| Status | Approved |
| Owner | VAN OS-ext, Nico |
| Stakeholders | Najaite Nidboufker |
Issue
A Geographic Information System (GIS) provides GEO location coordinates for locations, it can calculate real life transportation distance and duration between locations, and provides visual representation on a map for routes. This data is necessary for the following business functions:
Charge Calculation - For a small number of shipments charges are calculated based on actual distance. With GIS this distance can be determined automatically. This makes the charge calculation automatic. Also, the distance returned by GIS can be compared with the distance as provided by the carrier. This can then be challenged if the discrepancies are too big.
Milk run validation - During manual planning a milk run can be created. The milk run can be validated with actual travel duration, loading and unloading duration, and maximum number of working hours for the driver. Users can then more precisely determine if a normal delivery can be turned into a milk run. Potentially increase the number of milk runs planned and ordered.
Automatic planning - To implement automatic planning that includes milk run planning, actual transportation duration is essential. Similar as with milk run validation, the system has to determine actual durations to be able to generate correct milk run planning results.
Sustainability - For CO2 reporting it is necessary to have the actual distance travelled.
Recommendation
Background & Context
Technical Background
There are three main functions in SAP TM where a Geographic Information System (GIS) is being called:
Location Master Data creation
Distance and Duration Determination
Visualisation
Location Master Data creation
During the creation of Location Master Data, the system stores the geographical data of the location. On default the system is taking country code level coordinates as stored in the system. When GIS server integration is activated, then the system will pass the address data to the GIS server which will return the geographical coordinates based on this address data.
Distance and Duration Determination
There two main processes where distance and duration is being determined;
Freight Order creation
Optimizer Planning
The system doesn't execute a call to the GIS server for each determination. Instead the system will check the buffer table first: Distance and Duration Determination table (DDD). When the combination between two locations is unknown, then the system will do a call to the GIS server to determine distance and duration. Once received, the system will store the result in the buffer table.
Visualisation
With the use of SAP Visual Business, a visual representation on a map can be displayed in the Freight Order and Transportation Cockpit.
Business Benefits
Charge Calculation
Where charges are calculated based on actual distance, when the system has determined the actual distance based on a GIS result, the system can automatically calculate the correct charges. This calculated amount can be used for validating the invoice. When there are large discrepancies, the carrier can be challenged to justify the difference.
Milk run validation
During manual planning a milk run can be created. The milk run can be validated with actual travel duration, loading and unloading duration, and maximum number of working hours for the driver. Users can then more precisely determine if a normal delivery can be turned into a milk run. Potentially increase the number of milk runs planned and ordered.
Automatic planning
To implement automatic planning, actual transportation duration is essential. Similar as with milk run validation, the system has to determine actual durations to be able to generate correct milk run planning results.
Sustainability reporting
The Corporate Sustainability Reporting Directive (CSRD) strengthens the rules concerning the social and environmental information that companies have to report. The rules ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues. Companies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS).
With actual distances in the system, Syensqo will better capable to have accurate CO2 reporting and it will be easier to comply with the CSRD.
Sustainability in planning
When optimizing transportation planning, CO2 impact can be taken into account by preferring more sustainable routes and means of transport in the transportation network.
Assumptions
Charge Calculation
Most agreements with carriers are based pick-up and delivery location. However, when milk run orders are provided then these kind of charges are not applicable and charges need to be calculated per (additional) stop and milage.
Most freight agreements are setup with pick-up and delivery location, due to limitations on charge calculation capabilities at shipper.
Agreements in North America are more prone to be calculated based on milage. When North America is scoped for SAP Transportation Management then correct distance determination is important. For more detail on North America scope see TM KDD Way Forward with BluJay.
Number of milk run orders
As part of transportation optimization, Syensqo would like to increase the number of milk run orders as they have a cost benefits.
Automatic planning
Transportation planning is mostly a manual process within Syensqo, however for a future proof system automatic planning could be considered within the current scope of the ERP Rebuild project, or as a future improvement.
Sustainability
Not only does Syenqo would like to comply with CSRD regulations, it is part of Syensqo's strategy to have a positive impact on climate and nature. Optimizing transportation capacity and reducing CO2 emissions fit into that strategy.
Constraints
n/a
Impacts
GIS server is a 3rd party license. There are several companies providing this service.
Implementing a GIS server takes about 10-15 consulting days.
Business Rules
n/a
Options considered
Yes or No decision. No options to consider.
Evaluation
Visual representation in transportation planning is a really nice feature to have. It can change the experience that a user has with the system, but ultimately this is a nice to have.
If Syensqo would do milk run planning, then proper distance and duration calculation would be really beneficial. However, there is no indication yet that Syensqo engages in this kind of planning process.
For road freight it is not unusual to have charge calculation based on distance. If there are agreements within Syensqo that have this basis, then GIS integration is very helpful.
Workflow history
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