Transportation Lanes in SAP TM and SAP APO - PDF - V2.0 - Paresh Bhagwatkar
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***Comments Appreciated*** This presentation gives an overview of transportation lanes in SAP TM and SAP TPVS (the functionality is very similar in those products). It talks about the concept of the transportation lanes, the levels at which data exists, and the granularity of transportation lanes along with guidelines on deciding the granularity. Also, it goes into different carrier selection strategies and how priority and cost interact. This presentation does not go into the priorities for broadcast tendering (which is functionality in SAP TM 8.0 and onwards). That will come in update version 3.0.
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Transportation Lanes in SAP TM and SAP APO - PDF - V2.0 - Paresh Bhagwatkar
- 1. Transportation Lanes in TM and APO Version 2.0 Paresh Bhagwatkar © Paresh Bhagwatkar, 2011 May be used in whole or part with attribution and without permission
- 2. Content Transportation lane overview Transportation lane design Carrier cost and priorities Paresh Bhagwatkar
- 3. Lane Overview PA2 PA1 Somerset, NJ Paresh Bhagwatkar Paresh Bhagwatkarc
- 4. Structure of Transportation Lane Shipping Point US01 > PA1 Lane Header TL Means of Transport LTL (MOT) Std. Bulk Truck SNBO Carrier QLTY SVTNParesh Bhagwatkar Paresh Bhagwatkar
- 5. Transportation Lane Design Paresh Bhagwatkar © Paresh Bhagwatkar, 2011 Paresh Bhagwatkar May be used in whole or part with attribution and without permission
- 6. Key lane design considerations Lane granularity Transportation zone design • Regional zones • Grouping of shipping points in zones MOT granularity Carrier selection parameters Paresh Bhagwatkar
- 7. Granularity of Lanes Type Origin Destination Example Point-to-Zone Shipping point Transportation SPFPT1 > US-PA1 Zone Point-to-Zone Shipping Site Transportation US-FRPT > US- (zone) Zone USAPA1 Zone-Zone Transportation Transportation US-TX1 > US-PA1 Zone Zone Point-to-Point Shipping point Customer SPFPT1 > C12345 Point-to-Point Shipping Site Customer US-FRPT > US- (zone) PA1 Point-to-Point Shipping point Plant SPFPT1 > PLT1 Point-to-Point Shipping Site Plant US-FRPT > PLT1 (zone) Paresh Bhagwatkar Paresh Bhagwatkar
- 8. Lanes from a Site and Shipping Point(s) Point-Zone Zone-Zone Customer or Zone Site Freeport, TX Plant 2 Plant 4 Plant 1 Plant 3 Paresh Bhagwatkar Paresh Bhagwatkar
- 9. Key Points Zone Assignment • In TM zone is determined in TM (using postal code, zone, etc) • In APO - Zone is assigned in the customer address from ERP In addition to lane selection and lane granularity, compatibilities and incompatibilities also come into play Paresh Bhagwatkar Paresh Bhagwatkar
- 10. Sequence of Lane Search Sequence Type Origin Destination 1 Point-to-Point Shipping point Customer 2 Point-to-Point Shipping Site Customer (zone) 3 Point-to-Zone Shipping point Transportation Zone 4 Point-to-Zone Shipping Site Transportation (zone) Zone 5 Zone-Zone Transportation Transportation Zone Zone Paresh Bhagwatkar Paresh Bhagwatkar
- 11. Lane Overview Cust 1 Cust 2 Zone PA2 Zone PA1 Cust 3 Somerset, NJ Zone NJ Paresh Bhagwatkar Paresh Bhagwatkar
- 12. Best Practices for Lane Definition Point-Point Lanes • Usage - High volume between certain plants/ points - Carriers give discount on a point to point basis based on volume or other reason • Considerations - More data maintenance Point-Zone Lanes • Usage - Customers strewn across region - No specific customer has especially high volume - No appreciable discounts on point-point basis • Considerations - Lower data maintenance Zone-Zone Lanes • Usage - Good to have as catch all in case lanes are missing - Customers with very sporadic orders may not warrant maintaining lane from Point to Zone - Some companies may be able to rely totally on zone-zone lanes Paresh Bhagwatkar Paresh Bhagwatkar
- 13. Carrier Cost and Priorities Paresh Bhagwatkar © Paresh Bhagwatkar, 2011 Paresh Bhagwatkar May be used in whole or part with attribution and without permission
- 14. Carrier Cost and Priority Carrier selection can be based on various combinations of cost and priority Carrier selection strategy • Maintained on MOT level of lane • Drives which combination of cost and priority is used Carrier level of lane has • Cost • Priority Cost • Costs maintained on lane • Costs retrieved from ERP system • Costs calculated in TM Priority Paresh Bhagwatkar Paresh Bhagwatkar
