Third Party Logistics and EDI

Orange County Convention Center
Orlando, Florida | May 15-18, 2011
Third Party Logistics and EDI
Session 2511
Susan Delaney, OSI Group, LLC
Corey Herchenroder, CONTAX
[ CONTAX – Corporate Bio
Real Experience. Real Advantage.
Privately Owned, Founded in 1991
~ 100 Employees
SAP fluency for 20 years
SAP Business Objects Partner
SAP Channel Partner
Awarded 2010 Pinnacle Award
Some Active Clients Include:
[ OSI Group Background
ƒ The OSI Group, headquartered in Aurora IL, is a global leader in food
ƒ The company has 47 processing facilities located in 17 countries and have
over 10,000 employees dedicated to providing food solutions for some of
the world's leading food companies.
ƒ Core products include beef, pork, poultry, pizza and produce
ƒ OSI is a world-class food manufacturer offering global solutions for product
innovation, product development, and custom process engineering with a
strong and proven focus on food safety and operational excellence.
ƒ 9 US plants on SAP
ƒ 2 more US facilities projected to start SAP implementation project in
2012 - multiple 3PL possibilities
Real Experience. Real Advantage.
[ Learning Points
How OSI set up EDI with it’s Third Party Logistics Providers
ƒ Introduction to EDI
ƒ EDI from a Logistics Viewpoint
ƒ EDI from an EDI Viewpoint
Real Experience. Real Advantage.
[ EDI (Electronic Data Interchange)
ƒ EDI means to exchange information between a sender and a
receiver. Both communication partners need to speak the
same language to understand each other.
ƒ The language for EDI is comprised of the file formats and
description languages used in the EDI data files. In the simple
case of exchanging plain data files, the partners need to agree
on a common file format.
ƒ From SAP IDoc Book
Real Experience. Real Advantage.
[ 3PL Reasoning
ƒ Third Party Logistics (3PL) is using an outside party to take
care of all or part of your product distribution. If you are a
small or medium company, you may not want to develop a
logistics function. You may not want to invest in the facilities
or the systems needed for logistics. Or your customers may
require you to use a 3PL to save them transportation costs and
allow them to mix products from multiple vendors at one
ƒ A 3PL can perform the management function of warehousing,
order fulfillment, distribution, customs and inbound/outbound
Real Experience. Real Advantage.
[ OSI 3PL Environment
ƒ OSI has a batch-managed environment. Every pallet has an ID
that is a combination of the year, day, and time the pallet came
off the production line.
ƒ OSI has three 3PL’s we currently exchange EDI with:
ƒ Large foodservice customer wanted one pick-up point for
multiple vendors products.
ƒ Grocery chain wanted two pick-up points (East, Midwest) for
multiple vendors products.
ƒ Major quick service restaurant wanted a single pick-up point in
the Midwest for multiple vendors products.
Real Experience. Real Advantage.
[ Software/Consulting Environment
ƒ SAP ECC 6.0
ƒ Sterling Gentran for Windows EDI Mapping/Translation
ƒ Sterling R/3 Extension for SAP
ƒ Sterling AS2 Software (B2B)
ƒ Sterling VAN Mailbox
ƒ Consulting: CONTAX
ƒ CONTAX has vast knowledge of both SAP and Gentran
Real Experience. Real Advantage.
[ Document Flow Outbound
Stock Transport Order
Sales Order
Outbound Delivery
Outbound Delivery
Gentran Map
to 943
AS2 or EDI Van
Real Experience. Real Advantage.
Gentran Map
Conversion to
AS2 or EDI Van
[ Document Flow Inbound
AS2 or EDI Van
Gentran Map
from 944 to
STO Delivery - MIGO
Real Experience. Real Advantage.
AS2 or EDI Van
Gentran Map
from 945 to
Delivery - PGI
[ Transactions
ƒ Current OSI EDI transactions used for the 3PL businesses:
ƒ Outbound:
ƒ 943 – Outbound stock transfer delivery of product to 3PL to create
warehouse inventory.
ƒ 940 – Outbound delivery information for customer shipment info to ship
directly from 3PL.
ƒ Inbound:
ƒ 944 – Inbound confirmation of stock receipt from 943.
ƒ Automatically creates a MIGO transaction in SAP.
ƒ 945 – Inbound confirmation of customer shipment details
ƒ Automatically PGI’s the customer delivery
ƒ Each customer’s file format is different in our environment.
Real Experience. Real Advantage.
[ SAP IDocs
ƒ An IDoc (interchange or intermediate document) is an SAP data container
for one business object (delivery, order, etc) which determines the IDoc
type. IDocs are an ASCII file format to exchange data between computers.
ƒ Outbound
ƒ IDoc DELVRY02 + extension ZLIVRY02 for both 943 and 940
ƒ Message Type SHPORD
ƒ Used SP partner for 943 and SH for the 940
ƒ Inbound
ƒ IDoc WMMBID02 for 944
ƒ Message Type WMMBXY
ƒ IDoc DELVRY03 for 945
ƒ Message Type SHPCON
Real Experience. Real Advantage.
[ 943 IDoc to EDI Map Example
ƒ Example of 943 STO delivery
Real Experience. Real Advantage.
[ Starting Point – Transaction WEDI
ƒ Provides EDI Menu Path
Real Experience. Real Advantage.
[ Master Data
ƒ There is a great deal of communication with your EDI partner
on master data, EDI standards, and field definition. You need
to agree on what data gets populated in every field and what
sequence that data follows.
ƒ Your terminology may mean something different to your
Real Experience. Real Advantage.
