4503, Laying the Tracks to Railway Lead-to-Cash. Hanna Gradzka, Solution Manager Transportation & Logistics, SAP AG

Transcription

1 [ 4503, Laying the Tracks to Railway Lead-to-Cash Hanna Gradzka, Solution Manager Transportation & Logistics, SAP AG

2 Solution Overview SAP CONFIDENTIAL This presentation and SAP s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without warranty of any kind either expressed or implied, including but not limited to, the implied warranties of merchantabilitiy, fitness for a particular purpose, or non-infringement.

3 [ SAP Freight & Logistics Solutions Background Standardization & integration within the Freight & Logistics Industry SAP to become the next generation Operating System for Freight & Logistics Build ground-up for best Industry fit Distributed business process execution in logistics networks Freight & Logistics Industry connects the dots in every Business Network and is therefore of major importance to SAP F&L is of major importance to world economy and to SAP customers SAP is heavily investing in Freight & Logistics solutions to the benefit of existing and future customers

4 [ SAP Freight & Logistics Solutions Principle Integration Flexibility & Componentization to allow utilization in an existing IT landscape Flexible utilization of software components Comprehensive interfacing and enhancement capabilities Adaptability in Process Flow & Handling from Lead to Cash, from Product to Contract Processes can be set up end-2-end according to industry specific requirements Multi-modal coverage of freight & logistics processes User Access Channels & Usability for all roles involved in freight & logistics processes Comprehensive access technologies provided from client-based to web-based to portal to mobile Flexible integration into existing platforms

5 [ Customer Benefits Reduced Costs Operational Efficiency Sustainability & Regulatory Compliance Low TCO / High ROI Powerful performance monitoring & decision support Full transportation cost control & auditability Optimal, dynamic planning - mode, route, carriers, assets Efficient freight contract, rate & carrier performance mgmt. High customer service & responsiveness Automated transportation planning & exec. processes Synchronized O2C, P2P with logistics & transportation Efficient asset utilization Automated B2B & web-based network collaboration Optimized load, route and mode scheduling Compliant international transportation of dangerous goods Integrated customs & compliance management Comprehensive, flexible, scaleable, extensible system International coverage for global deployment Standard integration to ERP, GTS & interfaces to 3rd party Full documentation for faster time-to-value

6 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Supply Chain Execution Platform SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

7 DEVELOPMENT TOPICS CROSS TOPICS TARGET MARKET [ SAP Transportation & Logistics Roadmap Market & Application Focus Shippers Freight Forwarders Contract Logistics Rail Carriers Logistics Service Prov. Ocean / Air Carriers Oil & Gas Truck Carriers User Experience, Mobile, Analytics, HANA Connectivity, Event, Integration, Sustainability TCO / TCI (incl. RDS) Core TM processes for shippers EWM returns & claims management TM integration to procure-to-pay, order-to-cash TM integration to customs & compliance mgmt. Warehouse integration into Logistics Supply chain execution platform Core TM processes for freight forwarders Advanced costing, settlement & charge management Profitability costing & cost distribution Dock-Door Scheduling Parcel Rail order-to-cash SCE platform II Strategic freight management Fleet, asset & container mgmt. Parcel mgmt. Retail enhancements Transportation & Logistics collaboration portal Dock Appointment Scheduling II TM enhancements for ocean & air Hub handling Warehouse control (standalone) Integration to Rail Car Mgmt. Integration to air / ocean partner solutions TM enhancements for oil & gas & integration TSW SCE platform for midmarket EWM multi-client framework for LSP Yard & Gate Mgmt. Integrated Transportation Planning Advanced warehouse optimization

8 Supply Chain [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Purchasing (MM) Partner Master Execution Data Platform Purchase Order Service Entry Sheet SAP TM Transportation SAP EWM Extended Warehouse SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance Mobile Devices GIS / Maps SAP EM Event SAP BI Business Intelligence SAP NetWeaver

9 [ The SAP Supply Transportation Chain Execution Platform 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Sales & Distribution (SD) Partner master data Sales Order incl. ATP Credit limit check Delivery / Picking, Packing, Goods Issue SAP TM Transportation Tax calculation Invoicing Invoice verification Integration with Finance and Controlling SAP EWM Document Extended Warehouse Agency Business SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

