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Transportation Lanes in SAP TM and SAP APO - PPS - V2.0 - Paresh Bhagwatkar
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Transportation Lanes in SAP TM and SAP APO - PPS - V2.0 - Paresh Bhagwatkar

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This presentation gives an overview of transportation lanes in SAP TM and SAP TPVS (the functionality is very similar in those products).
It talks about the concept of the transportation lanes, the levels at which data exists, and the granularity of transportation lanes along with guidelines on deciding the granularity.
Also, it goes into different carrier selection strategies and how priority and cost interact.
This presentation does not go into the priorities for broadcast tendering (which is functionality in SAP TM 8.0 and onwards). That will come in update version 3.0.

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  • Transportation lanes are a critical piece of master data in TM and APO (TPVS) In the context of transportation planning a lane governs things like (but, not restricted to): What types of vehicles and modes are available for a move – Means of Transport How long it takes to get to the destination – Duration What the distance is between origin and destination – Distance What carriers can be used What methods can be used to determine the carrier(s) (Carrier/ TSP selection strategies)
  • Lanes have a hierarchical structure: Lane header – There is practically no other significant data at the lane header level apart from origin, destination and validity MOT Level – At this level the means of transport are assigned. And, there are quite a few control parameters assigned at this level (TSP selection strategy being one of them) Carrier level – At each MOT one or more carriers can be assigned (also, it is possible to assign no carrier on an MOT in which case the lane can be used for optimization but, not carrier selection). At this level carrier costs (if desired) and carrier properties can be maintained.
  • Transcript

