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 Carlisles decision to utilize this functionality Project History Process Flow Configuration & Set-up /Demo Benefits Lessons Learned
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
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!!!
[
Logistics
Costing/Revenue
A/P Cycle
participated in development of POC and was CCMs implementation partner along with Cawley Consulting (ABAP)
10
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
11
12
Routes
13
14
15
Routing Guide
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Shipment Completion
Post Goods Issue Executes Fax, Email, EDI Shipment notifications
37
Shipment - Deadlines
38
39
(continued)
40
41
Customer Billing
Freight Cost Allocated totaling $1511.96 to each invoice (33.26 + 1478.70)
42
[
Order Level
Document Flow
Shipment Level
43
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)
44
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
45
46
Questions? ?? Questions??? ??