SAP freight-costs-monitor:
Optimized shipment costs processing & freight costs check in SAP

Results of the Project

  • Electronic processes replace paper-based processes

  • Worldwide data access by a central SAP System

  • Automated postings within the tolerance limit

  • Unproblematic control of compliance with delivery times

  • Increased accurancy of freight costs check

  • Minimized manual effort in freight costs management

“We have achieved our project goals 100% and plan to implement SERKEM’s freight cost monitor at additional locations in the future. Since the solution was fully implemented in SAP, there are no additional licensing costs. And due to the open, transparent program structures, we can largely carry out the rollouts independently from TRUMPF.”

Christian Füssel, Project manager, TRUMPF GmbH & Co. KG

TRUMPF

The whole story

TRUMPF – The Costumer

As an independent family business the high-technology company TRUMPF provides manufacturing solutions in the fields of machine tools, lasers and electronics.

These divisions are centrally organized by the management holding company of the TRUMPF GmbH + Co. KG. A global network of comprehensive production, sales and service companies supports the holding.

In the global delivery of its products, TRUMPF relies on various logistic service providers. Moreover, besides quality and excellent products, highly efficient processes are one of the main priorities of the internationally operating high-technology company.

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subsidiaries worldwide
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Mio. € in 2013/14
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Employees

Die Herausforderung: Auf einen Blick

  • About 17,500 annual paper invoices from logistic service providers are incurring every year in Ditzingen
  • Invoices with 210,000 posts for replacement parts, service parts and spare parts
  • 16,000 posts for machine shipping
  • Check Invoices for deviations from the agreed conditions
  • Manual audit of the freight expense reports is a time-consuming and error-prone process

TRUMPF – The Challenge

About 17,500 paper invoices from logistic service providers are incurring every year in Ditzingen for conducted freights. They include 210,000 posts for replacement parts, service parts and spare parts as well as 16,000 posts for machine shipping.

TRUMPF handles 90% of all freights with 5 logistic service providers, with which certain terms have been agreed.

After receiving the invoices from the service providers, TRMUPF has to check them for deviations from the agreed conditions. An enormous effort, as the invoices comprise partially up to 200 pages. Altogether, the manual audit of the freight expense reports is a time-consuming and error-prone process.

When TRUMPF receives the invoices from the service providers, they must be checked for deviations from the agreed terms. This is an enormous effort, as the invoices can sometimes comprise up to 200 pages. Overall, the manual verification of freight cost settlements is a time-consuming and error-prone process.

„Due to the strong growth in the volume of shipment, it was foreseeable that an examination of the invoices in the future could only take place on a random basis. The recognition of incorrect statements would be by chance. The manual audit was neither audit proof nor complied with the requirements of a genuine control of the service provider.“
Udo Landgrebe, Central Logistics Department, TRUMPF GmbH & Co. KG

Therefore it was the objective at TRUMPF to simplify the process considerably and to reach a significantly higher test quality.

TRUMPF

Automated electronic shipment cost processing in SAP

TRUMPF – The Project

The purchasing, shipping and IT department of TRUMPF decided to automate the processing of incoming invoices from logistic service providers in order to maximize the accuracy of the freight cost check and to minimize the manual effort. The electronic incoming invoices from the service providers should be checked automatically and booked by the system if they stay within a defined tolerance range. Positions with values outside of the threshold value should be marked and manually checked in the following step by the shipping department. At the same time, the new solution should be user-friendly for staff and international roll-outs should be possible without much effort, too.

During the subsequent tender, the SERKEM GmbH convinced with a directly implemented freight cost solution in SAP. All requirements from TRUMPF are implemented user-friendly in SAP. A freight-cost-monitor – the core element of the solution – enables monitoring and clear control of all operations.

