Keeping transportation operations on track

Transcription

1 Accelerate Value Keeping transportation operations on track SAP Transportation Management (TM) helps companies remove cost and complexity by simplifying the transportation process from planning and optimization to execution and settlement

2 INTRODUCTION In today s global economy, the need to transport products has never been greater. While globalization opens up new markets and revenue streams, it also increases operational costs. Transportation is irrevocably bound to the fuel industry, which can be highly volatile both in terms of cost and supply especially given the world s diminishing oil resources. These shortages along with concerns about climate change - transportation is responsible for 15% of global CO2 emissions 1 - are prompting governments to introduce taxes and regulations that also drive up freight shipment costs. The impact of rising fuel costs is exacerbated by the fact that many trucks leave warehouses and distribution centers with spare capacity. It is estimated that only half of the trucks traversing the European Union have a full load 1, which has financial and environmental ramifications for both carriers and shippers. Products and supply chains have become increasingly complex between 3,000 and 5,000 suppliers are involved in the production of a car 1 Despite spiralling freight costs, the demand for transportation will continue but to grow: products and supply chains have become increasingly complex between 3,000 and 5,000 suppliers are involved in the production of a car 1. This not only increases the need for transportation but also introduces additional business risk, as delayed or missed deliveries could lead to a critical break in the supply chain and the non-fulfilment of customer orders. This in turn will have a negative impact on product availability, competitive advantage and profitability. More stringent trade and product regulations also add to transportation complexity and risk, with non-compliance or poor audit trails resulting in excessive dwell time and unforeseen stopoffs. In an era of just-in-time deliveries, such delays can come with far-reaching consequences. 1 Eric Osterroth, SAP, September

3 keeping transportation operations on track case for action Faced with growing complexity and costs, companies need to This lack of integration and functionality prevents companies bring greater accuracy, speed and flexibility to their transportation from fully optimizing their transportation operations. To achieve operations, which increasingly involve not only multiple modes of such optimization, organizations need to deploy a solution that transportation but also numerous shipping partners around the can go beyond shipment execution and planning to include more world and multiple internal stakeholders. sophisticated features, such as: Transportation Management Systems (TMS) help companies n Automated freight sourcing determine the most efficient and cost-effective way to execute the n Logistics network remodeling movement of products. n Order consolidation n Trend reporting and analysis. Although many businesses recognize the benefits of TMS, very few have deployed an integrated platform that supports the entire transportation lifecycle. Instead organizations are reliant on Such advanced funtionality will lead to better optimized shipments standalone solutions or the limited functionality offered by generic and further facilitate identification of problems and continuous business planning systems. improvement opportunities. ULTIMATE SUPPLIERS SUPPLIERS DISTRIBUTORS / 3PLS MANUFACTURERS CUSTOMER OUTBOUND LOGISTICS INBOUND LOGISTICS Transport Order Mgmt. RETAILERS Transport Planning Transport Execution Transport Tracking Freight Costing & Billing CARRIER / TRANSPORTATION PROVIDERS The Supply Chain & Transportation Network A Complex Network and Process 3

4 Seamless transportation management in real-time SAP has been helping organizations address their transportation challenges for more than 20 years through the deployment of powerful enterprise IT solutions, such as the logistics execution functionality in the SAP ERP application, and the transportation planning and vehicle scheduling (TPVS) functionality in the SAP Advanced Planning & Optimizing component. For example SAP TM can be integrated with SAP ERP to allow ready access to product and customer master data as well as order/ delivery requests. These requests can then be planned, subcontracted, executed and tracked via SAP TM with transportation costs being fed back to SAP ERP for customer billing and vendor invoicing. With transportation costs on the rise, the sub-contracting stage of this process has become particularly important. Organizations not only need to ensure they select a partner that delivers maximum value but also ensure that they take advantage of volume discounts by consolidating orders for shipment. SAP TM helps to simplify freight procurement by supporting: Peer-to-peer, broadcast, direct, and web-based tendering Company-wide sharing of current shipping rates Quote acceptance with or without response to RFQ Collaboration with external carriers Exception-based management via automated alerts Carrier contract compliance. Unlike many TMS, the SAP software supports both inbound and outbound freight shipments, which can be tracked in realtime. This provides an end-to-end view of the global supply chain including continuous moves and multi-leg shipments. Such broad visibility makes it easier for companies to identify opportunities to minimize empty backhauls, which reduces both costs and impact on the environment. In recognition of the evolving transportation landscape, it has now launched a dedicated application: SAP Transportation Management (TM). The software provides both in-depth functionalities and integration, which enable organizations to link transportation to upstream and downstream business processes, such as order management and finance. SAP Transportation Management: Process Overview 4

