Ingersoll Rand Shipping Optimization in R12 with Oracle Transportation Management
Miroslav Samoylenko, ERP Technical Lead March 12, 2015
2 Shipping Optimization in R12 with OTM Ingersoll Rand is 143 years old.
Founder: Simon Ingersoll -- patented the steam-powered rock drill in 1871.
3 Shipping Optimization in R12 with OTM
4 Shipping Optimization in R12 with OTM
5 Shipping Optimization in R12 with OTM
Shipping Business Model
• Customers place orders with Ingersoll Rand
• Factories and warehouses fulfill customer orders
• Chartered carriers ship the ordered equipment to the customers
• Ingersoll Rand does not maintain its own fleet
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Shipping Model: DSO
• Dealer Sales Offices are warehouses serving local dealers
• Low to moderate transaction volume • Limited number of customers • Preplanned deliveries
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Shipping Model: Regional Warehouse
• Super warehouses serving an entire region
• High volume of transactions
• High number of customers
• Bulk planned shipments
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Software Footprint
• Single global instance of Oracle eBusiness Suite 12.1.3 runs all back office operations
• Single global instance of Oracle Transportation Management 6.2.7 plans all shipments
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Standard R12/OTM Integration
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Standard R12/OTM Integration
• API for data manipulation • Staging tables • Integrated interface flags R12 • GLOG Transformations • PL/SQL Calls Fusion • Agents • Saved Queries • XML Profiles OTM
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Shipping Execution with OTM
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Standard Integration Restrictions
• Deliveries are created in R12 before they are planned in OTM R12
• One delivery can ride only on one trip R12/OTM
• An order release cannot be split between trips OTM
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Optimization Targets
• Truck Utilization
• Shipping Network Optimization
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Standard R12 to OTM Data Model
• R12 sales order line for 10 each becomes one delivery line
• R12 delivery line for 10 each becomes a single ship unit in OTM
R12 OTM
Delivery Order Release
Delivery Line (sales order line)
Order Release Line
Delivery Line (container)
Ship Unit
Unpackaged Delivery Line (sales order line)
Ship Unit
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Use Case
• Ten Twikenham hotels order 10 Ingersoll Rand products each
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Truck Utilization Air Conditioner Air Compressor Large Air
Compressor % of truck per unit
1% 4% 6%
% of truck per delivery
10% 40% 60%
# of trucks produced
1 5 10
Truck utilization produced
100% 80% 60%
Optimal # of trucks
1 4 6/1
Optimal utilization
100% 100% 96%
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Truck Utilization Opportunity
0
20
40
60
80
100
120
Case 1 Case 2 Case 3
Order Size Std Utilization Opt Utilization
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Shipping Network Optimization
Shipping Rates • Quartermaster Lines
- Small truck: $20/trip
• 19 Wheelers Lines - Full truck: $80/trip
Sales Order • 10 air compressors • 1 air compressor
occupies 3% of truck
Standard Optimal # of truck 1 2 LTL Truck utilization 30% 60% Freight cost $80 $40
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Summary
• Standard Oracle eBusiness Suite to Oracle Transportation Management Integration produces optimal shipments when weight and dimensions of an individual delivery are significantly smaller than the capacity of the vehicle which transports it
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Opportunity
Where does it fit IR? • Dealer Sales Offices
and Small Parts Warehouses
• LTL, parcel • Delivery splitting/bulk
planning not needed
Where does it not fit IR? • Regional Warehouses • TL • Consolidation, multi-
stop, deconsolidation pool, multiple equipment
• Bulk planning
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How to Achieve Optimization?
Input Output OTM has all information necessary to produce an optimal shipping network
It is OTM which should drive the decision to form a delivery
Optimization requires smallest possible shipping units
Rethink mapping of shipping units between R12 and OTM
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Key Redesign Restrictions
• Use standard integration APIs and functionality
• Delivery rides on one and only one trip in R12
• Smallest shipping unit in R12 is delivery line
• Need a delivery in R12 to interface data to OTM
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One Delivery on One Trip
• Ingersoll Rand recognizes revenue when the first leg of a shipping network is ship confirmed
• Only the first leg of a shipping network produced by OTM becomes a trip in R12
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Redefinition of Shipping Unit
• Do not split delivery lines by base quantity
• Record individual shipping units for a delivery line in a custom table
• Define shipping units based on custom logic
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Deliveries and Order Releases
• R12 needs to form a delivery to interface delivery line information to OTM
• It is OTM which decides how to form a delivery
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Redesigned Interface Zig Zag
• Dummy delivery wraps a delivery line for the purpose of interfacing it to OTM
• Dummy delivery produces a splittable order release in OTM
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Redesigned Interface Zig Zag
• OTM optimally plans the shipments
• Only the first leg of a shipping network is interfaced to R12
• Inbound interface rearranges deliveries to meet API restrictions
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Redesigned Interface Zig Zag
• Rearranged deliveries are synchronized back to OTM
• R12 and OTM now have identical snapshot of deliveries/order releases
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Key Integration Change
• Upon trip creation the dummy deliveries are rearranged in the way they should have been created in the first place to produce the generated shipping network
• Deliveries are consolidated in R12 by trip stops based on OTM planned shipments
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Optimal Shipping Execution with OTM
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Cost Savings
• Improved interface increased truck utilization by 10%
• Implementation cost recovered within the first year of operation
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What is Next?
• Continue deploying the solution to warehouses in Europe and North America
• Concentrate on tuning master data
• Eliminate manual trip planning