In the first step of the project, the CEP service providers were connected. They cover about 98% of the time-critical spare part shipment and small part shipment – in total more than 210,000 shipment items per year.
For each delivery the SAP system creates a transport cost document and a freight cost document . In the freight cost document, the target freight costs are calculated in advance based on the stored conditions for each service in SAP.. The basis for the calculation is either gross weight, volume or loading meter.
The conditions can be maintained easily. The employee can edit the conditions via excel spreadsheets und update them in the SAP system. Up to 20 condition types with any number of specifications can be stored and maintained per freight forwarder. Each agreed condition has its individual validity period. Surcharges for distance, weight, hazardous materials, incoterms etc. are taken into account in the calculation of target costs, too.

Based on the shipping conditions the latest delivery time is determined and subsequently compared with the timestamp from the proof of delivery, for example for “express”-service until 10:00 o’clock. This functionality was particularly important for TRUMPF, because the agreed delivery times were not met by the service provider in the day-to-day business, but nevertheless “express” has been charged.

The electronic invoices and proofs of delivery of each service provider are transmitted as a single invoice in a variety of formats and converted into a consistent SAP IDOC format. Then, the converted bills are transferred to the module PI of the TRUMPF-SAP system and uploaded into the freight check monitor.

The individual positions will be checked for deviations from the pre-calculated freight costs and agreed delivery times by the freight cost monitor: The previously determined nominal values and the actual values of the incoming invoices are now compared at item level.

If the deviation is below the preset threshold, the invoice item would be posted automatically in the SAP system and is thus integrated into the financial accounting. The position is posted in SAP and the process is archived in the system.

If the threshold is exceeded – e.g. “express” is ordered to 10 o’clock, but the delivery is after 10 o’clock, or the target costs are exceeded by more than 3%, the shipping department receives a notification about the deviation from the system. The position is automatically marked in the table for the manual check by the shipping department. In this case the freight cost monitor gives the responsible person access to the entire process files, including the shipment data of the service provider as well as other comments and information. Complaints lead to a message to the CEP provider. Finally, communications may be documented or carried out with the service provider.

Karin Maier of TRUMPF is impressed by the solution:

A package scanner in the depot of a service provider was configured incorrectly. Therefore, the service provider scanned the packages too big, which is why some packages were classified in the next higher fare class. Thanks to the freight cost monitor from SERKEM we noticed the pattern behind the discrepancies immediately, as the simulated rates for these packages deviated always by the same factor from the invoiced tariffs. Without the monitor we would not have noticed this problem so fast.
Karin Maier, TRUMPF GmbH & Co. KG

Meanwhile, TRUMPF is handling 99% of all CEP invoices and 98% of all CEP shipments in Ditzingen with help of the SERKEM freight cost monitor. More than 96% of all invoice items are now booked automatically. Only for 4% a manual intervention is necessary.

The process of freight cost processing at TRUMPF takes place entirely in SAP – except for data conversion. Once completed, all the steps are documented in the system and available when needed. The integrated SAP solution offers additional advantages: All the information can be accessed worldwide and the complete data base is available in SAP for reporting. The entire solution is audit proof, because the billing raw data and the PDF invoice are attached to the transportation document and the financial accounting document.

Savings of more than € 250.000 in the first year

TRUMPF saved 250,000 € thanks to the use of the SAP-based freight cost monitor in the first year . At the same time, the SERKEM-monitor serves as a tool to evaluate the delivery reliability of the service provider more efficiently.

And even the services providers of TRUMPF benefit from the SERKEM solution: the extensive automation shortened payment times significantly.

We have reached our project goals by 100% and plan to implement the freight cost monitor of SERKEM at other locations in the future. As the solution was fully implemented in SAP, no additional license costs incurred. And due to the open and transparent program structures, we (TRUMPF) can perform rollouts largely on our own.

Christian Füssel, Project manager, TRUMPF GmbH & Co. KG

„Für uns als Dienstleister ist es wichtig, dass der Kunde mit Projektende vollständig über die Lösung verfügt und sie auch unabhängig von uns weiterentwickeln kann – schließlich möchten wir den Kunden nicht über Lizenzvereinbarungen an uns binden sondern ihn durch unsere Leistung überzeugen, neue Projekte wieder mit uns als Partner umzusetzen,“ ergänzt Projektleiter Sascha Reischl von SERKEM.