Transparency in freight cost management with SAP TM in the passenger car segment

Transcription

1 CAMELOT ITLAB Customer success story _Technologies _Products & Solutions _SAP Applications Transparency in freight cost management with SAP TM in the passenger car segment Efficiency through standardization For the optimization of freight cost management with more than 6 million passenger car transports BMW Group implemented SAP Transportation Management and took a step forward to standardization and cost reduction. From Innovations to Solutions.

2 CAMELOT ITLAB Customer success story Transparency in freight cost management with SAP TM in the passenger car segment Figure 1: Situation at project start Problem today: Inconsistent end-to-end processes and lack of data quality Additional risks: Outdated technologies, dying know-how of technical and functional support Results: High degree of manual validation efforts, no transparency of current billing volume RE-ALIGNMENT AND RE-DESIGN OF freight billing Objectives Number ONE is the branding of the corporate strategy BMW Group established to lead business areas to efficiency and long term value add. Logistics, being a crucial business area, and freight cost management as a part of it, is using this strategy for the management of 80 suppliers who transport vehicles from production site to distribution centers either by land, by air or sea. In 2011, 1.7 million passenger cars were routed to their final destination plus special freight transports for special vehicles like preproduction prototypes. BMW Group regarded the adaption of new logistic concepts in freight cost management as a challenge. The former IT solution, an inhouse development, did not have the functionalities to meet all requirements. End-to-end processes for freight cost billing were not fully covered. Software technologies and hardware were outdated and important know-how of technical and functional support slowly disappeared. A new IT solution was stringently required as BMW planned to expand its business with freight cost billing volume to further extend.

3 Figure 2: SAP standard and BMW's implementation requirements _SAP TM Concept _BMW Scenario Order handling Transport planning GPS/THP/ MDBB FAIS/ Spetros Bid for transportation 3 1 Transportation 4 2 Freight cost billing 5 1 ASTRAS Freight cost billing 5 2 FAIS/ Spetros SAP ECC 3 TBB/EXTKOM 6 4 SAP TM includes all functionalities of an integrated transport management solution The consistent document flow concept follows a stringent end-to-end process State of the art technologies meet customer's requirements Most TM functionalities stay in existing systems Possibility of a consistent document flow concept through high degree of interfaces Freight order the central object of freight cost management The Solution BMW s choice of SAP Transportation Management as its favoured platform for freight cost management is fully integrated into an existing SAP solution landscape for planning, purchase, billing and transport services. To minimize efforts in invoice verification, services are billed via credit item procedure. In certain cases invoices are published to suppliers via platform for download and further financial processing. Camelot supported SAP AG during the implementation of SAP TM 6.0, SAP TM 7.0 and SAP TM 8.0 prototypes. Camelot s expertise was also requested by SAP AG for the implementation blueprint of SAP TM at BMW in BMW chose Camelot as its implementation partner and the established project teams cooperated closely from blueprint phase to final business concept. Two main challenges had to be mastered: new technologies which bases SAP TM and a close time frame given. Early Product Experience Being one of the first roll-outs, go-live for SAP TM 8.1 was in June BMW was looking for an implementation partner who had combined expertise in products, end-toend processes in supply chain and freight cost management. Camelot is a process-oriented IT consultancy with proven track in SAP SCM and SAP TM. Due to a strict project management approach, with progress and milestones to be monitored every two weeks, the new solution for freight cost management was implemented within 7 months. BMW s and Camelot s team consistingly exchanged for setting up testsystems and live demonstrations to eventually co-create the final solution design.

