

Contact

� Paresh Bhagwatkar• [email protected]• 973-495-9913

� This document may be used without any permission, but, with attribution in whole or part, with or without changes, and for any commercial or non-commercial purpose (under the creative commons “CC by 3.0” license)