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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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© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission
Paresh Bhagwatkar
Transportation Lanes in TM and APO
Version 2.0
Paresh Bhagwatkar
Content
� Transportation lane overview� Transportation lane design� Carrier cost and priorities
Paresh Bhagwatkar
Lane Overview
Somerset, NJ
PA1PA2
Paresh Bhagwatkarc
Paresh Bhagwatkar
Structure of Transportation Lane
Shipping Point US01 > PA1
TL
LTL
Std. Bulk Truck
SNBO
QLTY
SVTN
Lane Header
Means of Transport (MOT)
Carrier
Paresh Bhagwatkar
© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission
Paresh Bhagwatkar
Transportation Lane Design
Paresh Bhagwatkar
Paresh Bhagwatkar
Key lane design considerations
� Lane granularity� Transportation zone design
• Regional zones
• Grouping of shipping points in zones
� MOT granularity� Carrier selection parameters
Paresh Bhagwatkar
Granularity of Lanes
Point-to-Point
Point-to-Point
Point-to-Point
Point-to-Point
Zone-Zone
Point-to-Zone
Point-to-Zone
Type
SPFPT1 > PLT1PlantShipping point
US-FRPT > US-PA1
CustomerShipping Site (zone)
SPFPT1 > C12345CustomerShipping point
ExampleDestinationOrigin
US-FRPT > PLT1PlantShipping Site (zone)
US-TX1 > US-PA1Transportation Zone
Transportation Zone
US-FRPT > US-USAPA1
Transportation Zone
Shipping Site (zone)
SPFPT1 > US-PA1Transportation Zone
Shipping point
Paresh Bhagwatkar
Paresh Bhagwatkar
Lanes from a Site and Shipping Point(s)
Plant 1
Plant 2
Plant 3
Site Freeport, TX
Plant 4
Customer or Zone
Point-Zone
Zone-Zone
Paresh Bhagwatkar
Paresh Bhagwatkar
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
Sequence of Lane Search
CustomerShipping pointPoint-to-Point1
CustomerShipping Site (zone)
Point-to-Point2
5
4
3
Sequence DestinationOriginType
Transportation Zone
Transportation Zone
Zone-Zone
Transportation Zone
Shipping Site (zone)
Point-to-Zone
Transportation Zone
Shipping point Point-to-Zone
Paresh Bhagwatkar
Paresh Bhagwatkar
Lane Overview
Somerset, NJ
Zone NJ
Zone PA1
Zone PA2
Cust 1Cust 2
Cust 3
Paresh Bhagwatkar
Paresh Bhagwatkar
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, 2011May be used in whole or part with attribution and without permission
Paresh Bhagwatkar
Carrier Cost and Priorities
Paresh Bhagwatkar
Paresh Bhagwatkar
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
Used as a tie-breaker when carriers tie at cost
System gets cost for each carrierPriority is mathematically added to costResulting number is used for sorting in increasing order
Cost + Priority
Used when service is much more important than cost.Priority is used as a magnifier of differences in cost.
System gets cost for each carrierCost and priority are mathematically multipliedResulting number is used for sorting in increasing order
Cost * Priority
Used when service is most important and cost is not a consideration
Carriers from lane ranked in increasing order of priority (Priority 1 being high)
Priority (only)
Used when lowest cost carrier is desired
Carriers from lane ranked in increasing order of cost
Cost (only)
No real applicable scenarioCarriers from lane ranked in the order of maintenance of lane
Neither Cost Nor Priority
UsageSystem BehaviorCarrier Selection Strategy (on MOT level)
Carrier Selection Strategy and System Behavior
Paresh Bhagwatkar
Paresh Bhagwatkar
$10002Swift
$12001Celadon Trucking
$10004CH Robinson
$11003Schneider National
Cost Determined During TSP Selection
Priority on laneCarrier
Swift4
3
2
1
Rank
Celadon Trucking
CH Robinson
Schneider National
Carrier
Lane Data
TSP Selection Result
TSP Selection Strategy - Neither Cost Nor Priority
Paresh Bhagwatkar
$10002Swift
$12001Celadon Trucking
$10004CH Robinson
$11003Schneider National
Cost Determined During TSP Selection
Priority on laneCarrier
$1200
$1100
$1000
$1000
Calculation Result (Cost)
Celadon Trucking
Schneider National
Swift
CH Robinson
Carrier
4
3
2
1
Rank
Comes after CHR because of the order of maintenance in the lane
Summary
Lane Data
TSP Selection Result
TSP Selection Strategy - Cost (only)
Paresh Bhagwatkar
$10002Swift
$12001Celadon Trucking
$10004CH Robinson
$11003Schneider National
Cost Determined During TSP Selection
Priority on laneCarrier
CH Robinson44
3
2
1
Rank
Schneider National3
Swift2
Celadon Trucking1
CarrierCalculation Result (Priority)
Lane Data
TSP Selection Result
TSP Selection Strategy - Priority (only)
Paresh Bhagwatkar
$1000
$1200
$1000
$1100
Cost Determined During TSP Selection
10022Swift
12011Celadon Trucking
10044CH Robinson
11033Schneider National
Cost + PriorityPriority on lane
Carrier
Celadon Trucking
Schneider National
CH Robinson
Swift
Carrier
12014
3
2
1
Rank
1103
Priority used as tiebreaker1004
Priority used as tiebreaker1002
CommentCalculation Result (C+P)
Lane Data
TSP Selection Result
TSP Selection Strategy – Cost + Priority
Paresh Bhagwatkar
$1000
$1200
$1000
$1100
Cost Determined During TSP Selection
20002Swift
12001Celadon Trucking
40004CH Robinson
33003Schneider National
Cost * PriorityPriority on lane
Carrier
CH Robinson
Schneider
Swift
Celadon
Carrier
Though CHR is low cost they come last40004
3
2
1
Rank
3300
Swift comes second though they are lowest cost
2000
1200
CommentCalculation Result (C+P)
Lane Data
TSP Selection Result
TSP Selection Strategy – Cost Times Priority
Paresh Bhagwatkar
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
$1010
$1200
$1000
$1100
Cost Determined During TSP Selection
1210200Swift
1300100Celadon Trucking
1400400CH Robinson
1400300Schneider National
Cost * PriorityPriority on lane
Carrier
CH Robinson
Schneider
Celadon
Swift
Carrier
14004
3
2
1
Rank
1400
1300
Swift costed marginally more than CHR. If priorities were maintained in steps of 1 CHR would have been chosen
1210
CommentCalculation Result (C+P)
Lane Data
TSP Selection Result
Tweak: Cost + Priority – Spacing Out Priorities
Exaggerated Example
Paresh Bhagwatkar
Contact
� Paresh Bhagwatkar• [email protected]• 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)