Companies are showing increased interest in parcel and LTL shipping. This stems from a various motivations:
- Extending beyond B2B into B2C: Many of the companies we speak to are traditionally B2B focused and are seeking to develop a stronger relationship with the end customer. There is a trend for companies to ship direct to the end customer and bypass distribution channels. Plugging SAP into the carriers' SaaS shipping engine provides quick access to a fully integrated parcel and LTL solution at a low price. This helps to address the need for delivering todays B2C experience, where consumers demand user-centric, anytime/anywhere information, and expect their experience on a mobile device or online.
- B2C Experiences Set Expectations for B2B Customers: New customer expectations are inspiring innovation and driving competitive pressure in B2B industries like distribution and manufacturing. B2B business leaders are seeking to roll more B2C-like capabilities into the B2B user experience while simultaneously expanding their businesses into new geographies and channels.
- Increased emphasis on Reverse Logistics: A number of different customer return scenarios are supported with the SAP shipping solution.
This includes: printing return labels alongside the standard outbound shipping label, scheduling a carrier to pick up returns at the customer's facility, and requesting the carrier to email shipping labels to the customer, which can then be printed.
Customer returns are increasingly prevalent for various reasons:
-- Compliance and governance requirements to reduce waste and preserve the environment
When the waste electrical and electronic equipment directive (WEEE) was introduced to UK law in January 2007, focus turned to the reverse supply chain. With the intention of reducing waste and improving environmental performance, WEEE attributed responsibility for the safe recovery and disposal of products to the business that places it on the market.
-- Pharmaceutical returns
Drugs need to be properly destroyed at a certified facility when they are recalled or become expired. These tend to be small quantities that lend themselves to parcel or LTL shipping by a carrier.
-- Introduction of extended returns policies due to competitive pressures.
-- Guarantees and the growth of online retailing, a sector in which returns typically range from approximately 5-35% for white goods and fashion items.
Evaluate and Select a Shipping Solution
Take time to investigate the myriad of shipping applications on the market and select the one that is best suited to your company. Many alternatives to the shipping solution provided by SAP are available from third-party vendors. For most companies SAP's solution has compelling advantages and benefits that sway companies to adopt it:
- The key shipping components (XSI, Web services and packing
station) are already bundled into SAP. These are mature, robust
tools that have been available for many years and are commonly
used by many companies. Furthermore, they require no additional
licenses and are supported by SAP for bug fixes and upgrades.
- It is fully integrated with sales, delivery, and shipment documents
and logistics processes. Access to tracking numbers and other shipping
details, including real-time parcel tracking, is available directly
within the logistics documents.
SAP, you can better leverage the investment that was already made
in your SAP system. In addition, there are no subscription or
maintenance fees charged by SAP or the carriers for this service.
Parcel carriers do not charge to use their Web-based shipping
- The direct peer-to-peer architecture is fast and reliable; no
middleware or additional hardware is required.
For the most part, all shipping services offered by the carriers are available through SaaS. There are a few exceptions, however, so it is a good idea to ensure all of your requirements are met before undertaking to implement SAP's solution. For example, FedEx IDD Surface (Transborder) and IPD, UPS Trade Direct, and real-time GPS tracking are not currently available through Web services.
Confirm That Your SAP Environment Meets Solution Requirements
Check that your SAP system already has the tools required to support this solution. These tools are:
- The Express Ship Interface has been available since SAP R/3 4.6.
- SAP Enterprise Services provides your system with the capability
to communicate directly with the outside world. This component was
introduced with SAP R/3 5.0. If support for Web services is not included
in your SAP release, then you need middleware, such as Business
Connector or SAP NetWeaver Process Integration (PI) to translate data
between IDOC and XML formats.
Implementation Resources
Implementing SAP's shipping solution is a team effort requiring a group of people with a broad spectrum of technical skills. Here are the high-level responsibilities of each core team member:
- The logistics functional analyst's primary job is to identify the data required by each carrier, set up XSI and fit the solution into existing logistics processes.
- The developer is responsible for setting up Web services, pulling together the data needed to create a shipping label, and building out the printing framework to direct images received from the carrier to an appropriate printer in the distribution center.
- Change leadership produces training documentation and delivered the training to end users.
- Primary activities for the Basis resource include activating ICM service HTTPS, applying SSL certificates for FedEx and UPS, creating RFC destinations for our scales, and adding the laser and bar code printers to the system.
- The SAP security person adds new transactions codes necessary to support this solution to existing roles.
- The network resource opened a port for HTTPS communication and added printers to the network landscape.
- The network security resource verified that the HTTPS traffic with FedEx and UPS flowed correctly through the Web proxy server.
Augmenting SAP's functionality by leveraging services provided by SaaS offerings are common and are by no means limited to shipping services. Faster deployment of functionality, increasing flexibility to react to changing market conditions, savings on capital expenditures, enabling business continuity and replacing on-premise legacy technology are all suitable reasons to choose web services to connect to SaaS offerings.
Josh Riff co-founded Blue Harbors Consulting in 2001 and currently
acts as chief executive officer and president. In addition to
providing clients with executive consultancy regarding SAP planning,
implementation, and services, he leads Blue Harbors' business planning
and development initiatives. Prior to founding Blue Harbors, Josh held
consultant, team lead, and SAP project management positions. With more
than a decade's worth of SAP consulting experience, he has completed
a variety of high-visibility SAP projects for companies such as
PerkinElmer, McKesson, Barr Pharmaceutical, and Seminis. Josh
has a bachelor of arts in English literature from the University of
New Hampshire and earned a certificate in materials management and
procurement from the University of California, Berkeley. You may contact
Josh via email at Josh@BlueHarbors.com.