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Transportation Planning and Shipment Execution Utilizing SAP Standard Functionality with Freight Cost Extension Add-On
Bob King Carlisle Construction Materials Winni Hesel Enowa Consulting

Introductions Company Background Factors influencing Carlisles decision to utilize this functionality Project History Process Flow Configuration & Set-up /Demo Benefits Lessons Learned

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

Carlisle Companies Incorporated Charlotte, NC (CSL)

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

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!!!


Integrated Process Flow

Order Delivery Shipment


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 Transportations knowledge/expertise in SAP lifecycle SAP Transportation Management too complex

participated in development of POC and was CCMs implementation partner along with Cawley Consulting (ABAP)


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


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




Tariff Zones and Assignments


Tariff Zones and Assignments


Routing Guide


Routing Guide (continued)


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


Shipment Cost Procedures - Truckload


Shipment Cost Procedures - LTL


Shipment Cost Procedures LTL (continued)


Multi Dimension -Scaled Condition

Minimum Charge and Rate per Mile Minimum rate will be charged up to the point where the rate/mile >Minimum


Multi Dimension -Scaled Condition


Process Flow Order to Cash

Sales Order 1202619


Automatic Route Determination

Routing Guide using order routing procedure ZROR to determine route


Shipment Cost Estimate - Preferred Carrier

From Sales Order: Extras>Freight Information>Shipment Cost Information


Create Shipment VT01N


Create Shipment VT01N (continued)

Select Deliveries and apply to a shipmentDrop and Drag

Drop and Drag


Create Shipment (continued)


Create Shipment (continued)

Click on overview


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


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.


Create Shipment - Stages

Note: Distance Determination Mileage


Create Shipment Stages (continued)

Highlight Stage and Click Deliveries to view deliveries for that stage


Create Shipment Shipment Cost Information

Click on abacus to display shipment cost total

Drill into magnifying glass to display details


Create Shipment - Tender

Confirmed by Shipper Status automatically faxes/emails a Shipment Tender Confirmation to the carrier


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


Shipment - Deadlines


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


Shipment Cost Document


Drill down capabilities from Shipment cost Document to PO


Carrier Purchase Order


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


Order Level

Document Flow

Shipment Level


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, DSOs and Multi-providers)


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 KPIs to measure results


Key Take-Aways/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 Dont over-engineer - K I S S Tribal Knowledge is not always correct


Questions? ?? Questions??? ??



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