Defining Planning Processes

Transportation planning supports multiple variants. Several scenarios can be used, depending upon shipping requirements, as follows:

• Truckload shipments (FTL or LTL)

• Intermodal (IM)

• Direct shipments

• Multi-stop shipments

• Pooled distribution

Truckload shipments tend to be the simplest of the outbound planning scenarios. The transportation order received by the shipper is in a full truck load quantity, typically >= 35,000 lb, or 3,660 cubic feet, or 28 - 32 pallets. The shipment is from one source to one destination, so very little route planning is necessary, except for carrier selection. The ideal situation would be one product, but multiple line items can be supported. In TM, when orders are entered with a weight greater than 35,000 lb, the system can be set up to automatically plan, tender, and cost the freight order without additional user intervention. This is considered a one-step process.

Full Truck Load (FTL): In some industries, goods are ordered and delivered based on full truck load because that is an inexpensive option. Typically, this is used for cheap products where the transport costs are high compared to the value of the goods. This FTL scenario is also used extensively in bulk transport. If the order is for multi-line items, TM can perform truck load optimization planning for freight units. During planning, companies can perform carrier restrictions (a carrier is not permitted). Additionally, companies can perform carrier selection based on lowest costs if a default carrier is not maintained. Once planning is done, the transportation order is ready for tendering. Finally, bills of lading can be created with driver notes when the shipment is picked up.

Intermodal freight transport involves the transportation of freight in a container or vehicle that can use multiple modes of transportation (rail, ship, and truck) without any handling of the freight itself when changing modes. This method reduces cargo handling, improving security, reducing damages and losses, and allowing freight to be transported faster. This method reduces costs compared with road transport and is the key advantage when deployed for intracontinental use. However, the cost savings may be offset by reduced timing for road transport over shorter distances.

Intermodal transport is generally used for two purposes. One is to move goods relatively cheaply over long distances using ocean and rail transport. The second is moving goods over long distances quickly, for example, with air freight. Based on the requested delivery date, the carrier selection process determines whether to use intermodal or truck load as the means of transport. This is based on the transit time for each means of transport: intermodal container on flat car (COFC) with a four-day transit period or TL with a three-day transit period.

Multi-stop or pool shipment consolidates two or more orders into one or more shipments. Instead of making several (say 5) shipments and sending a separate vehicle to each customer, your company plans to have only one vehicle visit each customer. This is a truck load (TL) process, requiring some planning to ensure no constraints are violated. Be aware that in-transit stops are limited, usually three or fewer. As transportation volumes increase, optimized multi-stop planning improves operational efficiencies. Routes can be determined by pick-up and delivery windows at both shipping and receiving locations.

Pooled distribution is prevalent in delivery/distribution scenarios, from distribution centers to customers. In the postal industry, it is also used to deliver mail to post offices or large customers and institutions. In general, this scenario also includes the collection of empty returnable packaging from customer sites.

When companies begin to transport goods across borders, the complexity of the logistics increases. Multiple modes of transportation may be needed depending on how the product gets to its destination. In addition, you have to consider the legal requirements necessary to import and export products to other countries.

The standard planning process begins with creating freight units.

Planning relies on three distinct pillars, as follows:

• Master Data

  Master data objects such as the transportation network (locations, transshipment hierarchies, transportation zones, transportation zone hierarchies and transportation lanes) and resources are the basis for any planning activities in SAP TM.

• Selection Profiles

  Selection profiles specify what should be planned in a particular scenario. For example, selection settings specify the geography for which a transportation plan shall be created. This could be, for example, all freight units to be transported within California.

• Planning Profiles

  Planning profiles specify the "how" of the process. For example, a planner may only be allowed to schedule standard trucks and not a helicopter for emergency transports. This information dictates how the actual transportation is to be carried out. Which resources can be used, and at what cost is specified in the planning settings?

Once created, freight units are used by manual or automatic planning activities to build freight orders, which can subsequently be used for carrier selection and/or tendering processes. The purpose of the short-cut process is to skip any planning activities because these may not be required in certain scenarios. For example, if the sales orders that a company receives already state the required truck size, the freight order could be created directly from the transportation demand (in this example, a sale order). Technically, this is done during freight unit building by selecting a freight order type instead of a freight unit type.

Watch the simulation Compare the Standard and Shortcut Process to learn more about the standard and short cut process flow.

In a company’s planning department, geography is often used to allocate planning responsibility.  For example, an individual or team might be responsible for a specific plant, distribution center, or group of customers in a geographical area.  The geographical selection attributes in the selection profile allow the team to limit their view so that they only see FUs or FOs for which they have responsibility. 

You define the demand horizon in the time-related selection attributes that you assign to your selection profile. You can define a demand horizon for pickup and a demand horizon for delivery. The system chooses all freight units and freight orders whose pick-up date/time or delivery date/time lies within the relevant demand horizon.

You do not have to use selection profiles, typically pre-defined, to select objects for planning. Suppose you need to plan on the fly without a selection profile. In that case, you can also choose freight units from a worklist or use the second entry screen of the transportation cockpit to define selection criteria. These selection criteria do not only include freight unit(s) (stages) but allow you to select other documents (like container units and freight orders) as well as capacities (like vehicle resources or schedules) and configuration (like the planning profile and page layout).

• Profile and layout sets are used in several apps:
  • Transportation Cockpit
  • Carrier Selection
  • Delivery Builder
• Profile and layout sets define
  • Data to read (for example, freight units)
  • Settings (for example, planning profiles)
  • Page layouts

The profile and layout set (PLS) management applications enable an administrator to centrally create and manage PLSs for a team or organization and assign users to them. This approach simplifies working with PLSs by removing the need for individual users to create and maintain their own. When an administrator creates a PLS and assigns a user, the PLS is available for the user to select on the relevant application start screen.