10 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Financials (FI) Accounts Receivable Accounts Payable Ledger Controlling (CO) SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

11 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Environment, Health & Savety (EHS) Dangerous Goods database Incident Dangerous goods ID Classification Phrases SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

12 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Visual Business Upload of content from Providers Different Types of maps can be used Visibility of map-based screens and functions in Transportation Cockpit TM SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

13 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Global Trade Services (GTS) Customs Customs procedure & approval processing Export declaration Customs status SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

14 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Global Trade Services (GTS) Compliance Embargo Check Supply Sanctioned Chain Party List Execution Screening Platform Security Filing Trade Control Hazadarous Goods Check SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

15 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Business Intelligence (BI) Analytics Supply Business Chain Context Execution Platform Reporting SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

16 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Event (EM) integrated in TM Supply Chain Execution Platform Tracking & Tracing Visibility Alerting Incident SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event SAP SCM Supply Chain Mgmt. Demand Planning Order Promising & Fulfillment Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

17 [ The SAP Transportation 9.0 Development Focus SAP ERP Enterprise Resource Purchasing Sales & Distribution Inventory Manufacturing Human Resource Planning Financials Environment, Health & Safety Service & Asset Mobile Devices GIS / Maps Transportation (TM) Transportation master data (Sales/Purchase) Order integration Transportation Request handling Freight Unit building Transportation Order Routing / Optimization Pre-booking and Capacity Subcontracting and tendering SAP TM Transportation SAP EWM Extended Warehouse SAP EM Event Spot quotations Tariff and Rate definition Charge calculation SAP SCM Supply Chain Mgmt. Draft customer and supplier invoices Demand Planning Document management Order Promising & Output management Fulfillment Order workflow control Transportation Capacity Planning Optimizer SAP GTS Global Trade Services Customs Compliance SAP BI Business Intelligence SAP NetWeaver

18 [ SAP TM 9.1 for Rail industries Rail Carrier View Lead to cash - process Master Data Specialist & Sales Analyst Preparation & Analytics Service Product Development Analyst Product Definition Sales Manager Quotation & Contracts Customer Service Agent Order Handling Rating Specialist & Pricing Analyst Rating & Pricing Invoicing Specialist & Settlement Specialist Invoicing & Freight Settlement Transportation TM 9.1 Analytics and Reporting Event Import / Export, Dangerous Goods and Compliance Document and Output Master Data, Integration and Connectivity

19 [ Lead to Cash Rail Carrier Processes Process flow Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Investigate industry standards for master data Enter, validation and update of master data Rail Car and Analytics Sales Analytics Discover Service Product Elaborate Revenue Options Define service products building blocks Assemble Service Products/SOP Assemble customer specific quote Create customer specific service product & price Maintain customer offer from quote to contract Renewal contracts Monitor and correct Web/EDI order requiring manual interaction Integration to Opps Execute SOP/ COP tasks Review rating error work queue Order cost control Hold orders, Execute SOP/COP tasks manually rate autorate failures Event based order changes handle exception Monitor flexible invoicing process Bill additional charges to customer (Auto based on events) Review invoicing error work queue Rating & Pricing Analytics and Reporting Event Import/Export, Dangerous Goods and Compliance Document and Output Master Data, Integration and Connectivity

20 [ Lead to Cash Rail Carrier Processes Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Preparation & Analytics main processes Investigate market, customer sales, contracts (agreements), profitability Analyze quote pipeline, potential revenue stream Analyze customer sales, existing forwarding contracts (agreement) / profit-ability analysis Track history of quotes that were offered administration of versions Analyze actual usage of current leased and own rail cars / equipment demand forecast Rail Fleet and Analytics Extended Rail Cars master data (maintenance status, operations and order related) Integrate industry standards for master data Key requirements Supporting the industry standards in the rail industry (IRF for N.A. involved in E2E, from Quote to Invoice /TAF TSI for EMEA involved in E2E, from Quote to Invoice) Sales related analytics (profitability of rail cars, train, route, trade lane, customer) has to be available to support fast decision process within sales group Technical data of rail cars (inside length, axis etc.) should be available in order (already available in maintenance process and SAP EAM) EDI - standards for information exchange (carrier and shipper) etc.

