In the first part of this article series, I described what Track and Trace is and how it relates to outbound logistics. In this article, I will explain how SAP's Track and Trace feature can be used to ensure complete visibility into inbound logistics. By leveraging SAP's Event Management module and EDI carrier status notifications, organizations that place purchase orders (PO) for their suppliers or manufacturers can track their products from start to finish. This is crucial because it ensures that the product arrives at the intended destination on time as promised. The ability to schedule resources for receiving and meet customer demand relies heavily on the product being delivered on schedule. With SAP's Track and Trace system, logistics become more streamlined, efficient and reliable.
Do you have enough time between when you find out about the issue and the time needed to correct it? Do these issues in inbound logistics cause disruption and potentially lead to lost customers and sales?
The resolution of this issue was first addressed in the 90s and was called "Supply Chain Event Management" - this solution provides the capability to observe the events that take place through the supply chain and compare them to the anticipated events. If any discrepancies are noticed, it allows proactive measures to be taken. SAP was part of the "think tank" responsible for coming up with the term "Supply Chain Event Management" and the software SAP Event Management for tracking and tracing.
Inbound logistics refer to the activities that are necessary to acquire and transport materials and products into an organization. This process includes the sourcing of suppliers, inventory control, and the transportation and delivery of materials.
When a buyer submits a PO, an event handler (EH) is set up in SAP Event Management (EM) and it keeps track of the purchase order's status. All adjustments to the purchase order are mirrored in the SAP EM Purchase Order EH so that anyone monitoring the purchase order is informed. One example of a change monitored against the PO is the confirmation of the order. Questions such as whether the confirmation was received, the date, quantity, and price all change are asked.
Once the purchase order has been confirmed and the supplier has shipped the product, they will send an Advanced Shipment Notification (ASN) to inform us of the shipment details. This ASN is related to an inbound delivery in SAP. At this point, an Event Header (EH) is created to monitor the status of the inbound delivery. This EH is connected to the PO EH in the same way the confirmation control area of the PO in SAP ECC links the two documents. Before the product was shipped, a tracking number was assigned to the inbound delivery, which is then used to create another EH in SAP EM, to track the status of the number. This tracking number EH is linked to the inbound delivery EH, giving access to the PO, inbound delivery, and tracking number.
As soon as the carrier does its initial scan for the designated tracking numbers (at the supplier's location), we get an alert from the carrier with details about this happening. Usually, the carrier gives us an EDI X12 214 carrier status notification message. To interpret this, we typically employ a translation tool such as SAP NW PI and have it posted to SAP EM. Every time a 214 message is sent, we associate it with the corresponding tracking number event and update the status accordingly.
We may choose to use the status of an event, such as Proof of Delivery (POD), to determine what related event handlers should be triggered. For instance, if a POD is posted to a tracking number EH, it will let us know that the package has been delivered. This tracking number is also tracked on the inbound delivery, so the POD event can be applied to the inbound delivery EH and the status can be changed to "Arrived at the DC (distribution center)." Furthermore, the inbound delivery is linked to a PO, so the PO's shipment status can be altered to "Arrived at the DC," providing the DC receiving team with insight into the fact that the products are waiting in the warehouse to be received. Additionally, this can give visibility to the procurement and sales teams to know that the products have arrived, but are yet to be received.
An essential carrier status event to note is when the Expected Time of Arrival (ETA) has been altered. This must be communicated to the carrier tracking number, inbound delivery, and the PO to make all members of the extended supply chain aware of the new delivery date. In addition, the inbound delivery needs to update the inbound delivery in SAP ECC and the warehouse receiving team should adjust their reception timeline in response to the modified PO.
The alteration of the current procedure's timeline can result in the reorganizing of the plan for upcoming stages in the plan. Immediate attention is paid to any difficulties that arise, thus lessening the consequences of "skipped" landmarks in the supply chain plan.
Following a typical goods receipt (GR) process, once the goods have arrived, we move them into unrestricted stock where they can be assigned to the demand. With GR, an event is passed to SAP EM to update the inbound delivery EH to "Goods Received." The GR event is also shown to the buyer in the PO to indicate that the PO has been "Fully Received" (unless this is one of multiple shipments in which case it was partially received).
By keeping track of the "Carrier POD" and "Goods Receipt" activities, it is possible to measure how good the DC is at executing their receiving tasks. Are they meeting the SLA that outlines the rules for accepting the merchandise into the warehouse?
It is possible to gain comprehensive insight into the supply chain partners from the purchase order to the GR, inclusive of carrier notifications and inbound delivery. The SAP EM provides a standard Procurement Visibility Process that includes the receipt of the Vendor Invoice as well as payment, thus allowing for a comprehensive Procure-to-Pay visibility and recognition of statuses and exceptions.
Value-adding components can be seen as enhancing features that contribute to the overall result. Ways to enhance the process might include:
- To ensure that an event is received for the tracking number, a "pickup" event should be created for the inbound delivery EH. This would enable us to check with our vendor why a carrier notification was not obtained for the shipment.
- For the inbound delivery EH, a "delivered" event should be established to monitor its promised delivery date. If the Delivered event goes overdue without being received, the DC will be warned that the delivery is running late.
- When EDI/IDoc postings fail, it will be possible to record them against the corresponding PO to gain visibility of any potential issue. For instance, if an ORDRSP IDoc does not post against the PO, it may indicate that an EDI X12 855 order confirmation is missing. To prevent further complications with the procure-to-pay process, an event can be sent to the SAP EM PO EH if the PO is specified on the ORDRSP IDoc with a failure. This event will alter the PO status to "PO Confirmation Failure" and may also send an alert to the buyer to prompt the resolution of the error.
- To guarantee that each and every PO reaches the supplier, an event should be sent to the SAP EM PO EH when the PO output is created. This will be useful in responding when the PO output is not generated in an expedient manner.
Putting Process Track and Trace into Action
When considering the integration of SAP EM and EDI for track-and-trace purposes, the following points must be taken into consideration:
- It is essential for the supplier to give a unique tracking number for each carton and the carrier that is used.
- The carrier must be equipped to electronically inform us of the tracking number status; even if the supplier is the one in charge of the shipment.
- All the data related to purchase order, inbound delivery and tracking numbers should be tracked by SAP EM; hence, it is best to stick to a standard implementation.
- It is important to devise a SAP Track and Trace solution with reporting and analytics in focus.
- Make sure to plan for the potential for expected events to be re-evaluated in your design.
- If you are looking to enable pro-active alerts for exception messages, it is necessary to ensure that the master data driving the notifications is of the best quality. Moreover, it is essential to make sure that the data given by the supplier is accurate and in line with the shipment, or else you will be bombarded with notifications