When creating a PLS, the following recommendations should be considered:

• Transportation cockpit:

  You are recommended to enter a selection profile for freight units and a planning profile to which you have already assigned a selection profile for freight orders and freight bookings.

  Optionally, you can also specify incompatibility settings and settings for capacity selection. If you have already assigned incompatibility settings or settings for capacity selection to the specified planning profile, the system overwrites these settings with the settings you specified here.

  The system considers the profiles you specify in your PLS for all planning options available in the transportation cockpit.

  Note

  In the transportation cockpit, the user can use the Change Planning Settings function to temporarily change the planning and load planning settings in the selection profiles. The system discards these changes when you leave the transportation cockpit or change the profile selection.

• Carrier selection:

  You are recommended to enter a selection profile for freight orders, freight bookings, and carrier selection settings.

• Creating delivery proposals:

  You are recommended to enter a selection profile for freight units, freight orders, freight bookings, and a delivery profile.

Watch the simulation How to Select Data for Planning to learn more about the different selection options and profile and layout sets.

The figure, Routing, Planning and Carrier Selection, outlines the complete planning process: a freight unit X is first routed using, for example, a transportation proposal. Based on this routing, three stages are created for freight unit X, as follows:

• 10 - A stage for US road pick-up transport
• 20 - A stage for the ocean voyage
• 30 - A stage for EU road delivery transport

Up to a certain point, these stages are planned independently because different (local) planners may be responsible for scheduling each stage. 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.

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

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

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

Manual creation is generally used when you know the most important transportation data, such as source location, destination location, and business partner. You regularly transport goods for a certain customer using a certain carrier.

To manually create a freight order, you require the following information: general data for the freight order (shipper, consignee, carrier, resource, locations, dates and times, and terms of payment), information about any additional intermediate stops, the items involved (add freight units to the freight order or enter the items directly on the freight order), and information about the charges involved (as calculated or configure the system to calculate charges). Once the required information has been entered, you can check the consistency and save the freight order. The freight order can then be sent to the carrier and confirmed or rejected on behalf of the carrier. Necessary documents can be printed, and a freight settlement document is created after the execution. Some information, like source and destination location, is automatically populated in the freight order if you create the freight order from the freight unit worklist.

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.

Finally, 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.

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.

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

Planning profiles are used to influence and control the outcome of the planning process.  A planning profile must be specified for a background optimizer run and interactive planning in the transportation cockpit. A planning profile is relevant for scheduling actions performed in the freight order. Several settings can/must be created for use in the planning profile. 

The planning profile includes settings to control the different steps of the optimization.  These steps are controlled by strategies set up in Customizing.  SAP delivers standard strategies – but unique strategies can be created.  The strategies are made up of various programs.  If you wish to perform manual planning or a scheduled planning run, there is a standard strategy for each.  You also specify in the planning profile which type of checks will take place concerning incompatibilities, dangerous goods, and so on.​

You can assign the following settings and profiles to a planning profile:

• Capacity selection settings:

  Here, you choose the required capacities, such as resources. If you use resources for which you have defined an ADR limit, VSR optimization considers the number of ADR points for this resource during the optimization run. Moreover, you can specify that resources for which you have set a planning block are not displayed in the resource lists of the transportation cockpit.

• Capacity availability settings:

  Here, you can restrict the availability of resources and equipment types. Using the rules you define here, the system determines when specific resources or equipment types are available based on shift sequences and factory calendars.

• Capacity document creation settings:

  The capacity document creation settings define which document types are used with this planning profile and which requirement grouping profile should be applied.

• Optimizer settings:

  Here, you can define the optimizer runtime, the maximum number of transshipment locations and processes, and the freight order building rule, for example. You also specify whether you require rough or detailed information for your planning activities, define the necessary process controller strategy, and configure the settings for generating transportation proposals.

  In the advanced settings, you can also specify whether the main aim of your transportation proposals is to ensure the lowest transportation costs or the shortest transportation duration possible. You can also define preferences about your relative weighting of the variance of carriers, routes, and departure dates or activate or deactivate capacity constraints at the transportation mode level. You can also specify whether the system is to ignore specific settings, such as the capacity or ADR limit of a resource during VSR optimization.

• Load planning settings:

  Here, you can define the optimizer runtime, the planning strategy, and various rules for load planning. For example, you can define the maximum height difference between stacks in a row.

• Constraints and costs settings:

  Here, you define costs related to freight units and means of transport. In most cases, these costs are not actual costs. They offer a means of controlling the result of the optimization run (for example, earliness costs and lateness costs).

• Incompatibility settings:

  Here, you define settings for your incompatibilities.

• Carrier selection settings:

  Here, you specify whether the system uses transportation allocations or business shares, for example.

• Manual planning settings:

  Here, you specify how you want the system to behave when it assigns documents and resources:

  • Assignment of documents:

    You use these settings to control how the system assigns one or more requirement documents to a capacity document.

  • Removal of the assignment of documents:

    You use this setting to control how the system removes the assignment of requirement documents to capacity documents.

  • Assignment of resources and creation of documents:

    You use these settings to control how the system assigns resources to documents and how it creates and assigns reference documents.

• Scheduling settings:

  Here, you define loading and unloading durations for scheduling, for example.

• Unified package building settings:

  The unified package building profile relevant to the late package building process is defined here, among others.

• Transportation cockpit settings:

  These settings define some of the behaviour of the transportation cockpit.

Watch the simulation Use Planning Profiles to learn more about planning profiles.