21 [ Lead to Cash Rail Carrier Processes Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Service Product Definition Define service product and building blocks Calculate Price for service products Assemble service products / SOP (standard operation procedure) Simulate customer quote on document level Classify customers based on KPI s Enter and validate new master data (location, trade lane) Elaborate revenue options Analyze supplier and existing freight contracts (agreements) Transport supplier quote to freight contract (agreement) Define public and private contract elements Key requirements Assemble service products (building blocks) Simulate profitability for different service products Simulate customer quote and keep the simulations available Synchronize data across all involved systems (legacy, ERP, TM, PI, etc.)

22 [ Lead to Cash Rail Carrier Processes Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Quotation & Contracts Assemble customer specific quote / renew Negotiate contracts with customer (versioning of quotes) Maintain / update forwarding contracts (renewal) Maintain / update transport freight contract (to include partner offerings in sales contracts) Process transport supplier quotes if required Maintain / update equipment freight contract (agreement) Book equipment capacity with suppliers Key requirements Flexible quotations with status and versioning capability Accepted quote is binding contract no order without contract Track and trace all changes within quotation and contract Check all contractual rules and conditions during order handling & execution process Make contract KPIs (e.g. volume commitment vs. actuals) visible to support decision process

23 [ Lead to Cash Rail Carrier Processes Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Order Handling Administer User access to Web-sites for specific customers Correct Web/EDI orders requiring manual interaction Execute SOP / COP task Track + Trace based activities Interactive exchange of information with Opp s in order to ensure seamless process flow with strong event handling capability which trigger actions like invoicing, charge of assessorials, services and demurrages Review validation / message error work queue Review rating error work queue Connect to operations for provisioning / de-positioning Key requirements Operation interface to ensure the car availability + scheduling Cost control in order direct simulation capability to ensure the order profitability Reporting on very detailed level of cost information and distribution Operations interface: revenue route and determination of actual route Handling of empty rail cars / equipment at origin + destination Automatic creation of invoice items based on events (e.g. assessorial)

24 [ Lead to Cash Rail Carrier Processes Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Rating & Pricing Provide rating simulation services for quote, contract and order, keep the versions if required Support rating capabilities according to the regional rules like rule 11 or 11,5 in N.A and similar rules in EMEA Obligatory use of additional master data to get correct price: routing, product commodity, customer master data, shipment conditions, resource and other data Need to support reciprocal switching charges to the order Ability to determinate equipment availability Support in billing process different exchange rates (updated automatically according to external sources in order to enable international business) Key requirements Support flexible calculation rules to accommodate complex pricing rules (shipment conditions which are standard railway rules) to advise the billing process and the revenue settlement between involved carriers Integration to maintenance and operational systems (rail car availability, which car will be used for transport and can be invoiced to customer) additional equipment master data Provide capability for up- and download of those complex rating structures

25 [ Lead to Cash Rail Carrier Processes Master Data Specialist & Sales Analyst Service Product Development Analyst Sales Manager Customer Service Agent Rating Specialist & Pricing Analyst Invoicing Specialist & Settlement Specialist Preparation & Analytics Product Definition Quotation & Contracts Order Handling Rating & Pricing Invoicing & Freight Settlement Invoicing & Freight Settlement Review invoicing error work queue Bill additional charges to customer (auto based on events) Able to match settlement messages to railway accounting waybill Support document flow with access to all logistic documents related to the order/invoice Control the frequency of billing at customer level Ability to bill customer for assessorial with separate invoice Search functionality to support fields (internal reference numbers) used today by shippers Complete receivables Key requirements Flexibility to influence invoice document according to the contractual agreements Billing capability including management of payments and collections Invoice has access to all logistic data, has to be simulated and re-rated after the order is done. Initiate and resolve disputes

