Best Practice. Management of a Transport Network in Procurement. IT-Process Recommendations for the Collaboration of Companies along the Supply Chain

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1 Best Practice Management of a Transport Network in Procurement Version: 08/2015 IT-Process Recommendations for the Collaboration of Companies along the Supply Chain AXIT GmbH. A Siemens Company. Nachtweideweg Frankenthal.

2 Content Introduction...3 Business Case...4 Initial Situation & Requirements...4 Best Practice Description...5 Scope of the Solution...5 Especially recommendable functions...6 Advantages...6 Success Factors for Implementation the Best Practice Methodology Integration Standardization Flexibility...8 List of Functions of this Best Practice...9 Best Practice Management of a Transport Network in Procurement 2

3 Introduction Saving knowledge in reference processes IT cannot only be supporter but also driver of new, innovative processes along the supply chain. A possibility for this is the definition of recommendations of best practices for the collaboration of companies along the supply chain. No one knows these processes better than AXIT: in over 2,500 supply chain management customer projects which AXIT has implemented so far it turns out that often the same problems occur for the companies involved. For the best and the most efficient solutions of these frequently occurring problems AXIT has created reference processes. In these processes lie the knowledge and the experience of the AXIT employees systematically saved. They serve as a guideline for the implementation of similar projects. The recommended best practices by AXIT reduce complexity, enable a stable supply and lead to a smooth collaboration of all participants. They are fast and easy to use, currently used in practice by over 150,000 users and address the typical challenges in the operative management of logistical networks with many different participants. One central Platform for all Participants Cross-company standardization of processes is only achieved when all participants look beyond the borders of their present in-house systems. That s why a central platform is needed which connects the heterogenic system worlds and the involved actors. All participants can location independent communicate with each other and exchange information. Services In order to use Best Practices ideally for the company, AXIT supports them with different services: Workshops help the participants to find the appropriate solution. Trainings accompany the roll-out of the solution and assure the correct usage. After the implementation, the Review-Workshops and consulting help the companies add useful extensions. Best Practice Management of a Transport Network in Procurement 3

4 Business Case Initial Situation & Requirements A company from industry and trade with several production or warehousing locations organizes a pickup network for material or spare parts. These are needed for further processing in production or will be temporarily stored for further distribution. In general the forwarder is paid and ordered by the consignee but the supplier alerts or confirms the pick-up orders. It is general cargo and/or partial or full vehicle loads. Often the process for ordering pick-ups is intransparent. Depending on the location of the consignee, involved forwarders and suppliers there are different workflows which have partially evolved historically. An example: Suppliers place pick-up orders for shipments via fax, , EDI or phone or the pick-up is done automatically without detailed shipment information through regular pick-up tours (milk runs). This results in the following requirements: Centralized and harmonized way of transmission for pick-up alerts/orders from various suppliers to various forwarders (via web or interface) Quick and easy roll out to additional, new suppliers and forwarders Creation of required transport documents (labels and bill of lading) Monitoring and analytics on transport performance across locations Transparency on pick-up volumes is to lead to consolidation potential. Continuous transparency on the shipments progress and on ETAs as well as early escalation of deviations from regular process Easy reports on shipment volumes Easy verification of incoming freight invoices based on shipments actually handled. Best Practice Management of a Transport Network in Procurement 4

5 Best Practice Description The solution includes management of a procurement network with various suppliers and forwarders from a manufacturing or trading company s point of view. Img.: Best Practice Overview Scope of the Solution 1. The suppliers enter pick-up orders via web account and transfer them via EDI interface to the forwarders. During shipment entry additional important information can be automatically added through calculations and by accessing master data by AX4, e.g. - Calculation of delivery date based on an existing pick-up date and stored transit times, calculation of pick-up date based on an existing delivery date and stored transit times. - Calculation of pick-up date based on delivery date and transit time (or vice versa calculation of delivery date) - Automated routing of the shipment to the respective forwarder based on stored routing tables and services - Calculation of loading meters, volume, chargeable weight (cf. especially recommended functions ) 2. Forwarders receive pick-up shipments via interface and their AX4 web account. 3. They report tracking data back from pick-up to delivery (via EDI or web account). AX4 actively checks for discrepancies, e.g. by comparing target and actual dates, e.g. tracking: pre-alerted but not picked up, picked up with errors, not delivered on expected date, etc. The tracking includes monitoring the complete transport including pre-, main and after-carriage even across different carriers such as rail and road. 4. Through an observer the consignee can monitor all processes and data across locations. 5. Standard reports on forwarders performance as well as shipment volumes (e.g. for tenders) 6. Combinable enhancements: - Freight billing: Assessment of actual shipment data with stored freight tariffs and creation of credit notes which are transmitted to the ERP system. - Time-Slot Management for smooth and efficient delivery at the ramp Best Practice Management of a Transport Network in Procurement 5

