shipping optimization in r12 with oracle transportation

Ingersoll Rand Shipping Optimization in R12 with Oracle Transportation Management

Miroslav Samoylenko, ERP Technical Lead March 12, 2015

2 Shipping Optimization in R12 with OTM Ingersoll Rand is 143 years old.

Founder: Simon Ingersoll -- patented the steam-powered rock drill in 1871.

3 Shipping Optimization in R12 with OTM


Shipping Business Model

•  Customers place orders with Ingersoll Rand

•  Factories and warehouses fulfill customer orders

•  Chartered carriers ship the ordered equipment to the customers

•  Ingersoll Rand does not maintain its own fleet


Shipping Model: DSO

•  Dealer Sales Offices are warehouses serving local dealers

•  Low to moderate transaction volume •  Limited number of customers •  Preplanned deliveries


Shipping Model: Regional Warehouse

•  Super warehouses serving an entire region

•  High volume of transactions

•  High number of customers

•  Bulk planned shipments


Software Footprint

•  Single global instance of Oracle eBusiness Suite 12.1.3 runs all back office operations

•  Single global instance of Oracle Transportation Management 6.2.7 plans all shipments


Standard R12/OTM Integration


Standard R12/OTM Integration

•  API for data manipulation •  Staging tables •  Integrated interface flags R12 • GLOG Transformations •  PL/SQL Calls Fusion •  Agents •  Saved Queries •  XML Profiles OTM


Shipping Execution with OTM


Standard Integration Restrictions

• Deliveries are created in R12 before they are planned in OTM R12

• One delivery can ride only on one trip R12/OTM

• An order release cannot be split between trips OTM


Optimization Targets

•  Truck Utilization

•  Shipping Network Optimization


Standard R12 to OTM Data Model

•  R12 sales order line for 10 each becomes one delivery line

•  R12 delivery line for 10 each becomes a single ship unit in OTM

R12 OTM

Delivery Order Release

Delivery Line (sales order line)

Order Release Line

Delivery Line (container)

Ship Unit

Unpackaged Delivery Line (sales order line)

Ship Unit


Use Case

•  Ten Twikenham hotels order 10 Ingersoll Rand products each


Truck Utilization Air Conditioner Air Compressor Large Air

Compressor % of truck per unit

1% 4% 6%

% of truck per delivery

10% 40% 60%

# of trucks produced

1 5 10

Truck utilization produced

100% 80% 60%

Optimal # of trucks

1 4 6/1

Optimal utilization

100% 100% 96%


Truck Utilization Opportunity

0

20

40

60

80

100

120

Case 1 Case 2 Case 3

Order Size Std Utilization Opt Utilization


Shipping Network Optimization

Shipping Rates •  Quartermaster Lines

-  Small truck: $20/trip

•  19 Wheelers Lines -  Full truck: $80/trip

Sales Order •  10 air compressors •  1 air compressor

occupies 3% of truck

Standard Optimal # of truck 1 2 LTL Truck utilization 30% 60% Freight cost $80 $40


Summary

•  Standard Oracle eBusiness Suite to Oracle Transportation Management Integration produces optimal shipments when weight and dimensions of an individual delivery are significantly smaller than the capacity of the vehicle which transports it


Opportunity

Where does it fit IR? •  Dealer Sales Offices

and Small Parts Warehouses

•  LTL, parcel •  Delivery splitting/bulk

planning not needed

Where does it not fit IR? •  Regional Warehouses •  TL •  Consolidation, multi-

stop, deconsolidation pool, multiple equipment

•  Bulk planning


How to Achieve Optimization?

Input Output OTM has all information necessary to produce an optimal shipping network

It is OTM which should drive the decision to form a delivery

Optimization requires smallest possible shipping units

Rethink mapping of shipping units between R12 and OTM


Key Redesign Restrictions

•  Use standard integration APIs and functionality

•  Delivery rides on one and only one trip in R12

•  Smallest shipping unit in R12 is delivery line

•  Need a delivery in R12 to interface data to OTM


One Delivery on One Trip

•  Ingersoll Rand recognizes revenue when the first leg of a shipping network is ship confirmed

•  Only the first leg of a shipping network produced by OTM becomes a trip in R12


Redefinition of Shipping Unit

•  Do not split delivery lines by base quantity

•  Record individual shipping units for a delivery line in a custom table

•  Define shipping units based on custom logic


Deliveries and Order Releases

•  R12 needs to form a delivery to interface delivery line information to OTM

•  It is OTM which decides how to form a delivery


Redesigned Interface Zig Zag

•  Dummy delivery wraps a delivery line for the purpose of interfacing it to OTM

•  Dummy delivery produces a splittable order release in OTM



•  OTM optimally plans the shipments

•  Only the first leg of a shipping network is interfaced to R12

•  Inbound interface rearranges deliveries to meet API restrictions



•  Rearranged deliveries are synchronized back to OTM

•  R12 and OTM now have identical snapshot of deliveries/order releases


Key Integration Change

•  Upon trip creation the dummy deliveries are rearranged in the way they should have been created in the first place to produce the generated shipping network

•  Deliveries are consolidated in R12 by trip stops based on OTM planned shipments


Optimal Shipping Execution with OTM


Cost Savings

•  Improved interface increased truck utilization by 10%

•  Implementation cost recovered within the first year of operation


What is Next?

•  Continue deploying the solution to warehouses in Europe and North America

•  Concentrate on tuning master data

•  Eliminate manual trip planning

shipping optimization in r12 with oracle transportation

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