‘Professional Shipping’ section of the SAP S/4 HANA Supply Chain for Transportation Management (embedded TM) includes those functionalities which were not available in SAP LE-TRA (Logistics Execution - Transportation). Since professional shipping requires additional license cost, it is necessary to understand the additional business processes in transportation, that can be designed using professional shipping functionalities. In my previous blog, event driven charge calculation was discussed. In this article, cubing-out/weighting-out issue during transportation is addressed.
Transportation of goods usually happens in transportation resource such as container, trailer, railcar etc. The maximum capacity of these transportation resources is usually specified in volume or weight. While loading the product, when transportation resource reaches its volumetric capacity before reaching the permitted weight limit, it is called cubing-out issue. Similarly, when a transportation resource has reached its weight limit, before reaching the volumetric capacity, is called weighting-out scenario. Cubing-out is very common in land and ocean mode of transport, where low density materials are moved via truck or container. Weighting-out usually happens when we transport high density materials such as iron one, coal, copper, lumber etc… In both these scenarios, there are chances that, we will not be able to load the transportation resource as planned (if planning does not consider both weight and volume). Some of the negative business impacts are:
Carrier may cancel the shipment during pick-up
Sending partial quantities to customer, which may lead to customer dissatisfaction
Discrepancy in customer billing and carrier invoice
Unplanned inventory in plant
Tracking and tracing of left out quantity
Documentation issues related to export declaration, bill of lading etc…
As transportation planners build orders with customers, they gain experience and will have a rough estimate of the quantity of the product that can fit inside a transportation resource (truck/trailer/railcar/container). But when a shipper transports the products, with a product line of several hundred SKUs in a variety of dimensions via FTL/FCL, it is hard to calculate how much product will fill the transportation resource. So, relying on the planner’s skill and experience is not a scalable solution and is not the ideal way to solve the issue. This should be technology driven and planners should be able to design/configure/maintain the software based on their experience.
Solving the cube case study (Feb 2008) in ‘Inbound Logistics’ can give more details about the real-life scenario of this issue. In 2008, SAP (LE-TRA module) didn’t have the full functionality to solve the above issue. Hence, customers used to rely on integration to 3rd party products. However, from SAP TM 9.1 onward (released in 2012-13), we have various options to solve this issue efficiently. The latest releases (TM 9.6 / S/4 HANA 1809) have advanced functionalities and can cater to complex requirements in this area. Hence, for shippers, if the core back end ERP is SAP, then it is advisable to use SAP Transportation Management (TM) for resolving these issues - because of its tight integration, better performance and advanced functionalities.
In S/4 HANA embedded TM, we can use Freight Unit Building Rule (FUBR) to split the order (SO/STO/PO/Delivery) quantity and create freight units. In FUBR, we can maintain the max volume and max weight of the vehicle/container/railcar as the split quantity. When S/4 HANA embedded TM receives an order above the max weight or max volume, then it creates multiple freight units, and which can be separately planned into various shipments/freight orders.
For example, if we maintain 25000 LB and 100 FT3 as split quantity in FUBR and the sales order quantity is 30000 LB / 50 FT3, two FUs will be created. One with 25000 LB and another with 5000 LB. Similarly, if the sales order quantity is 20000 LB and 110 FT3, it will create one FU with 100 FT3 and another with 10 FT3. These FUs can be planned separately in 2 different FOs and separate transportation resources can be assigned to each of these documents. Once the planning is complete, multiple deliveries can be created from TM via delivery proposals based on number of freight orders/transportation resources.
Note:It is not necessary that the split quality has to be always the exact vehicle capacity. Based on business requirement and scenario, this can be finalized.
In embedded TM basic shipping, only delivery-based FU building is available. Hence, even if we split the delivery quantity into multiple FUs they cannot be planned in separate shipments/freight orders. Sending one delivery in multiple transportation resources/shipments is not a recommended design. Hence, delivery split functionality (not yet released for 1809 – refer note 2663403 for updates/details) may be required. Else we may have to split the delivery in ECC/S/4 while creating delivery from an order, which usually requires some enhancement. However, in embedded TM professional shipping, we have order-based FU building and this issue is not present. Delivery is created from the FOs after planning and multiple deliveries can be created as per the scenario.
There are advanced requirements and other challenges which hinder the loading of the transportation resource (truck/trailer/railcar/container) as per the plan. Some of these are:
1. FUBR determination
In projects, we may require different FUBRs with different split quantity as per the business scenarios. Region, service level, packaging, availability of truck capacities, material master data, customer specifications etc… may decide the FUBR to be used for an order. In professional shipping functionality of embedded TM, we can use conditions to determine the correct FUBR for various scenarios. This functionality helps to accurately and realistically plan the transportation resource for different scenarios.
2. Packaging of products
In many scenarios, we may require the packaging information to determine how much of the products can fit into a transportation resource. Weight and volume of the product alone may not be sufficient. We have package builder functionality in embedded TM professional shipping, to cater to these requirements. Same functionality can be used in S/4 HANA EWM too.
In the latest S/4 HANA 1809 release, we have advanced ‘Mixed Package Building’ with ‘Package Builder Optimizer’, which can plan packages/pallets with multiple customer orders and products.
3. Load planning
In certain scenarios, various stacking and loading rules have to be considered, to finalize the quantity of product, which can fit into a transportation resource. For example, if the products are delicate and pallets cannot be stacked, then even if the truck has not reached the volumetric capacity or weight limit, we may not be able to load the truck to full capacity. In such situations too, we may have most of the negative business impacts mentioned above. In professional shipping, we have load planning functionality which cater to these requirements. Load planning helps to finalize the appropriate location for each package/pallet on the transportation resource considering various constraints such as dimensions, stacking factors, loading sequence, maximum weight on each axle, etc
Another common scenario in transportation process, which can lead to the inability to load the transportation resource fully, as planned, is the incompatibility criteria. There are products which cannot be loaded together. For example, it is not ideal to load gasoline with explosives, even if the stacking factors, packing parameters and truck capacity permits it. Similarly, it is not ideal to load ice-cream cartons in a non-refrigerated truck. In professional shipping, we define these business rules as incompatibilities, which will be considered during planning to get a realistic transportation plan.
In addition to this, there can be much more advanced requirements in transportation process. For example, in order to achieve both high volume and weight utilization of the truck, we may have to combine high density and low-density products. Some of these products can be even from some other manufacturer/shipper. For example, high truck utilization can be obtained if a tissue paper manufacturer can consolidate products/orders of nearby television manufacturers, in the transportation resource (Horizontal Supply Chain Collaboration). Similarly, there can be requirements of perform load planning at various stops during the milk run. Even though these functionalities are not fully available in the current version of the SAP TM, the product is constantly evolving to incorporate various business requirements. In case SAP decides to develop solutions for these kind of advanced requirements, then these new functionalities will be available only in professional shipping functionality of SAP TM. SAP S/4 HANA embedded TM is the future architecture and these functionalities are not available in LE-TRA (SAP Logistics Execution – Transportation).
Considering all these, professional shipping, is an important part in achieving efficient transportation process for shippers/manufacturers with high freight volume and variation of products. So, it is better to analyse professional shipping functionalities, while considering S/4 HANA Supply Chain for Transportation Management implementation.