Electronic Freight Matching

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Electronic Freight Matching
Robert Sharp and Craig Potter
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Presentation Objectives
This presentation focuses on a project to build
and implement an Electronic Freight Matching
system for a large Australian FMCG organisation. 
The speakers will take you through the issues
that they had in designing this system from both
a Software and Business Process point of view and
what savings and costs have been realised from
this system.
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Agenda

• Berri Facts (Robert Sharp)
• Transportation at Berri (Robert Sharp)
• Project Overview and Scope (Robert Sharp)
• Transportation Process Flow (Robert Sharp)
• Software Solution (Craig Potter)
• OneWorld Transportation
• Other Technologies
• Summary/Conclusion

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Berri Limited - Facts

• Australias No 1 fruit based juice and drinks
  manufacturer
• 6 manufacturing and 15 distribution centers
• gt 1000 employees
• gt 500M turnover
• Process 1 in 4 oranges grown in Australia
• Branded and private label
• 900 skus down from 1500
• Operates in highly concentrated retail market.
  Also food service and route markets.

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Transport at Berri
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Berris multi-sourcing, multi-site, multi-channel
adds challenges
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Transportation At Berri

• Number of Deliveries and Freighters
• Key Freighter (Fletchers) does over 200
  truckloads daily
• 10,000 deliveries per month
• Regional freighters in each state
• Transportation Methods
• Chilled or Dry
• Frozen/Concentrates
• Distributors (Daily juice vans) over 200
  Australia Wide
• Charging rules
• Fletchers Tonnage Rate for each Pallet space
• - Greater of pallet space vs weight
• Different rates for Chilled and Dry products,
  Finished Goods and Raw Materials
• Other Freighters Pallet rate and one off charges

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Points of Pain

• Freight Note/POD discrepancies
• Freight invoice matching
• Accounting timing and accruals
• Freight cost analysis for ABC analysis

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Points of Pain Quick win

• Closed loop electronic processes for export
  container shipment process including export
  documents and payment of Container Packing
  company through reverse billing (RCTI).
• Proof of concept
• Admin savings
• Software issues identified

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Overview and Scope

• Automatic accrual of freight charges by shipment
  using JD Edwards One World Advanced Transport
  module for Specific Berri transport companies.
• Daily matching reconciliation between Berri and
  its transport suppliers to identify and resolve
  differences up front using electronic matching
  and workflow.
• Electronic payment and remittance to transport
  suppliers triggered by shipment process.

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Overview and Scope

• Carrier supplied Freight Note file (daily)
• Carrier supplied Freight Invoice file (weekly)
• No part payments
• Cannot support RCTI (legislative limitations)

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Overview and Scope

• Minimal impact on Business
• Use of RF for Picking and Despatch
• 3rd Party Interfaces
• Invoice with Goods
• Multiple Lines and Shipments per Invoice
• Goods shipped in both solid mixed pallet
  configurations

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Solution
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Process Flow
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Solution

• RF Pick Confirm
• Enter Number of Pallets
• Enter Number of Pallet Spaces
• Multiple Shipments created by RF Gun

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Solution

• Invoice Print
• Print Invoice Number as Barcode
• Assign Invoice Number to Shipments
• Re-calculate Total Weight (incl. Pallets and
  Drums)
• Store critical Freight Data for downstream
  processes

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Solution
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Solution

• Confirm Despatch
• Scan Invoice Number
• Shipment Confirmation of ALL Shipments on this
  Invoice

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Solution
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Freight Note Matching
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Solution

• Freight Note Matching program
• New Inbound Freight Notes file
• Find Shipments to match using Our Invoice
  Number
• Identifies the primary Shipment for each
  Invoice, all other Shipments are ignored
  (consolidated). Key freight data is updated on
  Shipment record using Shipment Reference file.
• Re-calculates Shipment Charges using stored
  Invoice Totals (e.g. Total Weight including
  Pallets)

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Solution

• Freight Note Matching program
• Allows for tolerance checking adjusts shipment
  charges if within tolerance percentage
• Any errors are written against individual
  Freight Notes on inbound file
• If unsuccessful an email is sent to the
  nominated user at each Warehouse (or a default
  User if this cannot be determined)

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Solution
Sample Status Flow
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Freight Note Matching
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Freight Note Matching

• Error Handling Process
• a. Source Data incorrect
• Correct Shipment Data (Weight, Pallets, Route)
• Modified Routing Options to allow re-routing
  shipment
• Correct Rates
• Re-process

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Freight Note Matching

• Error Handling Process
• b. Carrier Data incorrect
• Enter Freight Claim as Adjustment in Charges
  screen
• Process Claim (Non-Stock Purchase Order)

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Freight Note Matching
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Freight Invoice Matching
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Freight Invoice Matching

• Short term solution (value add?)
• No standard Inbound A/P Freight Matching
  available
• Better suited to RCTI process

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Freight Invoice Matching

• Match Freight Invoice with Shipments
• Receive Weekly
• Match by Freight Note Number
• Error if Shipment is not at matched status
• Exact match required to all Freight Notes on
  Invoice
• Write Freight Invoice number Date against
  Shipments
• Change status of matched Shipments to Ready for
  Freight Update

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Freight Invoice Matching

• Error Management
• Email sent to User
• Screen for reviewing Errors
• Freight Amount does not Match
• Freight Note not Found
• Shipment Status Not Valid

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Freight Invoice Matching
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Freight Update
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Freight Update

• Freight Update (R4981)
• Run Weekly
• Only selects Shipments which have been
  successfully matched to Freight Invoices
• Writes to G/Ledger
• Writes to A/Payable
• Writes to Freight Audit table
• Update Shipment Status

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Freight Update

• Accounts Payable
• A/P Invoice Date System Date or Ship Date
• Invoice Number 1st Shipment Number

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Freight Update

• Accounts Payable
• A/P Invoice Date Supplier Invoice Date
• Invoice Number Supplier Invoice Number

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Freight Update

• Freight Clearing - General Ledger
• Sales End of Day process writes _at_ Standard Cost
• DR Freight Expense
• CR Freight Accrual
• Freight Update _at_ Actual Cost
• DR Freight Accrual
• CR Accounts Payable
• Inquiry Reporting tools for reconciling
  differences in Freight Accrual account

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Freight Update

• Freight Audit Table (F4981)
• Individual Charges per Shipment
• Access to Freight Invoice details
• Allows for link back to the Shipment, Invoice or
  Order for Actual Freight analysis
• Profitability by Customer / Item
• Standard vs. Actual variances by Invoice

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Freight Update
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Freight Update
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• Summary

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Summary

• Negotiations with Carrier
• Electronic Capabilities
• Rates, Payment and Error/Dispute handling
  processes
• RCTI model
• Business Processes
• Tightening of Business Rules and Policies
• Software Limitations
• Calculating Weights Pallets
• Shipment splitting
• Correcting data

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• Questions?
• Contacts
• Rob Sharp Ph 03 9915 0448
• Mobile [phone]
• Craig Potter Mob [phone]
• Email Craigmpotter_at_optusnet.com.au