SAP Track and Trace Solution – Part 1: Outbound Logistics

Most organizations deal with the shipment of goods into and out of their premises — in other words, inbound and outbound logistics. With the increasing demand for a better customer experience, it is a challenge to provide a high level of customer service when parts of your supply chain fall somewhat outside of your “sphere of influence.” Sure, through contractual obligations, you can try and force your suppliers and carriers to behave in a certain way, but as the old saying goes, “stuff happens!” If the supply chain breaks down outside of your four walls, are you aware of it? Do you have enough time between when you find out about the issue and the time needed to correct it? Do these issues in the supply chain cause disruption and potentially lead to lost customers and sales?

The key to remedying this issue was discussed back in the 1990s and termed “Supply Chain Event Management” – Give me the ability to monitor the events occurring throughout my supply chain as and when they occur; let me measure these events against what I had expected to occur, and if it differs in any way, let me know so that I can take proactive measures to correct it. SAP was a part of the “think tank” that coined the term “Supply Chain Event Management” and created the product SAP Event Management to provide this Track and Trace functionality. It went into general availability in 2004, so it has been around rather a long time.

SAP Track and Trace
In this article, I want to describe how SAP Event Management (EM) forms the backbone of your Track and Trace requirements and then specifically focus on the outbound logistics scenario. Firstly, let me describe what Track and Trace is and how it relates to my issue described above.

Track refers to providing me the status of my goods that I am tracking at this point in time. It allows me to answers such questions as: Who has my goods now? Where are my goods? What status are my goods in? When will my goods arrive? Is the person currently in possession of my goods allowed to be in possession of them?
Trace refers to providing me with the historical view of my goods in terms of where they have been, who has handled them, what statuses they have gone through and so forth. It allows me to answer such questions as: Where were my goods manufactured? Who has handled these products to date? Have my goods ever gone in to an “exception” status? Were are the people that worked with my goods authorized and allowed to do so?

Outbound Logistics
In the next article, I will discuss the inbound logistics process, but for now let me describe the outbound logistics scenario.

With regard to the above diagram, a sales representative fields a call from the customer and enters the sales order into SAP ECC using transaction VA01 (Note: A sales order can be entered in many ways, including an EDI 850 ORDERS message). On saving the sales order, an event handler (EH) is created in SAP Event Management in order to track the sales order’s status. From that point on, any changes to the sales order are accordingly reflected against the SAP EM EH so that anyone monitoring the sales order will also receive those updates.

Once the sales order is complete and ready for fulfillment, the outbound delivery is created. At this time, an EH is created in SAP EM in order to track the delivery’s status. Note that the delivery EH and the sales order EH are linked with each other much like the two documents are linked via document flow in SAP ECC. When the outbound delivery is picked and packed, it gets assigned a tracking number/s just prior to shipping the product. The tracking number is used to create a tracking number EH in SAP EM in order to monitor the tracking number status going forward. Note that the tracking number EH is linked to the outbound delivery EH, allowing for complete upward and downward navigation from any of the applicable documents (sales order, delivery, tracking number).

Once the carrier makes the first scan against that tracking number/s, we will receive a notification from them stating that this event had occurred, e.g. pickup. Carriers typically provide an EDI 214 carrier status notification message to give this detail. When we get the EDI 214, we typically use a translation tool (e.g. SAP NW PI) to convert it into an EVMSTA IDoc and have it posted to SAP EM. Each 214 is posted against the corresponding tracking number EH, and the status updated accordingly.

You can see that we can get full visibility for the supply chain members from the sales orders, through delivery and into the carrier status notification.

Suggested value-adds to the process would include:

Create an expected event for “pickup” on the delivery EH: The pickup event would be used to ensure that we actually get an event for this tracking number, otherwise we have “lost” a tracking number somewhere.
Create an expected event for “delivered” on the delivery EH: The delivered event has the promised delivery date and can be used to check whether a carrier is executing according to the plan. If the Delivered event goes overdue without being received, then the customer can be warned that the delivery is running late – improved customer service.

Implementing Track and Trace
There are several factors to consider when planning to implement a track-and-trace solution when using SAP EM combined with EDI:

The warehouse must be able to provide a good tracking number per carton they are packing.
The carrier must have the ability to electronically tell us about the status of a tracking number.
Sales order, delivery and tracking numbers need to be tracked in SAP EM: Stick as close to a standard implementation as possible.
Plan your SAP Track and Trace solution with reporting and analytics in mind.
Be sure to accommodate for “unpacking” and “re-evaluating” of expected events in your design.
If you are considering enabling pro-active alert notifications for exception messages, then ensure that your baseline master data driving these alerts is of a very high standard: Otherwise you will be spammed.

My next article will be on inbound SAP Track and Trace, but for now please feel free to leave any comments.

SAP Track and Trace Solution – Part 1: Outbound Logistics

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