26 Scenarios

27 [ Scenario 1 NA Intermodal International Container from Halifax to Houston BNSF Yard, Houston, TX BNSF Yard, Chicago, IL CN Yard, Chicago, IL CN Yard, Toronto, ON Halterm, Halifax NS Train CHHO 30 Km (00:21) Train 120 Train x 22G0 12:00 Arrival Departure Arrival Departure Arrival 13:40 Departure Arrival 11:15 Departure Cons. BNSF On-Carriage BNSF On-Carriage JOE s Trucking Main-Carriage CN Main-Carriage CN Shipper Mearsk

28 [ Scenario 1 Container from Halifax to Houston USA Border Crossing Detroit, MI Canada Car Trip End EDI 417 waybill EDI 417 EDI 417 Car Trip Start BNSF CN ( Joe s) CN CN BNSF_35100 Houston, TX BNSF_66001, Chicago, IL Container Interchange (hand over) CN_55989, Chicago, IL G CN_41978, Toronto, ON CN_12605 Halifax, NS A F Train BNSF_CHHO (CAP: 8000 TO 300 MTR) H C B L K J I Truck (CAP: 30 TO 2 TEU) E Train CN_120 (CAP: 8000 TO 300 MTR) D Train CN_100 (CAP: 8000 TO 300 MTR) Main Carriage Main Carriage Main Carriage Main Carriage

29 R90 NA / Rail Service - Lvl 0 [ Rail Carrier Sales & Customer Service Customer Analyse Sales TM90 ID TM90 Maintain Master data ID Volume Forecasting ID TM91 Define Service Product Cat. ID TM90 Analyse Supplier and Freight Contracts ID 1 Quote Offer TM91 Create Customer Quote ID TM91 Assemble Supplier Quote ID 2 Offer Acceptance TM90 Create Forwarding Contract ID TM90 Maintain Freight Contract ID 5 Request empties TM90 Create Empties Forw. Order ID Check Availability ID Assign Equipment TM91 TM91 ID TM91 7 EDI Waybill /EDI 404 TM90 Create Forwarding Order ID Build Freight Units Planning & Routing Create Freight Orders TM90 ID TM90 ID TM90 ID 8 EDI 417 Autorating Autorating ID ID TM90 TM90 TM90 Create Settlement Document ID Update Event Handler ID 11 Status msg TM90 Create Settlement Document ID 12 Invoice EDI410 Create Invoice Monitor Process Exception Handling ERP ID TM90 Perform Invoice Verification ID 13 TM90 ID TM90 ID Invoice. Carrier 3 Quote Offer 4 Offer Acceptance 9 B/L Instructions 14 Invoice ISS EDI 426 Settlement Request

30 [ SAP TM Rail Coverage Process and Task View 1-2 Preparation & Analytics Service Product Definition Quotation & Contracts Mgt. Forwarding Order Mgt. Planning & Capacity Mgt. Rating & Pricing Mgt. Freight Order Mgt. Monitoring & Exception Mgt. Invoicing & Freight Settlement TM 9.0 TM 9.1 Investigate industry standards for master data Enter, validation and update of master data Sales, Contract, Profitability Analytics Demand and Equipment Volume Forecasting (APO) Analyze Industry Reference supplier Files and existing Rail Fleet freight contracts and Analytics Define service products building blocks Calculate Price for service products Assemble Service Products/SOP Classify customers based on KPI s Simulate customer quote on document level Elaborate revenue options Assemble customer specific quote / renew Maintain / update forwarding contracts (renewal) Transport supplier quote to freight contract Maintain / update transport freight contract Maintain / update Enhanced Quote Rail specific contract UI Monitor message work queue Correction of Web/EDI orders Execute SOP / COP tasks Manage customs Compliance check Event based order changes handle exceptions Commercial routing entry Enhanced event driven actions and charges Enhanced rail message support Integrated order planning Operational routing options Capacity Booking & Freight Order creation Planning finetuning and resource assignment Dispatching Empty equipment availability check

