—Larry Peterson, ERP Track Lead, WI

• Reduction of transportation costs

• Reduction of transportation cycle time

• Reduction of manual work

• Increase in visibility of shipments for tracking/auditing

• Support for future pre-clearance of shipments

I have implemented this functionality for a few clients and will describe it so that you can make use of it at your company. Since this functionality is not well documented, I'll provide the steps required to implement it. I will walk you through shipping functions from the consolidation point of view and show you how to model them in your system.

I will make use of the Material Management (MM), Shipping/Transportation in Logistics Execution (LE), and Sales & Distribution (SD) modules. You can use it with R/3 version 4.0B and later, and possibly on some older versions, as well as ECC.

As you probably know, the shipping and transportation function starts with the creation of an outbound delivery. In the logistics execution module, for example, the process starts with a sales order or a purchase order. You pick the items confirmed in the delivery from the physical location and confirm them in the system. They are then packed for shipment. Once they leave the door, a post-goods issue confirms that they are debited from your inventory from the accounting point of view.

As a simple example, you could consolidate different customer shipments to be delivered to the same end-destination collection point, pack them as one shipment, and, upon reaching the destination, remove the individual shipments and have them delivered to the customer.

The flow chart in Figure 1 includes collective processing of documents due for delivery with warehouse management, delivery due list, collective processing with transportation planning, collective picking, manual or automatic packing, and post-goods issue.

Figure 1

Consolidated shipment flow with WM

For Figure 1, I used an example of multiple sales orders, for which multiple delivery notes are created. If you have R/3 Warehouse Management (WM), the next step would be to create a transfer order, which is equivalent to a request for picking.

Use any of delivery create transactions (VL01, VL04, or VL06) for delivery note creation from sales orders (or purchase orders). Based on these deliveries, use transaction LT03 to create the transport order.

Collective Shipment Processing

The consolidation starts with the shipment creation. Collective processing is located in the Shipment create option. The menu path is Logistics Execution>Outbound Process>Goods Issue for Outbound Delivery>Shipment>Create>Collective Processing (or use transaction VT04). Figure 2 displays the Create shipments in collective proc. screen.

Figure 2

Enter details for collective shipment processing

The collective processing of shipments can be for inbound receipts or outbound deliveries. In the flow chart in Figure 1, outbound deliveries are created out of sales orders.

In the section Select deliveries in Figure 2, you must maintain a variant. Give the variant a name (for example, TEST123) and click on the Maintn button. The selection criteria for the variant maintenance appear (Figure 3). Pick the selection that best suits your business needs, such as Shipping Point/Receiving Pt, Ship-to party, and Route Schedule.

Figure 3

Maintain Variant selection for collective shipment

Referring back to the Figure 2, under the Rules section, you have first the Grouping criteria and then the Data and options fields. For Grouping criteria, specify which criteria have to be identical in the deliveries to be considered for collective shipment (or consolidation). For example, you can combine shipment based on common values for shipping point, ship-to, route, and weight of the goods.

Figure 4 shows the comprehensive Grouping criteria selection. You can maintain a grouping criterion as a selection variant for future collective processing use.

Figure 4

Grouping criteria for collective shipment

You can specify the data to be included in the collective shipment document (Figure 5). The transportation planning point (TransportPlanPt) and Shipment type are mandatory. The rest of the fields are generally maintained so that they are available in the general header data of the collective shipment document. For example, you can specify a Service agent, pick a Shipment route, and execute leg determination here.

Figure 5

Data and options selection variant for collective shipment processing

Collective Picking

Grouped deliveries then undergo collective picking. The items from several deliveries are combined into one picking list. Several individual items are assigned to a single collective item. With collective picking, the picker avoids multiple visits to the storage bin. Picking for several deliveries is carried out according to storage location and material.

For collective picking, group deliveries using the following configuration setup:

Step 1. Initiate the current number range for the warehouse number. Use the IMG transaction LN06.

Step 2. Define groups, such as collective picking or packing and shipping units. Use IMG transaction VOGL (Figure 6).

Figure 6

Use VOGL to define groups for collective picking, packing, and shipping

Step 3. Assign the loading point to the shipping point. Use transaction OVX7 (Figure 7).

Figure 7

Use OVX7 to assign loading point to shipping point

Step 4. Define the number range for the picking request. Use transaction SDPI.

Packing

Packing is the next step for delivery and shipment processing. Packing generally includes placing delivery or shipment items into boxes and stacking the boxes onto pallets for delivery to the customer. Packing requires the following prerequisites for master data and configuration steps:

Step 1. Create the packing material. Use transaction MM01 for creating packing material and select the Basic Data view. The material type for packing materials is VERP. Record packing material values — Gross Weight, Net Weight, Volume, and Size/dimensions — in the material master basic data view (Figure 8). In the Packaging material data section, maintain Matl Grp Pack.Matls in the configuration and update values. I'll explain the configuration for these values in step 2.

Figure 8

Updating values used to create packing materials

Select the Sales: General/Plant tab by either moving to the next list of tabs and selecting it, using the right arrow, or select from the list of views by clicking the far right icon . In the Sales: General/Plant screen (Figure 9), the material group for packaging material (Matl Grp Pack.Matls) is prepopulated, so you must update the Packaging mat. type, Allowed pkg weight, and Allowed pkg volume.

Figure 9

Update prepopulated packing attributes in the Sales: General/Plant view

Step 2. Update the material groups for packing and shipping materials. Maintain a material group for packing materials via transaction OMSF (Figure 10).

Figure 10

Use OMSF to choose a material group for packing material

Define the Packaging Material Types for the packing boxes via transaction VHAR (Figure 11).

Figure 11

VHAR shows the packing material type configuration element

Maintain the packaging type material group via transaction VEGR or menu path Logistic Execution>Shipping> Packing>Define Material Group for Packing Materials (Figure 12).

Figure 12

VEGR is used to maintain material group for packing materials

Step 3. Packaging. Having created the packing material and associated configuration, what's left is the configuration for packing processes itself.

A shipping unit is a combination of materials that is packed together in shipping material. A shipping unit in a delivery is made up of a shipping unit header and shipping unit items.

You need an internal number for the system to assign to each shipping unit when goods are placed in boxes. The number range for packing is maintained through the transaction VNKP. The packing number is automatically assigned.

With the above steps, you are now able to consolidate the deliveries into one shipment, perform picking, and pack them into boxes. You may follow the remainder of the shipping process as usual.

Rajen Iyer

Rajen Iyer is the cofounder and CTO at Krypt, Inc. Rajen has written several in-depth, best practice articles, white papers, patents, and best-selling books on SAP Logistics and SAP Global Trade Services, including Effective SAP SD and Implementing SAP BusinessObjects Global Trade Services. He is also an invited speaker at industry conferences.

You may contact the author at Rajen@kryptinc.com.

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