    • 1. Transportation Lanes in TM and APO Version 2.0
    • 2. Content
      • Transportation lane overview
      • Transportation lane design
      • Carrier cost and priorities
    • 3. Lane Overview Somerset, NJ Paresh Bhagwatkarc PA1 PA2
    • 4. Structure of Transportation Lane Shipping Point US01 > PA1 TL LTL Std. Bulk Truck SNBO QLTY SVTN Lane Header Means of Transport (MOT) Carrier Paresh Bhagwatkar
    • 5. Transportation Lane Design Paresh Bhagwatkar
    • 6. Key lane design considerations
      • Lane granularity
      • Transportation zone design
        • Regional zones
        • Grouping of shipping points in zones
      • MOT granularity
      • Carrier selection parameters
    • 7. Granularity of Lanes Paresh Bhagwatkar Point-to-Point Point-to-Point Point-to-Point Point-to-Point Zone-Zone Point-to-Zone Point-to-Zone Type SPFPT1 > PLT1 Plant Shipping point US-FRPT > US-PA1 Customer Shipping Site (zone) SPFPT1 > C12345 Customer Shipping point Example Destination Origin US-FRPT > PLT1 Plant Shipping Site (zone) US-TX1 > US-PA1 Transportation Zone Transportation Zone US-FRPT > US-USAPA1 Transportation Zone Shipping Site (zone) SPFPT1 > US-PA1 Transportation Zone Shipping point
    • 8. Lanes from a Site and Shipping Point(s) Plant 1 Plant 2 Plant 3 Site Freeport, TX Plant 4 Customer or Zone Point-Zone Zone-Zone Paresh Bhagwatkar
    • 9. Key Points
      • Zone Assignment
        • In TM zone is determined in TM (using postal code, zone, etc)
        • In APO - Zone is assigned in the customer address from ERP
      • In addition to lane selection and lane granularity, compatibilities and incompatibilities also come into play
      Paresh Bhagwatkar
    • 10. Sequence of Lane Search Paresh Bhagwatkar Customer Shipping point Point-to-Point 1 Customer Shipping Site (zone) Point-to-Point 2 5 4 3 Sequence Destination Origin Type Transportation Zone Transportation Zone Zone-Zone Transportation Zone Shipping Site (zone) Point-to-Zone Transportation Zone Shipping point Point-to-Zone
    • 11. Lane Overview Somerset, NJ Zone NJ Cust 1 Cust 2 Cust 3 Paresh Bhagwatkar Zone PA1 Zone PA2
    • 12. Best Practices for Lane Definition
      • Point-Point Lanes
        • Usage
          • High volume between certain plants/ points
          • Carriers give discount on a point to point basis based on volume or other reason
        • Considerations
          • More data maintenance
      • Point-Zone Lanes
        • Usage
          • Customers strewn across region
          • No specific customer has especially high volume
          • No appreciable discounts on point-point basis
        • Considerations
          • Lower data maintenance
      • Zone-Zone Lanes
        • Usage
          • Good to have as catch all in case lanes are missing
          • Customers with very sporadic orders may not warrant maintaining lane from Point to Zone
          • Some companies may be able to rely totally on zone-zone lanes
      Paresh Bhagwatkar
    • 13. Carrier Cost and Priorities Paresh Bhagwatkar
    • 14. Carrier Cost and Priority
      • Carrier selection can be based on various combinations of cost and priority
      • Carrier selection strategy
        • Maintained on MOT level of lane
        • Drives which combination of cost and priority is used
      • Carrier level of lane has
        • Cost
        • Priority
      • Cost
        • Costs maintained on lane
        • Costs retrieved from ERP system
        • Costs calculated in TM
      • Priority
      Paresh Bhagwatkar
    • 15. Carrier Selection Strategy and System Behavior Paresh Bhagwatkar Used as a tie-breaker when carriers tie at cost System gets cost for each carrier Priority is mathematically added to cost Resulting number is used for sorting in increasing order Cost + Priority Used when service is much more important than cost. Priority is used as a magnifier of differences in cost. System gets cost for each carrier Cost and priority are mathematically multiplied Resulting number is used for sorting in increasing order Cost * Priority Used when service is most important and cost is not a consideration Carriers from lane ranked in increasing order of priority (Priority 1 being high) Priority (only) Used when lowest cost carrier is desired Carriers from lane ranked in increasing order of cost Cost (only) No real applicable scenario Carriers from lane ranked in the order of maintenance of lane Neither Cost Nor Priority Usage System Behavior Carrier Selection Strategy (on MOT level)
    • 16. TSP Selection Strategy - Neither Cost Nor Priority Lane Data TSP Selection Result $1000 2 Swift $1200 1 Celadon Trucking $1000 4 CH Robinson $1100 3 Schneider National Cost Determined During TSP Selection Priority on lane Carrier Swift 4 3 2 1 Rank Celadon Trucking CH Robinson Schneider National Carrier
    • 17. TSP Selection Strategy - Cost (only) Lane Data TSP Selection Result $1000 2 Swift $1200 1 Celadon Trucking $1000 4 CH Robinson $1100 3 Schneider National Cost Determined During TSP Selection Priority on lane Carrier $1200 $1100 $1000 $1000 Calculation Result (Cost) Celadon Trucking Schneider National Swift CH Robinson Carrier 4 3 2 1 Rank Comes after CHR because of the order of maintenance in the lane Summary
    • 18. TSP Selection Strategy - Priority (only) Lane Data TSP Selection Result $1000 2 Swift $1200 1 Celadon Trucking $1000 4 CH Robinson $1100 3 Schneider National Cost Determined During TSP Selection Priority on lane Carrier CH Robinson 4 4 3 2 1 Rank Schneider National 3 Swift 2 Celadon Trucking 1 Carrier Calculation Result (Priority)
    • 19. TSP Selection Strategy – Cost + Priority Lane Data TSP Selection Result $1000 $1200 $1000 $1100 Cost Determined During TSP Selection 1002 2 Swift 1201 1 Celadon Trucking 1004 4 CH Robinson 1103 3 Schneider National Cost + Priority Priority on lane Carrier Celadon Trucking Schneider National CH Robinson Swift Carrier 1201 4 3 2 1 Rank 1103 Priority used as tiebreaker 1004 Priority used as tiebreaker 1002 Comment Calculation Result (C+P)
    • 20. TSP Selection Strategy – Cost Times Priority Lane Data TSP Selection Result $1000 $1200 $1000 $1100 Cost Determined During TSP Selection 2000 2 Swift 1200 1 Celadon Trucking 4000 4 CH Robinson 3300 3 Schneider National Cost * Priority Priority on lane Carrier CH Robinson Schneider Swift Celadon Carrier Though CHR is low cost they come last 4000 4 3 2 1 Rank 3300 Swift comes second though they are lowest cost 2000 1200 Comment Calculation Result (C+P)
    • 21. Other “tweaks”
      • Cost + Priority – Spacing out priorities
        • Possible to space out priority so that effect of priority is more for closely costed carriers
        • Use when small cost differences should take less effect on TSP selection
      • Priority Only – Maintaining in steps
        • Priorities maintained in steps of 10, 20, 50 or 100
        • Use when there is an anticipation that later another carrier may be placed between two existing carriers in the “gap”
    • 22. Tweak: Cost + Priority – Spacing Out Priorities Lane Data TSP Selection Result Exaggerated Example $1010 $1200 $1000 $1100 Cost Determined During TSP Selection 1210 200 Swift 1300 100 Celadon Trucking 1400 400 CH Robinson 1400 300 Schneider National Cost * Priority Priority on lane Carrier CH Robinson Schneider Celadon Swift Carrier 1400 4 3 2 1 Rank 1400 1300 Swift costed marginally more than CHR. If priorities were maintained in steps of 1 CHR would have been chosen 1210 Comment Calculation Result (C+P)
    • 23. Contact
      • Paresh Bhagwatkar
        • [email_address]
        • 973-495-9913
      • This document may be used without any permission, but, with attribution in whole or part, with or without changes, and for any commercial or non-commercial purpose (under the creative commons “CC by 3.0” license)