Transportation Planning

Objective

After completing this lesson, you will be able to outline the transportation planning process

Reasons for Transportation Planning

The goal of SAP TM is to provide customers with the ability to either manually or automatically plan and optimize their transportation requests. This includes the ability to perform order consolidation, where a company can group orders with the same ship-from and ship-to locations for more efficient transportation quantities. If multiple orders are being shipped within a predefined transportation zone, your company can try to efficiently schedule and route the multiple orders, and choose the appropriate carrier. The planning and selection can be determined using the most cost-effective and timely route from source to destination while considering real-world constraints, costs, and penalties. The optimizer makes multimodal decisions such as sea, air, truck, train, and any combination thereof. The SAP TM planning function can also perform multipickup and stop options.

Transportation planning activities in SAP TM can be performed manually and automatically as well as interactively and in the background. For interactive planning, the central planning UI is the transportation cockpit. Both manual and automatic planning activities are performed based on planning strategies (for example, one-step optimization).

Order Consolidation

Order consolidation is the grouping of orders with the same ship-from and ship-to locations to create more efficient shipment quantities.

The result of order consolidation is that one or more freight units are combined into one freight order. A freight unit is a business object representing the smallest possible transportation unit. Business examples of order consolidation are multiple orders that have been received over time and can be shipped together. This can be at individual line item level. Customers who make-to-order, and do not ship complete orders to their customers, can consolidate line items from multiple orders as they are produced and as their delivery-due lists are created.

Routing and Scheduling

The Route, Scheduling, and Carrier Selection process.

The figure outlines the process of routing and scheduling in the following way: a freight unit X is first routed using the transportation planning function, for example, a transportation proposal. Based on this routing, three stages are created for freight unit X, as follows:

  • A stage for U.S. road pickup transport
  • A stage for the ocean voyage
  • A stage for EU road delivery transport

Up to a certain point, these stages are planned independently of each other because different (local) planners are responsible for scheduling each of the three stages. A freight order is created as a result of this stage. Finally, carriers are selected based on specific criteria. This is described as a three-step process but a planner can decide whether to perform planning and carrier selection in two steps or three. It is also possible for the SAP TM optimization function to plan all three steps in one run–this planning strategy is called one-step optimization.

Process Steps

The steps involved in the process, whether one, two, or three steps, can be described as follows:

  • Three step
    1. Determine routing (transportation proposal)
    2. Vehicle scheduling and routing to create a freight order
    3. Carrier selection
  • Two step
    1. Vehicle scheduling and routing to create a freight order
    2. Carrier selection
  • One step

    One-step optimization determines the route and plan, creates a freight order and selects a carrier

Manual and Automatic Transportation Planning

Manual and Automatic Transportation Planning.

Transportation planning activities in SAP TM can be performed manually and automatically, as well as interactively and in the background. For interactive planning, the central planning UI is the transportation cockpit. Both manual and automatic planning activities are performed based on planning strategies (for example, one-step optimization).

Planning Constraints

SAP TM can consider numerous constraints during planning. Which ones are relevant and can be used in a specific scenario largely depends on the scenario itself. Constraints can have physical root causes, such as vehicle capacity or handling capabilities for loading and unloading at certain facilities. On the other hand, constraints can have process-related root causes. For example, a delivery tour can have a maximum of 25 drops in a day. This is a maximum that fits in a driver’s daily schedule, assuming they have to unload at the door and do some paperwork for each customer drop.

Assets, Facilities, Resources, and Times

There are various assets, facilities, resources, and times:

  • Vehicle capacity
  • Vehicle combinations (truck and trailer)
  • Compartments
  • Depot locations
  • Handling resources, opening hours (calendars and shift patterns)
  • Schedules
  • Incompatibilities – constraints by design

Process and Execution Constraints

There are various process and execution constraints:

  • Decreasing capacities
  • Max number of transshipment locations
  • Max limits on distance, duration, or stopovers
  • Pickup and deliver time windows
  • Min and max storage time at hub – cross-docking changeover
  • Loading and unloading durations
  • Scheduling constraints

Freight Orders

The freight order's execution is planned by a carrier or the shipper. The freight order contains the following:

  • When and onto which vehicle freight units are to be loaded
  • Planned departure times for the vehicle
  • Execution data

Freight orders are used for land transportation and freight bookings are used for sea and air transportation. Freight orders contain the following information:

  • Planning information, for example, planned means of transport and stages, routing, planned pickup and delivery dates, durations, and distances

  • Document dependencies, as well as predecessor and successor documents

  • Transportation charges and cost distribution

  • Cargo information: quantities and weights, goods information

  • Execution information

  • Business partner information

  • Output management

  • Status information and blocking information

  • Subcontracting information

Methods/Ways of Creating Freight Orders:

  1. Manually: Manual creation is used when you already know the most important transportation data, such as source location, destination location, and business partner, because you regularly transport goods for a certain customer using a certain carrier.
  2. Work-list: Some of the information, like source and destination location, are automatically populated in the freight order if you create the freight order from the freight unit work-list.
  3. Copying: You can create a freight order by copying an existing one (a reference document). The system copies the header data and the logistical data. However, it does not copy references to freight units and execution information.
  4. FUBR rule: You can create freight orders via the short-cut process based on a freight unit building rule, which will be explained in more detail later in this lesson.
  5. The more advanced features of creating freight orders are their interactive creation in the transportation cockpit, VSR optimization, and the use of transportation proposal functionality. These topics are covered once we have finished the relevant configuration.