6 Highly recommended functions Automated pick-up order generation from pre-alerts which previously have been transmitted by the supplier via EDI. For this purpose, AX4 reads the delivery note data and adds the following information by accessing the master data: - Calculation of packaging data (required packaging, number of packages and gross weight) - Storing of transit time tables to calculate pick-up or delivery dates - Storing of calendars (on public holidays, company opening hours, company shutdown times) to calculate exact delivery times based on transit time tables Shipment upload as an alternative to the manual entering of pick-up shipments Bundling of pick-up shipments Consolidation of shipments to manifests for pre-, main and after-carriage as well as allocation to the respective forwarder. Report on transit time control by forwarder: Comparison of calculated target times with actual times from tracking data Advanced Tracking: - Exchange of documents (e.g. proof of delivery or customs documents) to avoid separate faxes. For example customs documents on a shipment can be uploaded and provided to the import department via web. The import department, in turn, can verify if all documents are available and release the shipment for further workflows. - Feedback of tracking data via mobile device (smartphone). By scanning a QR code the driver is directed to a tracking feedback mask where he can enter the tracking status online Reports with comprehensive data for tenders Advantages Continuous transparency on pick-up processes. Less error and more stable delivery due to standardization of processes across locations Reports across locations and at the push of a button due to a consistent data pool (e.g. for measuring delivery performance or for tender data) Additional bundling potentials through transport preview (e.g. joint pick-up for several plants) Connecting a new supplier or forwarder is possible within 1 day, instead of many weeks, time savings up min. 50 % Reduction of error rate due to improved decisions based on complete and centrally available data Reliable delivery due to automated monitoring of the process workflow and early information on discrepancies. This reduced research efforts and allows for faster possibilities to react. Easier controlling of billing based on the comparison of shipment data and target freight charges with actual freight invoices. Best Practice Management of a Transport Network in Procurement 6

7 Success Factors for Implementation the Best Practice Methodology AXIT s best practices are always based on the same recommended methodology. It is based on three steps: 1. Easy and flexible INTEGRATION 2. STANDARDIZATION of processes 3. FLEXIBILITY to be able to adapt to changes in an agile and swift way Each of these steps includes direct advantages so it is not necessarily required to make all three steps to achieve improvements for the logistics provider and his customers. 1. Integration Easy and flexible integration of ERP system without any additional programming on the customer s side Flexible connectivity variations to integrate the heterogeneous world of suppliers and forwarders without exceptions Integration of individual company locations and central departments like purchasing and central logistics 2. Standardization via workflows: The process for transmission of pre-alerts, shipments and status information is standardized across all locations and follows the same procedures. Individual ways of data transmission no longer exist. Completeness of delivered information no longer varies depending on the respective partner s IT competence. The intermediary platform equalizes this. Standardization also means that tracking data reported back by the forwarders has to be translated into the company s central vocabulary. This avoids having multiple forwarders variants for the same tracking status, e.g. delivered which might be known as delivery completed, clean receipt or transport finished. This part of standardization into a harmonized vocabulary is an important prerequisite for later reports on the data. Best Practice Management of a Transport Network in Procurement 7

8 ... via roles and rules: This solution mainiy includes the following roles: orderer, forwarder, supplier. The roles are linked to the above mentioned workflows. This way it is defined who will receive and view which data and who has to give which kind of feedback. In this case a good example for a system of rules is Supply Chain Event Management (SCEM). When a negative tracking status is sent the SCEM will immediately trigger an notification to the shipper. If there are discrepancies between a pick-up order and a delivery order a notification will also be sent.... via standardized documents: Documents such as barcode labels or loading lists have an identical look across all locations. A forwarder or incoming goods department working with several locations or suppliers thus receives standardized documents facilitating further use. 3. Flexibility Flexibility by modular processes Flexibility is achieved by modularizing an overall process. It is split up into partial processes which, depending on requirements, can be flexibly combined. An example process is the generation of pick-up orders. It includes the following process modules: Entry via web Transmission via EDI Automatic generation of pick-up orders which are then enhanced by profiles As pick-up order and/or as pick-up pre-alert Flexibility by combination of product modules Flexibility is also supported by product modules which can be part of the process depending on a location s requirement, e.g. shipment management, tracking, SCEM, document upload, reports, freight cost calculation. Flexibility by self-contained management and configuration via AX4 Open The customer can manage and edit the AX4 solution by himself via AX4 Open. Also this adds to flexibility as changes can be implemented faster. Best Practice Management of a Transport Network in Procurement 8

9 List of Functions of this Best Practice Img.: Best Practice Module Box Integration Web Account EDI - FTP, , HTTP, HTTPS, OFTP via TCP/IP, OFTP via ISDN, value added-service-bound communication ways (X 400- Telebox), SFTP, AS2 Shipment Upload - Upload shipment data via csv or text file - One-off creation of mappings to this by the AX4 user Web Service - inbound, outbound Mobile Devices - Scanner, Smartphone, Tablet PC Roles Shipper (Supplier) Logistics Provider (Forwarder for pre-, main and after-carriage) Consignee (company from industry or trade) Observer Best Practice Management of a Transport Network in Procurement 9

