In a November 2011 post, we announced the SAP TM 8.0 go-live of a market-leading consumer electronic company. At the beginning of 2012, Novigo completed an SAP TM 8.1 Proof-of-Concept for one of the largest Chemical companies worldwide, resulting in the start of a TM deployment in summer 2012.
One element that the Logistics Departments of these two major corporations had in common was a tendency to model and maintain business rules in Excel spreadsheets, a fact that persists across many different industries, geographies, and company sizes. The rules themselves can range from very simple to highly complex. Simple rules for example dictate purely which carrier shall be selected for a given shipment going to a particular customer. More complex rules can be nested and arrive at a result once a hierarchy of rules (similar to a branch and bound algorithm) has been analyzed and interpreted. Examples would first determine the order size, resulting in a means of transport like Parcel or LTL. Once the means of transport is determined the nested rules become more specific and determine carriers based on regional and equipment availability, capacity commitments, and potential preferences of the consignee or other business partners.
The approach as such is not necessarily one of ‘Optimization’ but rather of Rules-Based or Excel-like planning.
The business reasons behind these rules can be of different origins. Compliance reasons (the Rule 11 regulations in the US Rail sector comes to mind), a desire to balance carrier commitments, or the simple fact that important customers desire the adherence to their own freight contracts. In other words ‘Customer Routing Guides’ very often dictate the specific shipping options.
While driving transportation processes on the basis of business rules is not a bad thing (even though it might not always seem optimal), the issues of maintaining rules in spreadsheets are rather obvious – to just name a few:
SAP Transportation Management offers a variety of solutions to model business rules. Some of them can even be incorporated into the Optimization engine, e.g. Incompatibilities. Examples include hazardous goods scenarios where certain product categories can’t be transported on the same vehicle due to the risk of chemical reactions.
A more comprehensive approach to business rules is offered in the form of ‘Conditions’ that are used in many different aspects of the SAP TM solution. A great example to visualize the concept of Conditions is the following simple scenario where order size controls the selection of transportation mode. In case the size of a sales order exceeds let’s say 35,000 US pounds the order should immediately be tendered to a carrier and therefore not flow into the pool of orders below 35,000 pounds that then are consolidated into larger shipments. In other words, the simple ‘Order Size/Weight’ condition acts as a filter.
Finally, more sophisticated rule set requirements can be supported by BRFplus, an SAP NetWeaver component. This Business Rules Framework – once configured and integrated into the standard process of SAP TM – puts the power of Rules Maintenance into the hands of the business user. New rules do not require IT anymore, the rules interpretation is handled at run-time by dynamically creating the necessary ABAP coding. The result is a high-performance rules engine that leaves nothing to the imagination. We plan to blog in more detail on BRFplus in the near future.
In summary, I would like to leave you with the following message. Don’t put SAP TM onto the shelf of black-box optimization engines. We have blogged in detail on the comprehensive process support that SAP TM delivers above and beyond just planning and scheduling. Rules- or Excel-like planning and execution approaches allow TM users to continue their work with well-known and established business rules, while at the same time benefiting from increased automation, fewer input errors, and identification of missing rule sets.