Shipping consignment from one point to another can be one of the costliest aspects of a supply chain. More so with expanding distance between the buyer, market, products’ point of origin, adds to the complexities of long supply chains.
Added to this are the challenges to manage different modes of transportation and optimum packaging for each.
The transportation cost as such can add anything up to 50% of the total shipping cost!
Importance of correct Package Building
Using a correct packaging for the consignment to be shipped matters and positively affects any business’s bottom-line. Consider this fact – packaging goods for shipment via rail drastically differs from packaging goods for shipment via road. Inability to execute correct shipment packaging increases space utilization and reduces the efficiency of the transportation mode being used.
SAP Transportation Management (SAP TM) provides multiple functionalities to plan optimum shipment to reduce transportation costs. It encompasses scheduling, freight tendering, carrier selection, package building, etc. It helps to overcome various day-to-day transportation challenges across the supply chain.
In this blog, we will focus on package building aspect, which is an optional yet a crucial manual planning solution to mitigate the below enlisted major challenges, leading to transportation cost escalation.
- Disparity between product orders and truck planning: When planning end-to-end transportation, a typical yet crucial challenge arises regularly. Product ordered by customers are diverse in terms of – quantity, dimension, weight, type (liquid, solid, etc), whereas the products transported via road are in pallets or containers, which needs to be optimally loaded in the truck. As such, a huge challenge arises in load planning of pallets due to mixed nature of products.
- Inconsistent package information across SAP landscapes: An end-to-end shipping process includes – ORDER CREATION in SAP ERP, PLANNING OF FREIGHT in SAP TM, and DELIVERY PROCESSING in SAP EWM. Availability of package building & loading details prior to package landing in warehouse is desirable. Since packaging is a warehouse activity, in the above-mentioned scenario, execution of this activity gets challenging & cumbersome across the SAP landscape.
Package Building Benefits
Implementation of SAP TM Package Building feature (as depicted in the figure below), mitigates the above mentioned challenges with following key benefits while reducing transportation costs:
- Usage across all SAP landscapes like – SAP TM, SAP ERP, and SAP EWM.
- Optimized loading plan of packages/pallets
- Critical constraint planning related to carrier/truck’s axle load limitation
- Improved planning of packages’ physical location in truck/trailer
- Capability to combine same/different products in one package.
- Systematized collation of package attributes like stacking factor, dimensions, weight, etc., accessible by package builder to build packages correctly
How can Krypt help you?
KRYPT as an SAP preferred partner has assisted in the success of global businesses private & public, implementing SAP TM, GTS, IBP & EWM.
If you are facing challenges and wish to improve your transportation while reducing the costs, we can help you implement this cost-saving feature of SAP TM.
To know more about our products/services, please request a DEMO or do contact us.
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