[ Material Master Data
ƒ We have provided our material master data and the
customer-material information record for our end customer to
the 3PL so they can translate the EDI and distribute correct
shipping paperwork that the customer can understand.
ƒ We relay this master data information via email since there are
less than 15 material numbers involved for each location.
ƒ You can send this master data information via an EDI message
if your material master environment is different.
Real Experience. Real Advantage.
[ OSI LE Structure
ƒ We have identified each of our 3PL’s as storage locations attached to the
manufacturing plant from which product is being supplied. When we do an
STO, we identify the manufacturing plant as the header plant and the 3PL at
the item level with the same plant number but the 3PL storage location.
ƒ We do get customer order changes after a delivery is created for one of our
3PL’s, so we need to be able to change our deliveries. If the product has not
been received at the 3PL, any further shipment of the product gets an error and
cannot be processed.
ƒ Other companies identify their 3PL as a warehouse.
ƒ Once a WHSE is set up as “External” then no goods movements are allowed
without the third party confirmation.
Real Experience. Real Advantage.
[ Storage Location
ƒ Two of the plants using these transactions are not WM plants
so have no warehouse identified.
ƒ Storage location configuration is done at OX09.
ƒ Be sure to fill out the address of the 3PL in config so it appears
on the STO and also on the delivery documents.
Real Experience. Real Advantage.
[ WE20 Transaction
ƒ Partner Profile set-up is required for communicating messages.
Logical System
ƒ Identify IDoc types, message types, RFC vs. file transfer ALE.
ƒ Identify EDI standard and version.
Real Experience. Real Advantage.
[ Customer Set-up
ƒ WE20 requires set-up for each vendor, customer, bank, and
logical system
Real Experience. Real Advantage.
[ WE60 IDoc Type
Real Experience. Real Advantage.
[ WE21
ƒ Port Definition is used to define a file port to pass information
back and forth from EDI to SAP.
Real Experience. Real Advantage.
ƒ ALE is used to define a direct application link between EDI and
Real Experience. Real Advantage.
[ Output
Master Data - EDI Trigger for Deliveries
ƒ Output determination triggers this EDI.
ƒ LAVA delivery output can be copied to create new EDI
ƒ Can trigger at the same time as your B/L
ƒ Requirement of PGI to trigger - or ƒ Without requirement of PGI
ƒ Multiple EDI partners in one delivery is possible with multiple
ƒ Output medium is 6 for EDI with a dispatch time of 4 if
triggering needed immediately.
Real Experience. Real Advantage.
[ Daily Monitoring
WE02 – We all want green lights
Real Experience. Real Advantage.
[ WE02 Error Correction
ƒ You can use WE02 to do error correction.
ƒ Double click on the paper icon on the left of the segment with
the error.
ƒ Menu path Data Record > Display > Change
Real Experience. Real Advantage.
[ WE19
ƒ Error correction can also be done here by drilling into the
header or each line and correcting the data.
Real Experience. Real Advantage.
[ Status Monitor For ALE – BD87 – Reprocess Without
ƒ Select red light item and hit process button - no data
correction can be done here.
ƒ If successful, turns yellow/red lights into green lights in WE02.
Real Experience. Real Advantage.
[ Inbound IDoc Example
ƒ Item of a 944 inbound receipt of stock
Real Experience. Real Advantage.
[ EDI Confirmations
ƒ When we send a document outbound to the partner from our
mapper, we always get an EDI message type 997 confirmation
back into our mapper. When we receive a new document
from the 3PL, we always send a 997 back to them. The 997
EDI transaction verifies you received a specific EDI message. It
does not confirm any specific details from within the original
ƒ There are other types of EDI messages that require a detailed
confirmation back but that is not applicable with these
Real Experience. Real Advantage.
[ Warehouse Inventory Cycling Reports
ƒ The 947 EDI message is a warehouse inventory cycling report.
We have not implemented this with any of our 3PL’s yet. We
do receive a PDF report with this data.
ƒ Most 3PL’s have various reports they can email you daily,
including an inventory report.
Real Experience. Real Advantage.
[ Best Practices
If you are in a batch managed environment, be sure to assign
your batch numbers in the STO PO. That way, when an
error is made by the 3PL upon receipt confirmation, you will
get a specific error message at the batch level. If you only
assign the batches on the delivery, SAP error messaging is not
specific and this creates a lot more work and creates an
environment for errors to get into SAP.
Make sure your plant double checks their inventory and
verifies customer shipment accuracy daily.
Real Experience. Real Advantage.
[ Key Learnings
ƒ EDI lessens data entry but definitely needs to be checked in detail on a daily
basis from an EDI perspective, a plant inventory perspective, and a
customer invoicing perspective.
ƒ You may need to customize your IDocs to bring in fields that are available
in SAP but not in your IDoc.
ƒ SAP has their IDoc which you then need to translate to EDI. This requires
mapping of which IDoc field data corresponds to the EDI standard field that
you have agreed upon with your customer.
ƒ Depending on what system your 3PL uses, you might need to provide
header data at the item level.
ƒ There are various types of standards for EDI that you may need
to communicate with.
Real Experience. Real Advantage.
[ Contacts
ƒ Susan Delaney, OSI Group
ƒ SAP Business Analyst Sales/EDI
ƒ [email protected]
ƒ Corey Herchenroder, CONTAX
ƒ Managing Director
ƒ [email protected]
Real Experience. Real Advantage.
ƒ Thank you for participating.
Please remember to complete and return your
evaluation form following this session.
For ongoing education in this area of focus, visit
Real Experience. Real Advantage.