Small parcel packing exception monitoring

a member of The Business Maturity Group

Small Parcel Packing Exception Monitoring

Utilizing SAP ECC Packing integrated with SAP Event Management

A Q Data USA Demo!!!


INCREASED COST FOR SMALL PARCEL SHIPMENTS

Why are we having this discussion?

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Small Parcel Rate Change

Why are we having this discussion?UPS and FedEx have both announced that they will be extending a rate hike effective December 29, 2014 for UPS and January 1, 2015 for FedEx. Both carriers will impose dimensional weight (DIM) pricing on all ground packages. Currently these carriers only apply DIM pricing to ground packages measuring three cubic feet or greater.


Mitigate the Risk / Impact

WHAT CAN WE DO TO MINIMIZE THE IMPACT?• Evaluate the efficiency of your packing process

– Maximize space utilization for every package– Match product volume / requirements with package

• Audit the current process and status– Assess the impact that the rate adjustment will have

• Implement Software to monitor the situation– Monitor packing efficiency– Reroute non-compliant packages for re-packing

• Don’t incur the increased cost (operational impact)– Perform post-process analysis to address inefficiencies

through change management and education• Incur the increased cost but reduce it over time (less operational impact)


THE SAP BASED SOLUTIONIntegration of SAP packing and SAP Event Management

1. Master Data – SAP ECC2. Transactions – SAP ECC3. Exception Management

and Monitoring - SAP EM

A Q Data USA Solution!!!


The Components of the Solution

• Master Data in SAP ECC– Material Master– Packing Materials

• Transactions in SAP ECC– Delivery Packing

• Transactions in SAP EM– Packing utilization visibility

• Cost Impact Analysis


MASTER DATAGood Data is the key to Efficiency


Products

• Protein Shake (Material: 2057)– Weight: 19 Oz (1.19lbs)– Dimensions:

• Height: 7”• Width: 4”• Length: 4”• Volume: 112 Cubic Inches (“3)• UPS DIM Weight: 0.67lbs

• Shaker (Material: 2058)– Weight: 12 Oz (0.75lbs)– Dimensions:

• Height: 9”• Width: 4”• Length: 4”• Volume: 144 Cubic Inches (“3)• UPS DIM Weight: 0.87lbs

Ensure correct master data!!!


• Carton: Large– Weight: 1lb , UPS DIM Wgt: 16.53lbs => 17lbs– Dimensions:

• Length: 14”, Height: 14”, Width: 14”• Volume: 2,744 Cubic Inches

• Carton: Medium– Weight: 0.5lb , UPS DIM Wgt: 11.57lbs => 12lbs– Dimensions:


• Carton: Small– Weight: 0.5lb , UPS DIM Wgt: 7.81lbs => 8lbs– Dimensions:


18x12x6 Carton

14x14x14 Carton

10x12x16 Carton

Packaging

Use accurate Handling Units


TRANSACTIONSLetting the system do the work…


Sales Order 1

Weight: 715 Oz (44.7 lbs)Volume: 5,680 Cubic Inches

25 x shakes

20 x shakers

Weight: 715 Oz (44.7 lbs.)Volume: 5,680 Cubic Inches


Create Delivery 1


25 x shakes

20 x shakers


Pack Delivery 114x14x14 CartonPacked in to 3

Large Cartons

Carton 3

Carton 2

Carton 1

1

2

3

Must use Handling Unit Management


32

Check Compliance

1

10.5% Utilization

98% Utilization 98%

Utilization

Exception Management

SAP EM Compliance Checking


PACKING EFFICIENCYIf you knew what you knew now would you pack differently?



Sales Order 2

25 x shakes

20 x shakers


Create Delivery 2


25 x shakes

20 x shakers


Pack Delivery 214x14x14 Carton

18x12x6 Carton

10x12x16 Carton

Packed in to 3 Cartons (S,M,L)

Carton 3 (M)

Carton 2 (S)

Carton 1 (L)

1

2

3


Check Compliance

1 23

98% Utilization

98% Utilization 90%

Utilization

No pack exceptions

SAP EM Compliance Checking


COST SAVING?Time to do the math


Side by Side Comparison - UPSDelivery 1• Weight: 715 Oz (44.7 lb)• Volume: 5,680 Cubic Inches• Package 1 (Large):

– Weight: 456 Oz (29 lb)– Volume: 1.59 (FT3)– Dimensional weight: 17 lb– Zone 5 cost: $18.07 (weight)

• Package 2 (Large):– Weight: 216 Oz (15.2 lb)– Volume: 1.59 (FT3)– Dimensional weight: 17lb– Zone 5 cost: $12.25 (dim weight)

• Package 3 (Large):– Weight: 24 Oz (2 lb) - $8.05– Volume: 1.59 (FT3)– Dimensional weight: 17 lb– Zone 5 cost: $12.25 (dim weight)

• EXTRA: $4.20

Delivery 2• Weight: 715 Oz (44.7 lb)• Volume: 5,680 Cubic Inches• Package 1 (Large):

– Weight: 456 Oz (29 lb)– Volume: 1.59 (FT3)– Dimensional weight: 17lb– Zone 5 cost: $18.07 (weight)

• Package 2 (Medium):– Weight: 144 Oz (9.5 lb)– Volume: 1.1 (FT3)– Dimensional weight: 12 lb– Zone 5 cost: $10.85 (dim weight)

• LESS: $1.40

• Package 3 (Small):– Weight: 115 Oz (7.7 lb)– Volume: 0.75 (FT3)– Dimensional weight: 8lb– Zone 5 cost: $10.07 (dim weight)

• LESS: $2.18Total Cost: $42.57 VS. $38.99Savings: $3.58

18% saving

11% saving

8.4% saving

52% increase

$38.37 2014 Cost

2015: 11% increase2015: 1.6% increase


Highlights

• Minimized the impact of the 2015 increase from 11% to 1.6%

• 8.4% saving on entire order• 11% saving on 2nd carton• 18% saving on 3rd carton• 3rd Carton would be 52% more expensive in 2015


Where to from here?

Consider – ANALYZE:

• Analyze your current spend to determine future impact• Analyze current packing process to uncover opportunities to lower costs

that could be incurred in 2015 and onwards– Change Management– Education (Behavior change)– System change

– PROCESS CHANGE: • “On Demand” Packaging – e.g. Packsize• Rerouting parcels packed out of stated compliance boundaries for

quality review– SYSTEM MONITORING:

• SAP EM implementation for process wide visibility and exception management

• Process analytics to ensure your stated SLAs are being met

Call us: We can help…


YOU SAP INNOVATION AND SUPPORT COMPANY

Kevin [email protected]://www.qdatausa.com

mailto:[email protected]

http://www.qdatausa.com/

Small parcel packing exception monitoring

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