31 [ SAP TM Rail Coverage Process and Task View 2-2 Preparation & Analytics Service Product Definition Quotation & Contracts Mgt. Forwarding Order Mgt. Planning & Capacity Mgt. Rating & Pricing Mgt. Freight Order Mgt. Monitoring & Exception Mgt. Invoicing & Freight Settlement TM 9.0 Complex charge calculation Execute SOP/ COP tasks Review rating error work queue Hold orders, manually rate auto-rate failures Master data cockpit Book interline movements & forward waybills Arrange feeders Create truck manifests Manage customs and documents Assign BL to bookings Compliance checks Tracking & Tracing Monitor activities Exception handling Notifications & alerts Role based visibility scenario s Customer invoicing Freight invoice verification Monitor invoicing process Bill additional charges to customer Review invoicing error work queue TM 9.1 Enhancements for rating work queue Rail specific charge calculation Manage claims Mass update Rail specific UI Enhanced rail message support tbd Tracking of equipments and resources Event driven charges & billing for assessorial Rule 11 Revenue settlement Flexible invoicing Dispute

32 Mapping of Terminology

33 [ Business Objects in SAP TM and their Usage for Rail Organisational Data Legal entity Sales Organisation Company Code Sales Organisation The company code determines the currency. The company code is used in transportation charge management for invoicing and charging. The sales organization is used in the creation of forwarding order types, forwarding quotation types and order based transportation requirements. Purchasing Organisation Purchasing Organisation The purchasing organization is used in the creation of freight order types and freight unit types. Planning Group Planning and Execution Group The planning and execution organization is used for freight order types and freight order unit types.

34 [ Business Objects in SAP TM and their Usage for Rail Master Data (I) Business Partner Business Partner A Business Partner can be either a Railroad, a Carrier, Customer, Customs agent, etc. STCC Commodity Codes Commodity codes can be customized to create multiple harmonization code models Service Products Station, Yards, customer facilities, etc. Transportation Zone Service Location Transportation Zone Requested transportation and logistics related activities A logical or physical place in which products or resources are managed on a quantity basis. Basis for transportation processes. There are source, destination and transshipment locations. In the planning run, TM systematically looks for opportunities to combine shipments into optimal loads per vehicle resource for orders going to same geographical area. Mode of transport Transportation Mode The transportation mode describes the highest-level transport grouping, for example, road, rail, inland waterway, sea, or air. Vehicle Type Means of Transport The means of transport describes the characteristics of specific vehicle types or classifications that transport goods, such as 60-foot rail boxcar, or a bulk car.

35 [ Business Objects in SAP TM and their Usage for Rail Master Data (II) Railcar, Loc, Trailer, Truck Vehicle Resource An instance of a means of transport that can provide transportation services. O/D pair Transportation Lane A transportation lane represents a direct route between two locations that can be used to transport products between them. Actual Route Route Routes can be determined by pick-up and delivery windows at both shipping and receiving locations. Stage Stage The terms can be used as synonyms. There can be pre-, main, and on-carriages. The carriages can be combined mono- or multi-modal. A Carriage can contain documents. Timetable Railcar, container Train Service Schedule Carrier Schedule Freight Unit Gateway Schedule Carrier schedules define a sequence of stops for which the start stop and target stop are not gateways. Freight Units are the smallest unit of freight and are the basis for the planning of the freight. Freight units are created from preceding business documents: Forwarding orders, Order- or Delivery-based transportation requirements. Gateway schedules are schedules whose start stops and destination stops are transportation hubs (gateways) such as container terminals where freight is transshipped

36 [ Business Objects in SAP TM and their Usage for Rail Functional Blocks (I) Revenue Route Empties order Trade Lane Forwarding Order Definition of Revenue route tbd A Trade Lane refers to two areas joined by a route or routes that are served by a certain carrier. Order for providing empty equipments like railcars, containers or chassis Customer order Forwarding Order Customer order for the transport of goods Customer Invoice Forwarding Settlement Document Invoice of order charges to a customer for transportation services Carrier Invoice Freight Settlement Document Cost document representing the invoice expected from an alliance partner / carrier / vendor Revenue Settlement Request Freight Settlement Document Settlement request from ISS

