Introduction:
Transportation of goods usually happens in transportation resources such as container, trailer, railcar 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 brings 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:
Ocean Planning:
Usually, in ocean scenarios, it takes several days after the pick-up to deliver to the end consignee, compared to that of truck scenarios. In FCL (Full Container Load) scenarios, container space in ocean vessel can be booked in advance. To reduce the cost, filling that space with demand fully, is the primary target for many of the ocean planners. Moreover, tracking of these container units is very critical. Container building is common in ocean scenarios modelled 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 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 |
3000 |
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
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/4 HANA embedded TM’ too. Above business scenario can be modeled in SAP S/4 HANA 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.
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 |
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 |
Consolidation 2 |
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:
Transportation cockpit with consolidation button, before load consolidation/optimisation:
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 40 FT standard dry container and two Freight Units with frozen products are consolidated in 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 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 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.