5 Transformation with guaranteed outcomes Although transportation is founded on common processes, every company has its own policies. These will vary depending on the freight involved for example if products include dangerous goods and shipment destinations some destinations are subject to specific import/export controls. Each TM must therefore be implemented to meet a company s individual needs as well as optimized for integration with other enterprise systems. This integration can be quite complex encompassing not only ERP systems but also any legacy systems, external shipment tracking system and Global Trade Services for import/export compliance. Legacy Systems Optimizer 8.0 External GIS O p t i o n a l SAP TM P I 7.00 ECC 6.0 EhP5 Master Data, Logistics, Financials GTS 10 EM 7.01 SAP TM Overview System Landscape (Open interface to any back-end system) Web Service Direct Integration EDI FACT X12 Partner Collaboration Failure to get these foundations right could prevent organizations from realizing a full return on their TM investment. HCL AXON has more than 15 years experience of helping companies transform their transportation challenges with SAP solutions. We provide support at every stage - from business case creation and performance baselining through to implementation and user education. Our expertise extends across every area of our customers business, from finance, resource planning and program management to manufacturing supply chain and operations. As a result, we understand how to best integrate transportation processes with other business disciplines. HCL AXON Implementation Approach Project Preparation Confirm the Vision Methodology & Scope HCL AXON takes a unique benefits realization approach to customer engagements, which means we commit to a guaranteed outcome - whether it involves lower transportation costs or better asset utilization. Business Blueprint Confirm the Design Realization Build & Test the Solution Cut-over Manage the Transition Benefits Realization Deliver the Benefits 5

6 benefits realization Cost reduction is one of the key benefits of optimized transportation operations. Fewer empty miles and more full loads are just two of the factors that help minimize transportation overheads. Best-inclass TMS can also help to reduce expenditure by: Encouraging users to select the most cost-effective carriers and shipment methods Minimizing the manual effort involved in freight procurement, transportation planning, shipment tracking and billing. As well as helping companies unlock financial savings, an integrated TMS will also address challenges surrounding supply chain continuity by reducing the risk of unforeseen exceptions in the shipment process and accelerating cross-border transactions with compliant export documentation. As a result, organizations will be able to ensure that products get to their destination on time, which helps: Efficient and cost-effective transportation is essential in today s fast-paced economy and will help businesses respond more quickly to evolving consumer demand, legislation and supply chains Safeguard customer service levels Support a leaner product inventory Protect competitive advantage and profitability. Efficient and cost-effective transportation is essential in today s fastpaced economy and will help businesses respond more quickly to evolving consumer demand, legislation and supply chains. 6

7 SAP TM: supporting end to end transportation operations Freight procurement Centralized purchase, carrier compliance tracking, inbound freight integration Planning and consolidation Centralized planning at enterprise level, inbound and outbound, integrated customer forecast Carrier assignment Automatic carrier assignment, continuous moves Tracking Real-time visibility and exception management, integrated EDI, global supply chain view Freight payment and settlement Match and pay, automated invoicing, automated audit for unplanned charges, freight cost and profitability analytics Optimized transportation operations Business Benefits Reduces freight costs Safeguards supply chain continuity Supports expansion into new markets Minimizes carbon footprint Simplifies compliance with import/export controls 7

8 HCL AXON transportation expertise Fast Facts HCL AXON is rated number one for customer satisfaction according to the latest SAP survey for global system integrators Executed more than 100 successful go-lives of SAP in the aviation, defense, logistics & transport providers, consumer packaged goods and heavy engineering industry sectors Proven business benefits across planning and scheduling, transportation management systems, warehouse management systems, truck load carriers and freight logistics HCL AXON has been a key player in over a third of all global SAP implementations in the travel, transportation and logistics sector Significant investments in transportation - solutions, accelerators, methodologies and frameworks addressing unique functionalities providing competitive value for customers across key performance parameters HCL AXON has been a key player in over a third of all global SAP implementations in the travel, transportation and logistics sector Analyst IDC has recognized HCL AXON as a major player in SAP implementations Our Client Base includes AMD Anheuser Busch Arctic Cat Bayer Britvic Bosch Canadian National Canadian Pacific Dr. Pepper Haas Automation Hospira Lucent Newport Panasonic Pirelli Rockwell Automation Smiths Solutia Xerox 8