A freight order type defines parameters that influence how the system processes the freight order. When manually creating a freight order, the user has to select a freight order type. If freight orders are created during planning and have associated settings in the planning profile, the system determines the freight order type according to the Customizing settings.

A freight order type defines parameters that influence how the system processes the freight order. When manually creating a freight order, the user has to select a freight order type. If freight orders are created during planning and have associated settings in the planning profile, the system determines the freight order type according to the Customizing settings.

  • Number range intervals
  • Basic Settings:
    • Determining shipper and ship-to-party
    • Specifying if a freight order can be subcontracted
    • Defining whether a freight order is to be deleted or only canceled
    • Define subcontracting relevance
    • Define sequence types:
      • Defined and Linear: The sequence of stages is linear, which means that there is a single start stage and all other stages have one predecessor stage. There is also a single end stage and all other stages have one successor stage.
      • Non-Linear (Star-Shaped): All stages have the same start location but different end locations. The graphical structure of the transportation chain has a star shape.
      • Disconnected: All stages are separate from each other and each stage has its own start and end location.
      • Star-Shaped Based on FU Stages: Based on the information from the freight units, the stages have the same start location but different end locations (for example, for parcel freight orders or freight orders for customer pick-up).
      • Star-Shaped Based on FU Stages (Reversed): Based on the information from the freight units, the stages have the same end location but different start locations (for example, for freight orders for customer self-delivery).
      • Linear with (De-) Consolidation Stages: This sequence type contains three parts.
        • In the first part (precarriage), all stages have different start locations but the same end location at which consolidation takes place. The graphical structure of the transportation chain has a star shape.
        • In the second part (main carriage), the sequence of stages is linear.
        • In the third part (on-carriage), all stages have the same start location at which deconsolidation takes place but different end locations. The graphical structure of the transportation chain has a star shape.
      • Undefined: There is no sequence of stages since there are no stages, only locations.
  • Charge Calculation and Settlement Document Settings:
    • Enabling charges and settlement
    • Enable cost distribution

  • Execution Settings: You can define, for example, whether the system is to perform the execution steps within Transportation Management. You can define more conditions that must be fulfilled so that the status Ready for Execution can be set. Moreover, you can define settings for integration with SAP Event Management.

  • Organizational Unit Determination: You can define how the system determines the purchasing organization and the execution organization. The system first checks the Condition field. If you have not entered a condition or if the condition does not return a result, the system checks whether the Consider Organization Unit of User checkbox is selected and whether the user is assigned to a purchasing organization and an execution organization. If the user is not assigned to a purchasing organization and an execution organization, the system uses the data maintained in the Default Org Unit area.

  • Change Controller Settings: You can define settings for the change controller, for example, a default change strategy and a condition for change strategy determination.

  • Output Options: You can define an output profile and a text schema, for example.

Freight Bookings

Freight bookings are used to reserve freight space on a vessel or in an airplane. The corresponding mode-specific freight documents are called ocean freight bookings and air freight bookings. They provide mode-specific information, such as the vessel name or flight number. The space reserved by freight bookings is consumed by assigning freight units or container units to the bookings.

An ocean freight booking represents ocean transportation from a port of loading to a port of discharge, and an air freight booking represents air transportation from an airport of departure to an airport of destination. Freight bookings can cover a consolidation location before the source and deconsolidation location after the port. These consolidation and deconsolidation locations are called container freight stations (CFSs) in the ocean case and gateways for the air case.

Methods/Ways of Creating Freight Bookings:

  • Manually
  • Work-list
  • Copying

A freight order type defines parameters that influence how the system processes the freight bookings.

Freight Booking Types.

The following are a few differences between freight orders and freight bookings:

  • You can create pickup and delivery freight orders for the stages from consolidation location to source (air-) port and from destination (air-) port to deconsolidation location, respectively. The freight booking type can define the pickup freight order type and delivery freight order type.
  • You cannot assign drivers to bookings.
  • Whereas freight orders allow star-shaped, unrelated, and other stage structures, freight bookings allow only sequential stages.
  • Freight orders cover self-delivery and self-pickup scenarios, which are not relevant for freight bookings.

All booking types can be subcontracted, in contrast to freight order types, which can forbid subcontracting to cover transportation businesses fully relying on their own fleets. Although carrier selection and tendering are offered for freight orders, only carrier selection is possible for freight bookings. In most scenarios, the carrier is already known at the time of booking creation.

Learning

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