Plan Complex Shipments Using Transportation Leg Planning
- by Sachidanand Padgaonkar, SAP Senior Consultant, Infosys Technologies, Ltd.
- July 1, 2006
Learn a step-by-step procedure for configuring transportation legs across the supply chain, planning for these shipments, and determining the costs involved with a real-life example. Even though transportation leg planning is well integrated with various SAP modules, in most companies this activity is handled in bits and pieces by the logistics, sales, and finance teams. This overview consolidates the tasks to provide an understanding of the entire process.
Leg planning is a major part of planning out a shipment from a source to destination location. Leg planning resides within the transportation component of Sales & Distribution. It takes into account deliveries, which are part of the sales order and delivery component of SD. Often you’ll need to split your shipment into multiple legs. Leg planning functionality enables you to organize transport more effectively, select proper logistics service providers, prepare shipment papers, and ascertain shipment costs.
Transportation planning must be complete and accurate before a shipment leaves the point of departure. This
includes organizing the means of transport, specifying the route, and defining the stages of the route in the most
efficient way. SAP’s leg transportation functionality helps in planning, tracking, and controlling shipments and the
I'll demonstrate it with the example of a company with warehouses in San Jose, San Francisco, and Oakland that
plans to ship its product to customers in New York, Washington, and New Jersey. It includes multiple modes of transport:
from the San Jose, San Francisco, and Oakland warehouses to the San Francisco harbor (by truck); from the San Francisco
harbor to the New York harbor (by ship); and from the New York harbor to customers in New York, Washington, and New Jersey
(by truck). This requires what is known in transportation planning as a segmented delivery.
Even though I use SAP 4.7 Enterprise as my frame of reference, the concepts hold true for all earlier and later
versions, including mySAP ERP Central Component (ECC).
My example company appoints a transportation agent for shipment. It prepares shipment papers at the port of origin
(San Francisco) and port of entry (New York) according to applicable shipping terms. Each of the shipment legs involves
different costs, some borne by the shipping party and some by the end consumer. They include costs associated with
insurance, cleaning, and customs in addition to transportation costs. The end consumer in my example is a person who
receives the final shipment of goods in New Jersey. SAP R/3 provides a mechanism, known as transportation planning, which
allows you to plan different legs during a shipment and arrive at best possible approach.
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