- 15. Carrier Selection Strategy and System Behavior Carrier Selection System Behavior Usage Strategy (on MOT level) Neither Cost Nor Priority Carriers from lane ranked in the order of No real applicable scenario maintenance of lane Cost (only) Carriers from lane ranked in increasing order Used when lowest cost carrier is of cost desired Priority (only) Carriers from lane ranked in increasing order Used when service is most of priority (Priority 1 being high) important and cost is not a consideration Cost + Priority System gets cost for each carrier Used as a tie-breaker when Priority is mathematically added to cost carriers tie at cost Resulting number is used for sorting in increasing order Cost * Priority System gets cost for each carrier Used when service is much Cost and priority are mathematically more important than cost. multiplied Priority is used as a magnifier of Resulting number is used for sorting in differences in cost. increasing order Paresh Bhagwatkar Paresh Bhagwatkar
- 16. TSP Selection Strategy - Neither Cost Nor Priority Lane Data Carrier Priority on lane Cost Determined During TSP Selection Schneider National 3 $1100 CH Robinson 4 $1000 Celadon Trucking 1 $1200 Swift 2 $1000 TSP Selection Result Rank Carrier 1 Schneider National 2 CH Robinson 3 Celadon Trucking 4 Swift Paresh Bhagwatkar
- 17. TSP Selection Strategy - Cost (only) Lane Data Carrier Priority on lane Cost Determined During TSP Selection Schneider National 3 $1100 CH Robinson 4 $1000 Celadon Trucking 1 $1200 Swift 2 $1000 TSP Selection Result Rank Calculation Carrier Summary Result (Cost) 1 $1000 CH Robinson 2 $1000 Swift Comes after CHR because of the order of maintenance in the lane 3 $1100 Schneider National 4 $1200 Celadon Trucking Paresh Bhagwatkar
- 18. TSP Selection Strategy - Priority (only) Lane Data Carrier Priority on lane Cost Determined During TSP Selection Schneider National 3 $1100 CH Robinson 4 $1000 Celadon Trucking 1 $1200 Swift 2 $1000 TSP Selection Result Rank Calculation Result Carrier (Priority) 1 1 Celadon Trucking 2 2 Swift 3 3 Schneider National 4 4 CH Robinson Paresh Bhagwatkar
- 19. TSP Selection Strategy – Cost + Priority Lane Data Carrier Priority on Cost Determined Cost + Priority lane During TSP Selection Schneider National 3 $1100 1103 CH Robinson 4 $1000 1004 Celadon Trucking 1 $1200 1201 Swift 2 $1000 1002 TSP Selection Result Rank Calculation Carrier Comment Result (C+P) 1 1002 Swift Priority used as tiebreaker 2 1004 CH Robinson Priority used as tiebreaker 3 1103 Schneider National 4 1201 Celadon Trucking Paresh Bhagwatkar
- 20. TSP Selection Strategy – Cost Times Priority Lane Data Carrier Priority on Cost Determined Cost * Priority lane During TSP Selection Schneider National 3 $1100 3300 CH Robinson 4 $1000 4000 Celadon Trucking 1 $1200 1200 Swift 2 $1000 2000 TSP Selection Result Rank Calculation Result Carrier Comment (C+P) 1 1200 Celadon 2 2000 Swift Swift comes second though they are lowest cost 3 3300 Schneider 4 4000 CH Robinson Though CHR is low cost they come last Paresh Bhagwatkar
- 21. Other “tweaks” Cost + Priority – Spacing out priorities • Possible to space out priority so that effect of priority is more for closely costed carriers • Use when small cost differences should take less effect on TSP selection Priority Only – Maintaining in steps • Priorities maintained in steps of 10, 20, 50 or 100 • Use when there is an anticipation that later another carrier may be placed between two existing carriers in the “gap” Paresh Bhagwatkar
- 22. Tweak: Cost + Priority – Spacing Out Priorities Lane Data Exaggerated Example Carrier Priority on Cost Determined Cost * Priority lane During TSP Selection Schneider National 300 $1100 1400 CH Robinson 400 $1000 1400 Celadon Trucking 100 $1200 1300 Swift 200 $1010 1210 TSP Selection Result Rank Calculation Carrier Comment Result (C+P) 1 1210 Swift Swift costed marginally more than CHR. If priorities were maintained in steps of 1 CHR would have been chosen 2 1300 Celadon 3 1400 Schneider 4 1400 CH Robinson Paresh Bhagwatkar
- 23. Contact Paresh Bhagwatkar • paresh@pareshbhagwatkar.com • 973-495-9913 This document may be used without any permission, but, with attribution in whole or part, with or without changes, and for any commercial or non-commercial purpose (under the creative commons “CC by 3.0” license) Paresh Bhagwatkar