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***Comments Appreciated*** 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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© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission
Paresh Bhagwatkar
Transportation Lanes in TM and APO
Version 2.0
Paresh Bhagwatkar
Content
Transportation lane overview Transportation lane design Carrier cost and priorities
Paresh Bhagwatkar
Lane Overview
Somerset, NJ
PA1PA2
Paresh Bhagwatkarc
Paresh Bhagwatkar
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
© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission
Paresh Bhagwatkar
Transportation Lane Design
Paresh Bhagwatkar
Paresh Bhagwatkar
Key lane design considerations
Lane granularity Transportation zone design
• Regional zones
• Grouping of shipping points in zones
MOT granularity Carrier selection parameters
Paresh Bhagwatkar
Granularity of Lanes
Type Origin Destination Example
Point-to-Zone Shipping point Transportation Zone
SPFPT1 > US-PA1
Point-to-Zone Shipping Site (zone)
Transportation Zone
US-FRPT > US-USAPA1
Zone-Zone Transportation Zone
Transportation Zone
US-TX1 > US-PA1
Point-to-Point Shipping point Customer SPFPT1 > C12345
Point-to-Point Shipping Site (zone)
Customer US-FRPT > US-PA1
Point-to-Point Shipping point Plant SPFPT1 > PLT1
Point-to-Point Shipping Site (zone)
Plant US-FRPT > PLT1
Paresh Bhagwatkar
Paresh Bhagwatkar
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
Paresh Bhagwatkar
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
Paresh Bhagwatkar
Sequence of Lane Search
Sequence Type Origin Destination
1 Point-to-Point Shipping point Customer
2 Point-to-Point Shipping Site (zone)
Customer
3 Point-to-Zone Shipping point Transportation Zone
4 Point-to-Zone Shipping Site (zone)
Transportation Zone
5 Zone-Zone Transportation Zone
Transportation Zone
Paresh Bhagwatkar
Paresh Bhagwatkar
Lane Overview
Somerset, NJ
Zone NJ
Zone PA1
Zone PA2
Cust 1Cust 2
Cust 3
Paresh Bhagwatkar
Paresh Bhagwatkar
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
© Paresh Bhagwatkar, 2011May be used in whole or part with attribution and without permission
Paresh Bhagwatkar
Carrier Cost and Priorities
Paresh Bhagwatkar
Paresh Bhagwatkar
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
Paresh Bhagwatkar
Carrier Selection Strategy (on MOT level)
System Behavior Usage
Neither Cost Nor Priority Carriers from lane ranked in the order of maintenance of lane
No real applicable scenario
Cost (only) Carriers from lane ranked in increasing order of cost
Used when lowest cost carrier is desired
Priority (only) Carriers from lane ranked in increasing order of priority (Priority 1 being high)
Used when service is most important and cost is not a consideration
Cost + Priority System gets cost for each carrier
Priority is mathematically added to cost
Resulting number is used for sorting in increasing order
Used as a tie-breaker when carriers tie at cost
Cost * Priority System gets cost for each carrier
Cost and priority are mathematically multiplied
Resulting number is used for sorting in increasing order
Used when service is much more important than cost.
Priority is used as a magnifier of differences in cost.
Carrier Selection Strategy and System Behavior
Paresh Bhagwatkar
Paresh Bhagwatkar
Carrier Priority on lane Cost Determined During TSP Selection
Schneider National 3 $1100
CH Robinson 4 $1000
Celadon Trucking 1 $1200
Swift 2 $1000
Rank Carrier
1 Schneider National
2 CH Robinson
3 Celadon Trucking
4 Swift
Lane Data
TSP Selection Result
TSP Selection Strategy - Neither Cost Nor Priority
Paresh Bhagwatkar
Carrier Priority on lane Cost Determined During TSP Selection
Schneider National 3 $1100
CH Robinson 4 $1000
Celadon Trucking 1 $1200
Swift 2 $1000
Rank Calculation Result (Cost)
Carrier Summary
1 $1000 CH Robinson
2 $1000 Swift Comes after CHR because of the order of maintenance in the lane
3 $1100 Schneider National
4 $1200 Celadon Trucking
Lane Data
TSP Selection Result
TSP Selection Strategy - Cost (only)
Paresh Bhagwatkar
Carrier Priority on lane Cost Determined During TSP Selection
Schneider National 3 $1100
CH Robinson 4 $1000
Celadon Trucking 1 $1200
Swift 2 $1000
Rank Calculation Result (Priority)
Carrier
1 1 Celadon Trucking
2 2 Swift
3 3 Schneider National
4 4 CH Robinson
Lane Data
TSP Selection Result
TSP Selection Strategy - Priority (only)
Paresh Bhagwatkar
Carrier Priority on lane
Cost Determined During TSP Selection
Cost + Priority
Schneider National 3 $1100 1103
CH Robinson 4 $1000 1004
Celadon Trucking 1 $1200 1201
Swift 2 $1000 1002
Rank Calculation Result (C+P)
Carrier Comment
1 1002 Swift Priority used as tiebreaker
2 1004 CH Robinson Priority used as tiebreaker
3 1103 Schneider National
4 1201 Celadon Trucking
Lane Data
TSP Selection Result
TSP Selection Strategy – Cost + Priority
Paresh Bhagwatkar
Carrier Priority on lane
Cost Determined During TSP Selection
Cost * Priority
Schneider National 3 $1100 3300
CH Robinson 4 $1000 4000
Celadon Trucking 1 $1200 1200
Swift 2 $1000 2000
Rank Calculation Result (C+P)
Carrier Comment
1 1200 Celadon
2 2000 Swift Swift comes second though they are lowest cost
3 3300 Schneider
4 4000 CH Robinson Though CHR is low cost they come last
Lane Data
TSP Selection Result
TSP Selection Strategy – Cost Times Priority
Paresh Bhagwatkar
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”
Paresh Bhagwatkar
Carrier Priority on lane
Cost Determined During TSP Selection
Cost * Priority
Schneider National 300 $1100 1400
CH Robinson 400 $1000 1400
Celadon Trucking 100 $1200 1300
Swift 200 $1010 1210
Rank Calculation Result (C+P)
Carrier Comment
1 1210 Swift Swift costed marginally more than CHR. If priorities were maintained in steps of 1 CHR would have been chosen
2 1300 Celadon
3 1400 Schneider
4 1400 CH Robinson
Lane Data
TSP Selection Result
Tweak: Cost + Priority – Spacing Out Priorities
Exaggerated Example
Paresh Bhagwatkar
Contact
Paresh Bhagwatkar• [email protected]• 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)