9 CASE STUDY ARCTIC CAT keeping transportation operations on track Arctic Cat, Inc. engages in the design, engineering, manufacture, and marketing of snowmobiles and all-terrain vehicles (ATVs). The company also provides Arctic Cat snowmobile and ATV parts, garments, and accessories. It has two production facilities, four distributions centers and 600 users. Business Need Company was not taking advantage of building mix loads (ATVs and Snowmobiles) on the same truck Reduce the manual planning effort for freight planners Systematic route optimization and load determination Provide simulation capability of transportation planning HCL AXON Solution Served as the lead integration partner for implementing an SAP solution Integrated two third party products Ortec LEO VSO and Rand McNally Comprehensive knowledge transfer including configuration Project completion in four months Benefits Reduced number of stops by 12% (target: 10%) Reduced total number of miles traveled by 4% (target: 2%) Reduced rate per mile by 4% (without fuel price increase) Improved traffic coordinator efficiency Increased mixed loads from 3% to 15% HCL AXON exceeded expectations with their SAP Transportation practice team Dave Paulson Traffic Manager Arctic Cat 9

10 ABOUT HCL AXON HCL AXON is a global pioneer in leveraging leading technologies to drive value realization. Our value management approach accelerates the realization of benefits from your investments by aligning IT to your clients required business outcomes. We provide the complete range of consulting, hosting and Business Process Outsourcing (BPO) services, necessary to define, realize and sustain real business change. Our unique delivery model integrates on-site business transformation consulting services with near-shore and off-shore technical development and support capabilities, to ensure that our clients receive the optimal solution at the right price point. Accelerate Value We recognize that different organizations require differing outcomes from their ERP investment, and as such we provide different solutions to best address these needs: Consulting Design, deployment and optimization of worldclass business practices Transformation Delivering fundamentally improved levels of operational performance through the implementation of worldclass ERP platforms Refresh Rapid implementation of pre-configured industry specific business solutions based on world-class ERP platforms Re-platforming Migrating legacy solutions onto today s leading technology platforms Sustainment Complete heterogeneous systems applications management capabilities from remote system monitoring through to Information Technology Outsourcing (ITO) In all of these approaches, HCL AXON combines unrivalled experience in deploying the world s leading enterprise application software with significant industry experience to ensure that our programs deliver value for our customers, faster and more cost effectively than any of our competitors. True Global Delivery HCL AXON operates as a single global organization allowing us to deploy consulting teams which leverage proven industry and solution best practices from our offices around the world. We fully understand that successful implementation projects require both on-site client engagement to drive process design and business change while simultaneously leveraging the significant cost and time zone benefits associated with cost effective off-shore and near-shore, round-the-clock delivery centers. Our global delivery model does not treat off-shore as an afterthought; we fully integrate our off-shore capabilities into our implementation and application management methodologies to ensure that the value of the integrated on-shore/off-shore model is fully optimized. IT is all about certainty of outcomes Ultimately our engagements are driven by the need to deliver certainty to our clients: On Value On Time, To Budget Guaranteed Service Levels Committed Cost Reductions Realized, Cashable Benefits Achieved Business Metric Improvements HCL AXON regularly contracts to the delivery of specific outcomes whether it is a reduction in a call center s average call handling time, guaranteed infrastructure management cost-reductions or a particular cost saving or performance improvement. Financially Stable and Respected HCL AXON is a wholly owned subsidiary of HCL Technologies, a $6 billion global technology leader with over 90,000 employees. HCL is not only financially robust; it is also globally recognized for its revolutionary management practices which focus on trust, integrity and the empowerment of our employees. This approach, which we call Employee First, is the subject of one of the most frequently taught Harvard Business School Case Studies. 10

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12 HCL AXON is the best in the world at creating industry-specific, end-to-end platform solutions that deliver business performance HCL AXON 2012 (All references to HCL AXON include former Axon) Oct 2012/B/Ref 4310