Many of our clients and other interested parties deal with optimizations in various processes within their supply chain on a daily basis. In this respect, a wide range of products, suppliers and corresponding distribution channels is available to help potential customers find appropriate solutions for their requirements. Once the product has been finalized, the same demand arises in the environment of B2B business relationships as a result of today’s “Next Day Delivery” mentality:
Deliveries that are fast and, best of all, cost-effective!
Aggravating factors in the area of delivery speed and efficiency include the currently prevailing shortage of skilled personnel as well as the social - but also the political - demand for compliance with new sustainability targets. This blog post aims to discover for you how Körber, together with the best-in-class product SAP TM, enable the basis of transport optimization to compensate for a lack of personnel resources and, in addition, to supply your customers in a way that is as CO2-efficient as possible.
To allow a better understanding of the corresponding factors that optimize SAP TM, I would first like to present an example of a transportation planning process to highlight the optimization cases in a simplified way.
Transportation requirements can arise from three different needs:
- Outgoing delivery of customers’ orders
- Incoming deliveries arising from orders
- Stock transfers between storage locations
Every one of these transport processes often contains different product types, each in various quantities. These must be consolidated according to defined specifications and possibilities in order to determine a load carrier for the corresponding freight units. In SAP User Language, a freight unit corresponds to a grouping of goods that is the smallest unit needing to be transported.
After it becomes clear, in the physical packing process, which products need to be shipped on which load carrier, the specific tour takes place, i.e. a transport optimized by SAP TM in terms of sequence. For this purpose the freight units, already systematically consolidated, are manually distributed between transport capacities or among transport vehicles, e.g. trucks, and geographically coordinated with each other based on the vehicle approach stops on which the ultimate freight requirement or transport to be operationally executed is justified.
Because we already know, at this point in the transport movement that is to be carried out, which goods will be picked up where and on which load carrier, and subsequently delivered, selection of the best carrier or the company’s own truck fleet, and the corresponding scheduling, take place in the final planning step in order to deliver to customers at the right time.
A modern transport planning process
These few lines describe a modern, partially-automated transport planning process based on the standard in SAP TM. This compact description is all that is needed, since all the process stages are supported by using established SAP optimization algorithms, and the automation of many activities can be undertaken by the transport management tool.
We have been able to gain experience in numerous projects, starting with the Package Builder and the Vehicle Scheduling and Routing Optimizer (VSR), and extending all the way to Vehicle Space Optimization (VSO) and selection of the best carrier. Here we are talking about references such as our long-term partners BSH & Rehau, together with an internationally active pharmaceutical group and an innovative coating systems manufacturer, among others.
The Package Builder is suitable for optimally grouping single packages within a freight unit. For example, among other things, the result shows how many Euro-pallets are required to ship 500 finished products. The approach that follows varies from one use case to another, and is subject to the requirements of your customers and/or to your target in the optimization. Whether vehicle capacity or the route, including time scheduling, should be in the foreground first, must be worked out together with you in the project.
Receiving goods as quickly a possible
Depending on the customer’s wishes and interests, the aim may be to receive the goods as quickly as possible, which, however, makes it unlikely that the transport vehicle’s capacity will be fully utilized due to quantities not being achieved. An added factor is that any effort to fully utilize cargo space and thus save resources and costs may result in longer delivery times due to a lack of orders. Depending on the desired outcome, both optimization scenarios can be combined together based on prioritization, the level of detail and the respective perfection.
It is not uncommon for our customers still to be carrying out their processes manually on a sheet of paper, which is why the transparency and efficiency currently required within transport logistics is lacking. One optimization case is never the same as another and must be individually tested and evaluated from one use case to the next.
Together with you, we will gladly meet your challenges, look at the processes you are already using and support you in the introduction of SAP TM to develop your supply chain towards the position you want to occupy tomorrow!