4 Figure 3: Functional extension of freight cost management in SAP TM _Interfaces _Business Process _Technology Subsequent modification of freight order Port services Progressive freight order handling Generation of final freight order Tiered volume Dieselfloater Freight cost calculation Packaged freight cost documents Explicit calculation for containers and passenger car positions Taxation attribute Cost allocation Destination-dependent freight payer Up-/Download of pricetables Performance enhancement Historically established processes require extended standard functionalities Results Outlook BMW was able to implement a standardized, transparent passenger car freight billing process without technical or functional disruptions, clear responsibilities and less manual validation efforts. Costs were reduced while dataquality increased. Through enhanced evaluation methods, decision makers quickly gain an overview of a suppliers services and billing volume. Mapping of freight contracts and according price combinations were simplified. Tax calculations for passenger car transports and transport sections in various countries are now available at the push of a button. After the successful project phase for passenger car distribution, BMW will conclude the upcoming project phase with Camelot. Objective is the optimization of freight management for billing scenarios Factory Supply Production Material and Spare Parts Transport based on the latest release. The biggest benefit for BMW s IT department is the fall back on internal know-how for administration and support of SAP TM and regular functional software updates. A potential solution upgrade in the future is not an obstacle anymore: Even though a high degree of individual processes in passenger car freight cost management was maintained SAP TM Releases are installed easily.

5 _ Success Factor 1: Lean Project Management Interview Dr. Kirsten Commer BMW Group, Process-IT Order to Delivery What is the relevance of passenger car freight cost management within BMW s supply chain? It is crucial as a supply chain only works as long as delivered services are compensated accordingly. After the blue print phase SAP TM went productive in less than 7 months. What were the drivers for such a fast implementation? Main driver was certainly the close cooperation of responsibles from planning, purchase, transport logistics, accounts payable and IT working with Camelot. Camelot s process consultants and SAP TM solution architects had a deep understanding for our business needs. So at all times a high quality was delivered and given time lines kept. Which challenges did BMW face with the implementation of SAP TM? At that specific time the software was brandnew and still in ramp-up phase. The challenge was to find an implementation partner who had already expertise in the field. Transport management is not as widely spread as other classic ERP solutions so there are less resources with profound know-how to be found. Principles Projectmanagement needs to support core activities during implementation (supplier of specialists) Less, but efficient reporting documents and project monitoring Clear milestones and activities Exact role definition Stakeholder and management communication Riskmanagement via projectsponsor and project office (no additional ressources needed) Benefits Reduced administration Prioritization of activities by management _Success Factor 2: Efficient Development Approach Principles Step by step development (2-3 weeks cycle), individual workpackages - Early involvement of and validation by customer Clearly defined and short term development results Benefits Visible progress in systems, not only slides Camelot met all our expectations: deep expertise in products, methodology and close relation to SAP AG. That relation is an important criteria for problem solving if consultation of the software manufacturer is needed.

6 CAMELOT ITLAB Customer success story _ Freight Cost Management based on SAP TM at a glance: Your Contacts BMW Group BMW Group and brands BMW, MINI, Husqvarna Motorcycles and Rolls-Royce is the most successful manufacturer of passenger cars and motorcycles. As a global player BMW Group is represented in 140 countries by its own distribution network and has production sites in 14 countries. At the end of 2011 earnings before interest were 7.38 billion E, sales revenues billion E and approx employees worked for BMW Group. Consistent automation of freight cost management More transparency Increased data quality Improved analysis Less manual validation Less manual data entry (Dieselfloater calculation/ Up-/Download) Cost- and time-saving Improved mapping of freight contracts Variety of price combinations in standard solution Releaseability despite high degree of BMW specific processes Camelot ITLab CAMELOT ITLab is a process-oriented IT consultancy with strong focus on SAP modules MDG, SRM, SCM, CRM, TM and BI. Established partnerships with leading IT providers like SAP, IBM, Oracle and Microsoft in conjunction with customer focused solutions and innovative blueprints make CAMELOT ITLab the consultancy of choice for end-to-end-processes. CAMELOT provides in addition to SAP Standards independent solutions like the Add-On Supplier Management Camelot CSx. As part of CAMELOT International Group we provide combined strategy-, organizational- and IT-consultancy services. Headquarters are based in Mannheim. Camelot ITLab GmbH Mario Baldi Managing Partner Theodor-Heuss-Anlage Mannheim Phone mba@camelot-itlab.com