37 [ Business Objects in SAP TM and their Usage for Rail Functional Blocks (II) Car List Freight Order List for all loaded railcars in a yard assigned to a train Interline Order Freight Order Order for movement by other Railroad at interchange Trucking Order Freight Order Order to carrier for execution of transportation activities Dangerous goods list Freight Order Document printed for DG information Container List Freight Order Document to list details and types for all loaded and empty containers Waybill Equipm. Damage Report Forwarding Order Freight Order Event Handler Document printed form forwarding order to send to shipper Report to list all damaged equipments

38 Thank you Contact: Hanna Gradzka L2C Project Lead IBU Transportation & Logistics SAP AG M:

39 [ Learning Points What are the actual problems that railways and the payment parties of their shippers / customers are facing in terms of correct and comprehensive invoices SAP solutions to prepare and present invoices from forwarder/carrier to customer and how this can be a first step towards better invoices and settlement Visions on utilizing SAP TM to bring invoice creation, and bill presentment at carrier side into sync with settlement and matching at customer side to head towards a perfect invoice

40 [ Shipper-Carrier Interaction and Invoice Accuracy Shippers Customer Set data foundation for invoice: Requested data Enhance invoice data with events and actual master data / transactional data Create and match invoices based on complete events history, actual data, acutal conversion rates and taxes Carrier Shipper Receive customer order Manage order acceptance Simulate shipment options Order Acceptance Shipment Proposal E2E routing proposal for shipper order Delivery proposal Delivery decision Placement of transport requests Shipment Placement Allocation of capacities Confirmation of transport requests Prepare deliveries for shipment Logistics Operations Prepare and execute road haulage and rail movement Happily pay invoice Shipper Invoicing Invoice freight to shipper Rail Order and Operations Processes Planning Execution Planning Order Subcontracting Operations and Control

41 [ ISSUES AROUND FREIGHT INVOICES AND PAYMENT 42

42 [ General Info North American Logistics (USA) Business logistics costs $1.21T in 2010, 10.4% increase from 2009 Logistics as percentage of GDP 12.00% 10.00% 9.40% 9.90% 8.30% 7.80% 8.00% 6.00% 4.00% 2.00% Transport Modes 0.00% Trucking revenue rose 5.7%, not enough to reverse losses; 16% capacity removed; when demand rebounds may not be able to respond Rail revenue posted 21.8% gain due to success in raising rates; carloads increase 7.5%, intermodal volume increase 14.2%; sector is in very strong and in very good shape on capacity Ocean Revenue rose 14.1%; suffering from overcapacity; spot rates dropped 40-50% over Q Air revenue rose 11.2%; air cargo capacity however has shrunk 12% Source: 22 nd Annual State of Logistics Report

43 [ Freight Bill Payment & Audit Issues Freight Bill Payment Issues: Cost to process freight bills internally (due to administrative overhead, dispute settlement, etc): $4 to $12 dollars per freight invoice, average $8 per freight invoice It used to be common for carriers not to be paid for 45 days because of manual processing delays. That put tremendous financial stress on carriers. If problems go unresolved for months, the carrier is effectively lending the shipper money. Trend: to outsource Freight Bill Payment and Audit to 3rd Party Cost savings offered by outsourcing to freight auditing companies is about 2-5% of total freight bill derived from invoice errors wrong rate authorities used, duplicate invoices, etc Carriers service level infringements Rate & Service Visibility Years ago, shippers could go to a tariff system and see the cost of shipping from point A to point B. Today they can t do that because every carrier has its own rates. Historically, 4% to 6% of freight services went unbilled. Transactions fell through the cracks or problems dragged on unresolved because of inaccurate or incomplete information. Source: -in-ship-shape

