SAP S/4HANA Transportation Management - Load Consolidation for Ocean Containers

Introduction:

Transportation of goods usually happens in transportation resources such as containers, trailers, railcars, etc. In SAP TM, we can use transportation units to model these transportation resources. TUs (Transportation Units) share some similarities and differences with FUs (Freight Units) and FOs (Freight Orders). While a FU only represents a pure demand, freight orders and freight bookings (FBs) represent pure capacities. However, TUs can represent both demand and capacity at the same time. TUs bring flexibility but has additional complexity and documents in the design. Thus, in general, the design direction is not to use TUs, if the business process can be designed with FUs and FOs. However, there are scenarios where TUs are required. For example:

• Trailers get loaded or unloaded while not being coupled to the truck.
• The truck is operating in different vehicle combinations across the stages in the freight order
• Road train (One truck/tractor with multiple trailers attached) with a dynamic recoupling
• Multiple containers loaded onto one truck
• Advanced tracking of TUs separately via GTT/EM

Ocean Planning:

Usually, in ocean scenarios, it takes several days after the pick-up to deliver to the end consignee, compared to truck scenarios. In FCL (Full Container Load) scenarios, container space in ocean vessels can be booked in advance. To reduce the cost, filling that space with demand fully, is the primary target for many ocean planners. Moreover, tracking these container units is very critical. Container building is common in ocean scenarios modeled in SAP Transportation Management (TM).

As ocean planners build containers, they gain experience and will have a rough estimate of the quantity of the product that can fit inside a container. But when a shipper transports the products, with a product line of several hundred SKUs (Stock keeping unit) in a variety of dimensions, it is hard to estimate the quantity of the product that will fill the transportation resource. So, relying on the planner’s skill and experience is not a scalable solution and is not the ideal way to solve the issue. This should be technology-driven and planners should be able to design/configure/maintain the system based on their experience.

Business Scenario:

Since different types of containers are available, there are many possible ways to fill them with the demands (FUs). For example, there are 5 transportation demands to transport 2 types of products from the US to Germany on the same delivery date.

Demand/FU	Products	Weight (LB)	Original Location	Destination Location	Delivery Date
SO1/FU1	Dry Product	50000	Akutan, US	Bremerhaven, DE	10/31/2019
SO2/FU2	Dry Product	10000	Akutan, US	Bremerhaven, DE	10/31/2019
SO3/FU3	Dry Product	10000	Akutan, US	Bremerhaven, DE	10/31/2019
SO4/FU4	Frozen Product	40000	Akutan, US	Bremerhaven, DE	10/31/2019
SO5/FU5	Frozen Product	13000	Akutan, US	Bremerhaven, DE	10/31/2019

Now, if we have 4 different types of containers as below, there will be many ways we can assign the transportation demands into these transportation units.

Container Resources	Payload Weight (LB)	Tare Weight (LB)	Max Gross Weight (LB)	Cubic Capacity (FT3)
20 FT Standard Dry	53460	6062	59522	986
20 FT Refrigerator	53460	6062	59522	986
40 FT Standard Dry	63491	8156	71647	2393
40 FT Refrigerator	63491	8156	71647	2393

Additionally, there can be constraints such as dry products can only be shipped in standard dry containers and frozen products can only be shipped in refrigerated containers. For example, we can use

• one 40 FT Standard Dry container and one 20 FT Refrigerator container
• two 20 FT Standard Dry containers and one 20 FT Refrigerator container
• one 40 FT Standard Dry container and one 40 FT Refrigerator container
• two 20 FT Standard Dry containers and one 40 FT Refrigerator container

SAP Solution:

SAP TM 9.4 has introduced Load Consolidation functionality, which can be used to determine the most cost-efficient combination of container types. The details are available in the SCN link: https://blogs.sap.com/2016/11/14/monday-knowledge-snippet-mks-65-tm-9.4-load-consolidation

The load consolidation considers the transportation demands, cost of different container types, and the incompatibilities between specific products and container types, to find the best combination of container types for the transportation of demands. The functionality is enhanced and is available in S/4HANA embedded TM too. The above business scenario can be modeled in SAP S/4HANA TM as below.

In addition to standard configurations such as master data, transportation network, etc... we need to configure three settings in the system to find the best and cost-effective combination of container types.

1. Planning Cost Settings for different container types. For example
   
   

   Container Resources	Fixed cost per document	Fixed cost per resource
   20 FT Standard Dry	50	200
   20 FT Refrigerator	60	250
   40 FT Standard Dry	70	300
   40 FT Refrigerator	80	350

   
   
Incompatibilities between products and container types to meet the additional requirements. Dry products can only be consolidated to standard dry containers and frozen products can only be consolidated to a refrigerator container.


2. Add ‘Load Consolidation’ to page layout for transportation cockpit.
   

Based on the system configuration, we expect the below option 1 to be picked-up out of the different ways of consolidation.

Sales Order	Products	Weight (LB)	Total Weight	Consolidation 1 (cheap) (680)	Consolidation 2 (expensive) (930)
			(LB)
SO1/FU1	Dry Product	50000	63000	One 40 FT Standard Dry Container = 70 + 300	Two 20 FT Standard Dry Containers = (50 + 200) * 2
SO2/FU2	Dry Product	10000
SO3/FU3	Dry Product	3000
SO4/FU4	Frozen Product	40000	53000	One 20 FT Refrigerator Container = 60 + 250	One 40 FT Refrigerator Container = 80 + 350
SO5/FU5	Frozen Product	13000

Screenshots of the consolidation demo from SAP S/4 HANA system:

• PROD_01 is a dry product and PROD_02 is a frozen product.
• 5 SOs/FUs the with above quantity
  
• Four container resources are available with the above-mentioned capacity.
  

Transportation cockpit with consolidation button, before load consolidation/optimization:

After ‘Consolidation’ of ‘All FUs with All Resources’, now, we can see the planning status of FUs changed and two Transportation Units are generated:

We can see that three Freight Units with dry products are consolidated in one 40 FT standard dry container and two Freight Units with frozen products are consolidated in one 20 FT refrigerator container. This is the best combination of container types based on cost and incompatibility. Also, the container space utilization is 99%.

Subsequently, these container units can be assigned to Freight Bookings and other SAP TM processes can be completed.

Conclusion:

With load consolidation functionality in SAP Transportation Management (TM), now we can build containers efficiently. Container utilization can be improved, and the cost of transportation can be reduced. Using the SAP TM to identify the best option is a scalable solution and it greatly improves the planning efficiency, when there is a product line of several hundred SKUs in a variety of dimensions. Similarly, Load consolidation can be used for other modes of transport and various other scenarios. Implementation partners with multiple TM implementations can greatly help the companies to identify these business requirements and design the solution effectively. Novigo, with more than 50 successful SAP TM on-premise implementations, is the leader and the most experienced consulting firm in the TM area. Our consultants are well equipped to advise clients about the various aspects of TM Load Consolidation and are already working with multiple companies across the world in various aspects. We expect many companies will consider load consolidation functionality and we will be part of most of these projects.