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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[

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[

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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
• Order
• Delivery
Logistics • Shipment

• Shipment Cost Document

• Automatic Creation of Carrier PO
Costing/Revenue
• Customer Billing

• Invoice Receipt - Carrier

• Payment to Carrier
A/P Cycle

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[ 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)

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

Drop and Drag

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[ 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

Drill into magnifying glass to display details

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[ 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

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Questions?
??
Questions???
??
THANK YOU FOR PARTICIPATING.

SESSION CODE: 0208

Learn more year-round at www.asug.com

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