44 [ Jobs in Freight Transportation Arrangement (USA) All Jobs in Freight Transportation Arrangement Occupations Business and Financial Operations Occupations Computer and Mathematical Occupations Business and Financial Operations area of Freight Transportation Arrangement Purchasing Agents, Except Wholesale, Retail, and Farm Products Compliance Officers Architecture and Engineering Occupations Cost Estimators 1% 20% 8% 5% 1% 8% Legal Occupations Arts, Design, Entertainment, Sports, and Media Occupations Arts, Design, Entertainment, Sports, and Media Occupations Protective Service Occupations 31% 1% 1% 6% 6% 4% 1% Human Resources, Training, and Labor Relations Specialists, All Other* Logisticians Building and Grounds Cleaning and Maintenance Occupations 14% Analysts 57% Personal Care and Service Occupations Sales and Related Occupations 4% Training and Development Specialists Office and Administrative Support Occupations 28% 1% 3% Market Research Analysts and Marketing Specialists* Installation, Maintenance, and Repair Occupations Transportation and Material Moving Occupations Business Operations Specialists, All Other* Accountants and Auditors Still a very labour-intensive and paper-based business: Office and admin support (57%); Transportation and material movement (20%); Sales related (8%); Mgmt (8%); Business and Financial operations (5%) Business and Financial Operations (5% of total): Accountants and auditors (31% or 2,580); Business operations (28% or 2330 ); Logistics (14% or 1220) Note: there are more accountants and auditors than logistics employees! Financial Analysts Financial Specialists, All Other Source: U.S. Bureau of Labor Statistics 2010 NAICS Freight Transportation Arrangement;

45 [ Freight Audit Freight audit is the process of examining, adjusting, and verifying freight bills for accuracy Freight costs Costs incurred by the merchant in moving goods, by whatever means, from one place under the terms of contract of carriage. In addition to transport costs this may include such elements as packing, documentation, loading, unloading, and transport insurance Complexity of Freight Cost Calculations and Freight Audit Rising freight costs: freight costs can make up 10% of an organization s expenditure; drivers: volatility in fuel prices, uncertainty of demand, complexity of freight quotes Freight cost calculations are vulnerable to human and process errors hence requires proper auditing to ensure that the organization does not overpay for services it did not incur Forwarder freight rates are usually maintained in multiple spreadsheets and usually each forwarder has a different freight rate format to the customer. Shippers also try to maintain their own freight rates tables which may not be up-dated Recipe for dispute Freight rate calculations complex and error-prone Freight audit tedious process; done either in-house or outsourced to 3 rd party

46 [ Freight Audit Trends Outsourced Freight Audit Some companies don t have the resources to do the freight audit hence outsource to 3 rd party A freight bill payment company receives its clients freight bills directly from the carriers. When the bills are received, either via EDI or manually, they are entered into the contractor s system, providing immediate visibility. Once the bills are entered, they are audited for accuracy. Auditors verify the bills validity, mileage, duplicate payments, accessorial charges, and use of correct tariffs. After auditing, the charges are coded and reconciled, and the bills are paid. Self-billing Some companies have gone forward with a process to pay freight bills. The customers calculate their freight cost themselves and instruct the freight forwarders to invoice using credit notes. This process transfers the responsibility to correct freight calculation from the customer to the forwarder.

47 [ Dispute causes Waybill Missing data has been defined / completed by carrier Different source of events Quote/Contract High complexity Different source of influencing master data Master Data Different master data used as base for calculation Accessorials Freight transportation rates Demurrage Switching Charges Fuel Surcharges Domestic Reposition Weighing Storage Charges Handling Charges Touch Points and Dispute Causes between Shippers and Carriers Invoice Wrong rates calculated/expected Distance between O/D different base Unclear accessorial charges Rate Effective Date varied Exchange Rate Date Wrong events as base for calculation Missing transparency

48 [ Dispute Impacts Complexity Factors Different communication channels Many parties and opinions involved Lots of information to gather and take into account Complex to evaluate the "real" reason It s a money issue Impacts on Process Efficiency No clear responsibilities No predefined escalation rules No monitoring of process and duration No process control Long resolution cycles Progress in resolving not measurable Not all involved parties have access to all relevant information on Customer No clear status reports - not "one voice Decreasing satisfaction on Cash-Flow Late cash-flow (liquidity, interest) No partial payments possible No partial dunning locks possible "Incorrect posting in General Ledger (Revenue vs. Doubtful Revenue) on System Support of multiple channels

49 [ Disputed Invoices Pain Points High DSO (Days Sales Outstanding) Difficulty in predicting cash flow High cost of solving disputes Disputed invoices can indicate issues in the customer relationship due to Quality problems Pricing Account relationship

50 [ SAP Components BETTER INVOICES AND BILL PRESENTMENT 51