10 Shipment Management Shipment Transmission - Transmission of shipments via interface (from customer / to logistics provider) - Shipment upload - Shipment creation via web mask o Sub-position for entering article data o Validation of entered data after save action o Dangerous goods entry mask o Templates - Shipment delete, advice, release, cancel, edit - Pallet information o Entry mask for pallets o Pallet overviews with search function o Control Tower function: Search for partners stock Enter data on behalf of others Consolidation & Dispatch - Consolidate shipments - Consolidation via web mask o Consolidate several shipments to one manifest o Validation of entered data after save action - Manifest assignment o to transport mode o to pre, main and delivery carriage o to carrier Manifest Creation - Transmission of manifests via interface - Manifest create, delete, advice, release, cancel, edit Routing & Barcode Label - Creation of barcode labels for shipments - Storing of routings - Generation of barcode labels o via AX4 o via web service Overviews & Searches - Shipment and manifest overviews with search function - Creation of individual overviews based on overviews type Download of shipment and manifest data (csv, xml and Excel for overviews type 2.0) - Comment functionality for shipments Best Practice Management of a Transport Network in Procurement 10

11 Tracking Transmission of tracking data from Logistics Provider Transmission of Tracking Data to Shipper - Transmission of tracking data via interface - Tracking status updates via web mask o with status/reason-combination o with check routines o with comments - Tracking status available on different levels: o Shipment o Shipment position o Manifest - Tracking information via Smartphone (add, view) - Anonymous tracking - Transmission of tracking data via interface Overviews & Searches - Tracking overview with search function and traffic light colors - Creation of individual overviews based on overviews type Download of tracking data (Excel for overviews type 2.0) Additional Functions Print Documents - Print documents available for: Shipment, loading list, barcode label, pallet note Electronic Data Folder - Upload of external documents (e.g. pdf, xls, jpg) and assigning to following levels: o Shipment o Manifest - Displayed in overviews - Anonymous access via link SCEM - Available for: Shipment, manifest, tracking, uploaded documents (see electronic data folder) Master Data - Import of master data via interface o e.g. transit times, container master data (dimensions, weight, stacking factor) - Calculations based on master data (e.g. of pick-up date based on delivery date, transit tables and calendar) Reports - Reports via (csv, xls, pdf) AX4 Open (range of functions to be defined by project) Administration / Management - Administration of user, partner and master data Configuration Workflow - Definition of participants and their relation among themselves Configuration User Interface - Design of entry masks and overviews with fields and colors Configuration Documents - Design of print documents Integration Tools - Possibility to monitor the data flow Best Practice Management of a Transport Network in Procurement 11

12 AX4me Usability & User Experience - Web session prolongation to 60 minutes - Single Login for multiple AX4 accounts - Excel-Download for overviews - Creation of individual overviews - Comment function for shipments and delivery notes Combinable Extensions Delivery Note Creation - Transmission of delivery notes via interface - Delivery note creation via web mask - Delivery note delete, advice, release, cancel, edit - Shipment creation based on delivery note Overviews & Searches - Order, call-off and deliver note overviews with search function - Download of order, call-off and delivery note data (csv/xml) Print Documents - Print documents available for: delivery note Reports - Cube creation for transmission of data to the report module (done by AXIT) - Configuration and administration of reports - Presentation of reports in graphical form or table Export of data (csv, xls, pdf) Billing - Master data o Storing of freight tariffs incl. versioning o Manual editing of stored tariffs o Storing of calculation routines - Create and visualize logics for freight cost calculation via drag & drop in the Calculation Designer - Freight cost calculation on shipment and manifest level - Manual selection of respective VAT rates for each invoice item - Freight cost information directly on shipment entry o Selection of available carriers and services based on freight costs - Automated freight cost calculation e.g. after shipment or manifest release and transmission to external systems - Entry mask for transport invoices - Transport invoice overview with search function - Creation of final invoice or credit note data for further transmission to the customers system (as csv or via EDI) Best Practice Management of a Transport Network in Procurement 12

13 Time-Slot Management - Definition of time-slots for delivery and pick-up - Link between time slot and shipment or manifest - Solutions for warehouse manager o Flexible creation for booking and reservation pages via AX4 o Creation of long-term reservations o Calendar overview also considering non-working days like plant vacations and weekends o Reports about ramps occupation - Solutions for forwarders o Free time-slots can be advised and booked o Individual entry of delivery data o Printing function for delivery or pick-up notes o Reports about ramps occupation Best Practice Management of a Transport Network in Procurement 13

14 Editor AXIT GmbH A Siemens Company Nachtweideweg Frankenthal Phone: / Fax: / For this and other best practices please visit: You can request further information about the use of the logistics platform AX4 at: Best Practice Management of a Transport Network in Procurement 14

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