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mySAP SCM and Transportation Planning and Vehicle Scheduling: Optimize Shipping Resources...

by Bernd Mosbrucker | SAPinsider

July 1, 2001

by Bernd Mosbrucker, SAP AG SAPinsider - 2001 (Volume 2), July (Issue 3)

Transportation managers face a conflicting task: to minimize overall transportation costs while ensuring optimal inventory levels and customer service. This requires tight coordination with shipping companies and supply chain partners. This will become even more important in the future, as new trading communities will use Internet marketplaces to replace traditional EDI transactions, providing a venue in which partners, customers, and suppliers can collaborate. As a result, transportation management will become a vital link between partners in peer-to-peer environments, as well as in public or private exchanges. mySAP SCM's transportation planning engine, Transportation Planning/Vehicle Scheduling (TPVS), is designed to provide transportation planners with the services necessary to manage their logistics.

     Achieving these goals requires tight coordination with shipping companies and supply chain partners - especially in the future, when transportation planning will involve sharing transportation resources to reduce costs, regardless of whether or not you have your own fleet or rely on carriers. New trading communities, using Internet marketplaces that replace traditional EDI transactions, will be the venue in which partners, customers, and suppliers collaborate.

     As a result, transportation management will become a vital link between these partners in peer-to-peer environments, as well as in private or public exchanges.

     To support the required functions and processes in these deeply integrated organizations, the need is growing to enhance existing solutions.

An Introduction to mySAP SCM Transportation Planning/Vehicle Scheduling

     The mySAP SCM transportation planning engine, Transportation Planning/ Vehicle Scheduling (TPVS), is designed to provide transportation planners with the services necessary to manage their logistics: inbound, outbound, intra-company, and inter-company. With TPVS, customer orders, as well as deliveries, stock transfer orders, scheduling agreement call-offs of a delivery plan, or purchase orders can be consolidated into a single shipment.

     TPVS provides transportation planners with a user interface that integrates these tasks. From this interface, planners can automatically consolidate orders into a shipment using an optimizer, interactively change a shipment, select the carrier for a shipment automatically, and collaborate with the service provider by tendering and scheduling a shipment. Finally, the shipment can be released to mySAP SCM's Transportation Execution functionality or any other execution system.

     TPVS is designed as an integrative engine within mySAP SCM, and communicates and interacts synchronously with all solutions, including mySAP Customer Relationship Management and mySAP Business Intelligence. TPVS can also be used as a transportation planning engine for other Internet-driven solutions, to ensure efficient logistics services in marketplaces or private exchanges.

     Underneath its user-friendly interface, the TPVS Workbench offers highly sophisticated algorithms. This combination provides transportation planners with the shipment, order, resource, and status information they need, along with all loading, transit, and unloading activities for each specific shipment (see Figure 1).

Figure 1 TPVS User Interface

     Decision support services combined with simulation capabilities are provided by the TPVS optimizer (or "VS optimizer," shown in Figure 2). Utilization of transportation resources is improved by meaningful consolidation of orders, taking into account constraints such as time windows, resource handling (e.g., the resources needed to unload a truck), and compatibilities between products and transportation types, to name just a few.

Figure 2 mySAP SCM TPVS Optimizer

     With the optimizer, you can determine the best route, even with multiple pick-up and delivery shipments.

Transportation Planning Over the Entire Supply Chain

     mySAP SCM TPVS exploits the opportunities in the total supply chain network - something a manual process could never do. Its breadth of func- tionality supports planners in selecting the optimal combination of transportation modes:

  • Carrier selection assists in analyzing opportunities to keep trucks in motion. By keeping carrier assets highly utilized, you have an opportunity to lower your transportation rates. The carrier selection feature allows you to create continuous moves, combined with various other strategies, to select your carrier. Supported strategies are freight costs (the freight cost database features a wide variety of rating data structures), contractual agreements with carriers, carrier priorities, capacity limits of the carrier (see Figure 3), and assignment based on business shares.
  • Cross-docking capabilities are also supported. The TPVS Workbench offers real-time visibility of the planned shipment schedule in a tabular or graphical layout. This helps provide faster and more informed responses to inquiries. With its easy-to-use interactive change capabilities, the TPVS Workbench cuts costs and order cycle time, especially compared to offline sheets and traditional paper forms.
  • Shipment forecasting provides transportation planners with the ability for longer-term forecasting, to plan for assets needed in the upcoming weeks. With these shipment forecasting options, transportation planners can plan for both short-term and mid-term horizons.
Figure 3 Shipment and Capacity Overview

Short-Term and Long-Term Forecasting for You and Your Partners

     Using advanced planning books, you can adjust and calculate the number of assets you need over the next weeks or even months. Transportation planners can use historical and time series data from mySAP Business Intelligence to adjust the number of expected shipments for specific transportation modes (train, ships, or trucks). Based on the actual forecast of supply chain demands, they can create a clear picture of the number of vehicles needed.

     This planning data is also accessible via the Internet, which allows planners to communicate directly with carriers, and collaborate with them to determine the best carrier for each shipment.

     SAP also includes TPVS in its business collaboration blueprint for carrier selection, tendering, and billing, as shown in the Shipment Tendering C-Business Map (Figure 4), available at

Figure 4 C-Business Map Using TPVS

Short Response Times and Efficient Shipment Schedules Mean Better Customer Service

     Of course, the best plan is of no use if you cannot execute it. But if an optimal plan can be executed easily, it reduces labor costs and delays associated with correcting infeasible plans. With the tight integration between modules within mySAP SCM, transportation planners can better execute shipments based on an optimal loading and routing plan. And at execution, the focus can be on last-minute changes, quality service, and improved responsiveness - making all operations more productive.

     With the ability to simultaneously optimize transportation plans, execute all transportation moves, and measure execution performance, planners can constantly revise and improve schedules and contracts for upcoming periods. mySAP SCM - together with other solutions such as mySAP Business Intelligence - helps companies make the best use of their resources.

Bernd Mosbrucker is Business Development Manager in the GBU SCM at SAP, and was previously Product Manager for Transportation Management. He has conducted trainings on SAP's ATP, PPDS, and TPVS modules. Before joining SAP, he was in sales and consulting with IDS SCHEER AG from 1992 to 2000, and worked as a software and implementation consultant for SAP's Supply Chain Management solutions in several industry sectors, including the automotive, paper, and process industries.

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